A spate of recently announced closings has led economists to question the long-term health of the venerable brand.
This article is based on corporate postings and accredited media reports. All linked information within this article is fully-attributed to the following outlets: TheBusinessJournal.com, Wikipedia.org, Statistica.com, Inc.com, and Google.com.
In February, 2022, TheBusinessJournal.com was among the media outlets that reported on CVS Pharmacy’s plans to close 900 of their locations over the next three years. See here for “CVS Closes Local Stores. See Where the Ax Falls First,” which states: Maintaining access to pharmacy services in underserved communities is an important factor we consider when making store closure decisions,” Prinzing said in an email. “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, including COVID-19 testing and vaccinations. In fact, we have more than 20 additional CVS locations throughout Fresno and Clovis, including one HealthHUB that offers patients affordable, quality health services and products designed for a broad range of health and wellness needs.”
The stores in the process of closing were also said to be largely due to the increase of new e-Commerce services as well as health-related factors.
Let us explore further.
Wikipedia.org features a comprehensive overview on CVS Pharmacy. As excerpted from the Wikipedia page: CVS sells prescription drugs and a wide assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards, and convenience foods through their CVS Pharmacy and Longs Drugs retail stores and online through CVS.com. It also provides healthcare services through its more than 1,100 MinuteClinic medical clinics as well as their Diabetes Care Centers. Most of these clinics are located within or outside CVS stores.
The company was founded in 1963, and is currently the largest such chain in the United States in terms of locations. According to Statistica.com, by the end of 2021 there were 9939 locations throughout the country.
In November, 2021, Inc.com put the matter of the 900 announced closings into perspective. In their article titled “CVS Isn't Closing Its Doors--It's Becoming the Company It Set Out to Be Nearly 60 Years Ago,” it is stated that while the company is maintaining most of its locations, the company is effectively shifting to a new business model — the model it had originally set out to be.
As excerpted from the article: Your local CVS will no longer necessarily be a place to go when you realized you're out of milk or to pick up a greeting card--and never mind a late-night destination to grab that 6-pack when no other stores nearby are still open. But your local CVS will be turned into "destinations that offer a range of health-care services, from flu shots to diagnostic tests," according to the company's news release. In other words, a place to go for all things health--as one would expect a pharmacy to be.
In so many words, the company is effectively enacting a new start, and not shutting down either temporarily or permanently.
A targeted Google.com search verifies the news of the 900 store closures have led to rumors about CVS Pharmacy going out of business. As we have seen time and again, such rumors travel quickly, and when they hit social media they tend to become more widespread.
As mentioned, there is nothing to indicate that the 900 store closures represent poor financial health for the company; rather, these actions on the part of CVS Pharmacy appear strategic in nature, and will distinguish them from competitors such as Walmart.
Thank you for reading.