business news in context, analysis with attitude

CVS plans to double the size of its food offering in about 3,000 of its 7,000 stores by the end of the year, believing that it can “stake a claim for a bigger piece of the nation’s trillion-dollar food budget,” the Quincy, Massachusetts, Patriot Ledger reports.

While at least part of the strategy is tied to the company’s desire to become more of a one-stop shopping experience for customers, there also is a financial incentive - the Patriot Ledger reports that CVS hopes to get a piece of the slotting allowance budget that many food manufacturers use to get prominent placement in supermarkets.

The move also is seen as a way to strike back at supermarkets, which have been nibbling away and the health and wellness business with expanded HBC departments and pharmacies.
KC's View:
Food may be a good strategy for CVS, but I hate the idea that the company is looking to cash in on slotting allowances - which are one of the most corrupting influences ever developed in the food industry. Slotting means that companies make money on the buy instead of on the sell...and that ultimately distances retailers from consumer needs and wants. This is a bad move for CVS.