There is a proposal drawing a lot of hate in my city. CVS wants to buy several buildings containing long-established local businesses, and tear them down to build a new drugstore. They already have a store half a mile down the street, and there is a Hannaford around the corner from this site. I spent a lot of time in drugstores as a POS technician, and the stores I was sent to were usually empty during business hours. I saw very few customers. I very highly doubt that this new store CVS wants to build has a game changing new way to sell aspirin and phone cards. What good is it going to do to have another store to maintain? It’s not like the one down the street ever has long lines. All the chains keep building more and more stores, but they are already near existing ones and don’t offer anything new.
Is Walgreens planning to build their own store across the street too?
I don’t know about it being a bubble about to burst, but in some areas, it’s becoming a duopoly between Walgreens and CVS.
Does the existing CVS have a Minute Clinic? That is something new that drugstores offer. It’s kind of brilliant of them, too, because it not only is a way to entice people in to the store but there is a good chance the people will be sitting around waiting to see the nurse (while shopping) and then choosing to have their prescriptions filled there and waiting to pick them up.
Someone must have crunched the numbers and found that it was worth it monetarily to build a new bigger store with a Minute Clinic then to maintain the existing one.
There are four Walgreens within a block of 4th and Market in downtown San Francisco, and another three within a few more blocks. Plus one CVS. They all seem fairly busy, but then there is a lot of foot traffic around there. On the other hand, they closed one at a small strip mall out where I live not long after the grocery store closed in the same mall.
So yes, I think it is all driven strictly be economics, and they probably know what they are doing. They keep changing things (like offering better food choices) and adding different kinds of products that they sell (OTC medicines seem to take smaller and smaller areas in the stores, indeed sometimes they are hard to find). I think they fill a niche that used to belong to Woolworth’s and what we called the dime store (although nothing there is particularly cheap). Just a place you can go to pick up a few items.
On the Strip in Vegas, there’s a Walgreen’s or a CVS on pretty much every single block, and they seem to be making a killing based on my experience when I’ve been in town. In that market, at least, they seem to be fulfilling several niches; filling prescriptions for tourists, cosmetics and what-not for those who didn’t think to pack their makeup with them, package liquor sales for people who don’t want to pay the exorbitant prices casino gift shops charge for bottles, and fresh-ish foods for people who have a fridge and/or microwave in their room and don’t want to eat out every meal for some reason.
We had a CVS that closed and a new one open 400 yards away. I talked to the cashier and she said it was because the decided they should have a 24 hour location in the neighborhood. And whatever formula they use decided the old location wasn’t suitable to convert to 24 hours so they needed to build a new one.
I’m in commercial real estate and the take on the mid to big box drugstores relative overpopulation is that there will be winners and losers. Rite Aid was seen as a loser but has been struggling back. This perceived weakness is reflected in the unspectacular cap rates investors are willing to pay for Net leased Rite Aid stores. CVS and Walgreens are the powerhouses. There will be blood on the floor at some point.
Rite Aid is already in the process of being sold to Walgreens. And you might have noticed that CVS brands itself as “CVS Health” now. They want to do more than just fill prescriptions and sell health & beauty products. They also want to offer vaccinations, urgent care clinics and more. I think part of it is that once you’re getting your prescriptions filled at one of these stores, you might buy other stuff while you’re there.
I live in a Starbucksian CVS/Rite-Aid area, where there seems to be one on every corner. Often, there are few shoppers buying the shelved stuff.
Are RX prices so high that the pharmacy basically carries the wider store?
There are 17 Walgreens stores in Madison, which is at best a mid-sized city. Most of them have been around a long time, though, and I don’t see them as on the brink of collapse.
Both companies definitely treat their employees very poorly. :mad:
Drug stores always seem to be able to diversify to become general purpose department stores. When you see 'em having sales on lawn furniture and portable barbecues, you know they’ve branched out.
Two thoughts on the OP, does the proposal mention whether the existing CVS will continue operating? It sounds like that one will close once the new one opens. And, how often were you there after 6pm? I would say the stores around here are busiest after everyone gets off work and stops to pick up their scripts and sundries after work and on weekends. I tend to go to Walgreens either before 4pm on weekdays or after 9pm strictly to dodge the glut of people.
On a sort of related note, have all the Walgreens nationwide stepped up their game in the personal care and beauty aisles? The ones around here are all newly re-done with gorgeous backlighting, better cosmetics and higher end personal care stuff. I thought it was just the big downtown ones (two stories, with a salon and boutique and large high-end displays and tons of SPACE) and the newer constructed ones, but it appears to be all of them now?
I was in my old neighborhood the other day and walked into a Walgreens that looked the same old place from 10 years ago with the same facade and darkish parking lot, and expected the same old place inside, and was WOWed when I walked in. I was going there from an Ulta across the street looking for newish products that Ulta either didn’t have or were higher priced than I expected, and the Walgreens was bright, wide-aisled, and had ALL of the stuff I was looking for, all on sale. It was the best shopping trip ever to a Walgreens for cosmetic-related stuff and they’re my new go-to before Ulta now, since back in my home neighborhood there’s a Walgreens in walking distance and Ulta’s a bit of a drive.
I haven’t heard anything about the existing CVS near the proposed new one closing. The proposal is only for a new store, with no mention of the fate for the old one.
I used to mock this development until I needed to go to the pharmacy for things that were desperately needed. If the location had been across the Strip or a few casinos away, I would have done without. But since the location was right outside my hotel, I could make several trips and not have to suffer. And as stated, they can be quite handy for people who don’t want the hassle of TSA measuring their liquids and dealing with the additional weight in their luggage. Just pack light and buy what you need when you get there.
I’m glad I got to grow up in a town that didn’t have a single chain store.
CVS and Walgreens do seem to have an almost unique ability to shutter a perfectly good building in order to put up another one six feet away, and yet remain profitable.
CVS is now the tenth largest company in the USA, and the 35th largest in the world. If their goal is to make money (I suspect it is), they must be doing something right. It is not difficult to find “Health care” and “racketeering” in the same sentence (368,000 google hits).
Their goal clearly isn’t just to make money. They lost a significant amount of revenue by dropping cigarette sales, and while one could cynically argue it was worth it for the PR I highly doubt they ever projected the image boost offsetting the loss of cigarette customers.
Ugh, CVS. I hate them.
They’ve also bought Target pharmacy, so wait for the service there to go to pot. I’ve already experienced it once from them. “We thought we could order this medication that you’re almost out of, but we’ve found out two days before you run out that we can’t get it. And it’s a Friday, and no pharmacies get deliveries on the weekend because reasons. Good luck!”
Maybe Bernie Sanders can break up the drugstore monopoly.