CVS to Close 46 Stores in a Shift Away from Retail
One CE retailer that admittedly doesn’t pop up too often on our radar is CVS Health. But after seeing the news of 46 slated store closures, it was necessary to take a second look. The drugstore chain is gearing up to shift its retail presence toward more of a health care services focus, and in doing so felt it was necessary to drop some of the dead weight.
CVS came in at No. 97 on our Dealerscope Top 101 CE Retailers list for 2019, but next year, the drugstore could potentially not make the list at all. CVS CEO Larry Merlo told USA TODAY that the company plans to reduce floor space previously dedicated to retail products to offer more health related services, including the addition of “hundreds” of teeth-alignment SmileDirectClub shops within many stores. It remains unclear where the company plans to cut back, but CVS notably carries beauty, personal care, food, and consumer electronic items among many others.
The opportunity to move away from retail seemingly presented itself during the first nine months of 2018. CVS reported that pharmacy prescription sales accounted for three times that of retail product sales. Merlo said he envisions "CVS Pharmacy evolving from not just a store that happens to have a pharmacy and products" into "more of a health care destination."
The elimination of the 46 stores represents a mere 1 percent of the 9,600 CVS Pharmacy stores across the U.S. Even though the “store rationalization charge” will end up costing CVS about $135 million in first-quarter earnings, operational profits for the year are estimated between $11.8 billion and $12 billion.
Some store closures were underway last month, notably in Chicago, San Francisco, Minneapolis, and even Springfield, Missouri which used to be home to the largest CVS in the world. A full list of locations on the chopping block can be found here.