CVS is set to close hundreds of stores across the country as they undergo a complete retail overhaul – as more stores move towards online sellers amid rampant increases in crime.
The major drugstore chain has announced that they will be culling 300 stores by the end of 2024, and 600 more by 2027, around ten percent of all shops.
In the announcement, they said that they were undergoing a new ‘retail footprint strategy’, as retailers across the US struggle to adjust to post-pandemic footfall.
More shoppers are turning to buying online in the wake of the pandemic, as well as rocketing levels of shoplifting affecting sales in stores.
CVS claims that ‘local market dynamics, population shifts, and a community’s store density’ are some of the aspects they have looked into when deciding which stores to shutter.
The major drugstore chain has announced that they will be culling 300 stores by the end of 2024, and 600 more by 2027, around ten percent of all shops
CEO Karen Lynch said: ‘Our retail stores are fundamental to our strategy and who we are as a company’
A spokesman said: ‘Maintaining access to pharmacy services in the communities we serve is an important factor we consider when making store closure decisions.
‘Other factors include local market dynamics, population shifts, a community’s store density, and ensuring there are other geographic access points to meet the needs of the community.’
More customers are getting prescriptions filled online, retrieving personal care items through curbside pickup and visiting with doctors through telehealth.
Speaking at the time of the announcement, CEO Karen Lynch said: ‘Our retail stores are fundamental to our strategy and who we are as a company.
‘We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence.’
The company confirmed that they are pushing to turn more of it’s stores into healthcare destinations, in an attempt to drum up more claims for it’s insurance business.
It is also working to expand it’s HealthHub business, despite investigators finding in June that the company failed to provide proper interpretation services for individuals who are deaf or hard of hearing during their appointments with medical staff.
The Department of Justice and CVS came to a settlement agreement that requires the company to change its policies.
An employee workers in a CVS store in 2018. The chain’s stock price rose after the 2021 announcement stores would be closed as part of a switch in strategy
As of April 2023, stores had lost an estimated $86.6 billion to retail theft in 2022 – with projections indicating that by 2025, retail theft may cost stores over $115 billion
As part of the agreement they have to provide effective communication to individuals who are deaf or hard of hearing at all of its more than 11,000 locations.
The news comes after an investigation was conducted by the Rhode Island US Attorney’s Office, which first received a complaint from a deaf individual in April 2022.
In total CVS has 9,500 stores across the US, which will be reducing to 8,900 by the end of 2027 according to their plans.
The decision to shutter stores was first announced in November 2021 as part of a bid to focus on digital growth.
Physical locations were expected to close from 2022, with remaining stores transitioning to ‘health-care destinations’, offering shots and testing.
The decision initially saw share prices rise 2.81 per cent – jumping around 40 per cent through the course of the year.
Thousands of stores across the US have been forced to lock up basic products like toothpaste and deodorant following a spike in shoplifting.
As of April 2023, stores had lost an estimated $86.6 billion to retail theft in 2022 – with projections indicating that by 2025, retail theft may cost stores over $115 billion, according to CapitalOne Research.
Rival pharmacies are making similar moves to close their doors, with Ride Aid and Walgreens also closing stores
Stores catch shoplifters roughly 2 percent of the time, with the average shoplifter being arrested once out of every 100 incidents.
CVS declined to share the specific details of stores that would shutter, but in March closed locations in Des Moines, Iowa, Houston, Missouri, and Tallahassee.
The company acknowledged ‘many factors’ go into the decision to close a store, adding that current employees would have the option to continue working for CVS.
Another store in Albany, New York, closed this week, though the chain did not say if this was part of their planned shuttering.
Rival pharmacies are making similar moves to close their doors, with Rite Aid and Walgreens also closing stores.
Rite Aid announced it would close two more stores earlier this month, following the closure of 25 stores earlier this year, amid reports the company is preparing to file for Chapter 11 bankruptcy.
Rite Aid forecasts it will generate ‘approximately $650 million and $680 million’ in losses next year.
Rite Aid’s chief financial officer and executive vice president, Matthew Schroeder, said: ‘We’re constantly looking at performance of stores, particularly ones that don’t have much lease life left on the lease and determining whether we’ve got an opportunity to continue to maximize the profitability and the efficiency of the fleet.
‘I would expect us to continue to do that.’
Walgreens also closed a store in Berkeley, California, on August 23 this year, and is planning to close at least 150 stores as part of a cost-saving strategy, while making upgrades to remaining locations.
Post source: The List
