CVS To Open New Mini Stores In Communities Lacking Pharmacies
As CVS Health prepares to close hundreds of stores this year, it is also planning to open 12 mini stores throughout the U.S. focused on medication rather than retail, doubling down on smaller footprints to tighten its belt.
The new stores will be less than 5,000 SF, about half the size of a typical CVS, The Wall Street Journal reported, citing CVS. The dozen stores will be placed in communities where residents may already shop at Walmart or dollar stores but don’t have a nearby place to fill their prescriptions and get vaccines, the company told the outlet.
The new stores will offer full-service pharmacies and health items like over-the-counter medications and first-aid products, the article states. But it will not feature convenience and retail items, including snacks, cosmetics and greeting cards.
More than 80% of CVS’ sales last year came from the pharmacy department rather than retail, Morningstar Senior Equity Analyst Julie Utterback told the WSJ. Pharmacies have been losing retail market share to online and discount competitors that offer the same products at lower prices, the article states.
The brand said it's being thoughtful in its mini-store location decisions.
“This work is really focused on introducing or adding pharmacy access in communities that are lacking,” CVS Director of External Communications Amy Thibault told the WSJ.
About 46% of U.S. counties have at least one pharmacy desert, defined as a community that is 10 miles or more from the nearest retail pharmacy, according to an August 2024 research letter in JAMA, the American Medical Association journal. The problem is worsening as more pharmacies announce store closures.
Walgreens announced in October that it would shutter 1,200 stores over the next three years. Walgreens Boots Alliance reported an operating loss of $1.2B for the six months ending Nov. 30 before it reached an agreement this month to be bought by a private equity firm.
More than one independent pharmacy in the U.S. closed per day during the year leading up to June 2024, and about 30% of the 89,000 retail pharmacies open between 2010 and 2020 closed by 2021.
The pace of closures is accelerating. CVS itself plans to close more than 270 stores this year after 800 net closures over the prior three years, though the company said 85% of Americans will still live within 10 miles of a CVS Pharmacy.
CVS closure decisions are based on factors such as population shifts and consumer buying patterns, the company said. The mini stores will add a different footprint to CVS’ offerings, which also includes pharmacies inside Target stores.
The brand plans to open 30 traditional stores this year, including some inside Target. The first few mini stores should be operating by the end of 2024.
