CVS Pharmacy has decided to close 10 percent of its outdated locations. The pharmacy has decided to close these stores over the course of the next three years. The decision has been taken as the company is shifting its focus towards customers who are giving preference to online shopping. The companies that are likely to be benefitted from this decision are Walgreens or Rite Aid. The company in a release said that it would convert stores into destinations into a location that will offer a wide range of healthcare services. From vaccines for flu to a diagnostic test, everything will be made available at these locations. The process to close these stores would begin in spring 2022. The company said that around 300 stores would be closed every year. However, it has refused to share any specific information related to the locations of these stores that will be closed. There are around 10,000 stores of CVS in the United States. The drugstore chain did not mention how many employees will lose their jobs because of this decision. But it said that the company will extend all possible support to impacted employees find a different opportunity at other locations. The decision to shake up the business comes as the Covid pandemic has accelerated changes in consumer behavior.
As life has started limping back to normalcy, more and more people are shifting to online prescriptions. They are consulting with doctors through telehealth and retrieving personal care items through curbside pickup. The company said that the locations where stores will be closed totally depend on changes to the population, customer habits, and health needs. But chief executive officer Karen Lynch said that all stores being closed will play a key role. “Our strategy is focused around our retail stores. This defines our company. We will continue to focus on the kind of advantage that we get by our presence in thousands of communities across the country. This will complement our rapidly expanding digital presence,” Lynch said. The drugstore chain has now put effort to turn more of its stores into one-stop health care destinations. This will help the company to drive more foot traffic which in turn would help it drum up more claims for its insurance business. CVS is already running around 1,100 MinuteClinics. These clinics provide urgent care for common illnesses. There has been an expansion of one store format called a HealthHub. Customers get more services at these stores. From a variety of medical products to other wellness features like screening for chronic conditions and rooms for yoga.
CVS is planning to work on having more than 1,000 HealthHub locations across the country by the end of 2021. For this, it will adopt three different store formats. While the first group will offer primary care services, the second will be converted into HealthHubs. The last group will remain traditional stores that fill prescriptions along with selling items from milk to shampoo. These stores will also be integrated with Aetna – its health insurance business. CVS had acquired the business in 2018. The insurance business helps the company in getting more customers as benefits of Aetna encourage members to take care at CVS stores. These customers can take services from CVS’ MinuteClinics. Apart from this, the drugstore chain also owns prescription benefit management subsidiary Caremark. A company spokesperson said that while deciding about the store’s future, CVS will consider things like the number of people with Aetna and Caremark getting services from that particular store. The entire drugstore industry is facing disruption as several retail giants have joined the market. This has forced CVS to seriously consider ways to stay relevant.