CVS Health plans to close 900 stores over the next three years, or close to 10 percent of its current fleet, a move that it says is part of a broader re-evaluation of its retail and healthcare strategies.
The closings will begin next spring.
According to the company, "As part of the company's strategic review of its retail business, CVS Health will also create new store formats to drive higher engagement with consumers. Three distinct models will serve as community health destinations: Sites dedicated to offering primary care services … An enhanced version of HealthHUB locations with products and services designed for everyday health and wellness needs; and … Traditional CVS Pharmacy stores that provide prescription services and health, wellness, personal care and other convenient retail offerings."
In its coverage, the Wall Street Journal offers some context:
"CVS, with around 10,000 locations at the end of 2020, added dozens of stores since 2018 while rival Walgreens Boots Alliance Inc. closed nearly 600 in that time. After decades of proliferation, the two giants comprise an ever-larger share of U.S. drugstores as independent pharmacies and small chains shut down or are acquired by CVS or Walgreens.
"Both chains have played a key role in the rollout of Covid-19 vaccines during the pandemic. Retail pharmacies working in partnership with U.S. health officials have administered close to one-third of vaccines given to date, with CVS and Walgreens delivering the bulk of those shots. In many cases, when a drugstore closes, CVS or Walgreens acquires the patient list and starts serving those customers at existing locations.
"Staffing shortages have stressed both chains, as pharmacists and pharmacy technicians scramble to juggle Covid-19 testing and vaccines with filling prescriptions and serving customers. CVS said it hired nearly 20,000 pharmacists, pharmacy technicians and nurses in the most recent quarter, which included a one-day career event meant to draw 25,000 new workers."
- KC's View:
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This seems perfectly in synch with what has been CVS's approach for some time now, which has been to redefine itself as it tries to redefine healthcare. Or maybe it is trying to redefine healthcare as it tries to redefine itself. No matter.
Listen, I still think CVS has a long way to go. But the fact is, deciding to lop off 10 percent of your store fleet is a hard decision. They get a lot of credit for that, I think.
One of MNB's rules for most of the past 20 years has been, "Stores have to be a resource for the customer, not just a source of product." CVS seems to be a strong example of putting that phrase into action.
