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CVS is closing 900 stores. Here’s why.

CVS is closing stores as consumers move online

Vehicles are parked in front of a CVS Pharmacy.
Vehicles are parked in front of a CVS Pharmacy in Mount Lebanon, Pa., on Monday May 3, 2021. CVS Health will close hundreds of drugstores over the next three years, as the retail giant adjusts to changing customer needs and converts to new store formats.
Gene J. Puskar, Associated Press

CVS Health is planning to close about 300 stores every year for the next three years, according to Barron’s.

  • That represents nearly 10% of its outlets, according to BBC. A list of closing stores hasn’t been released yet.
  • The company will start closing stores and reducing store density in early next year.
  • Additionally, impacted employees will be offered roles in other locations or different opportunities altogether.

During the pandemic, CVS, along with other pharmacy chains, were key in rolling out COVID-19 vaccines in the U.S., per BBC. The company acquired health insurer Aetna in 2018 and since then, it has been planning to expand the services offered, the report added.

  • “Our retail stores are fundamental to our strategy and who we are as a company,” said Karen S. Lynch president and CEO of CVS Health in a statement, reported by Barron’s. “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.”

Per Barron’s, retailers need to provide services, products, or experiences that aren’t readily available online, which is something CVS is looking to do.

The company wants to optimize in-person experiences through dedicated sites that offer primary care, enhanced versions of HealthHUB locations that offer everyday health services, and providing what a traditional pharmacy would, according to the report.

  • “CVS has neglected stores for far too long and has pushed some of them into the downward spiral of irrelevance,” said Neil Saunders, a retail industry analyst said in an ABC report.