CVSHealth says it’s going to close roughly 300 stores a year over the next 3 years—almost 10% of its locations across the country—in what it claims is a reaction to changing customer preferences. The company says it is also going to try new formats for its stores. Some will be “traditional” pharmacies that also offer retail products and some healthcare services ; others will still attempt to offer primary care services. While new versions of their HealthHUB locations, which employ dieticians and other healthcare professionals, are also planned, such a drastic reduction in locations begs the question of whether retail drugstores can succeed as healthcare destinations. It was only a year ago that CVS said it was going to hire some 15,000 new workers to keep up with demand stoked by the COVID-19 pandemic—which continues, with millions of Americans newly eligible to receive booster shots. Another consideration is that many pharmacy chains, including CVS, built out a lot of locations to allow room for an expected onslaught of customers eager to get help in managing chronic conditions or see a primary care provider while picking up some shampoo and the latest issue of People magazine. A lot of it may have become wasted space, with the operators paying for real estate that’s not producing sufficient sales per square foot to justify the status quo.
CVS Is Closing 900 Stores. Does That Reflect a Decline in the Retail Health Model?