My area overrun with chain drugstores: how do they stay in business?

A ginormous Walgreens opened a mile away from me last week. We now have:
-Rite Aid: one is 1.4 miles away, the other 9/10 mile.
-CVS: one is 9/10, across street from RiteAid. Other is 1.5 miles.
-New Walgreens is 1 mile away.
-Additionally, there are five Indy pharmacies within 1.5 miles.

How do these places stay in business and why multiple chain stores so close together? Are pharma drugs incredibly profitable? All these stores are stocked to the gills, but often rather deserted of customers.

There are three major and two indy grocery stores operating in the same 1 mile circle, so folks don’t need to pay higher $ for staples at drugstores. Liquor/beer is only sold in licensed liquor stores in this county, so that’s not a moneymaker.

I’m baffled.

Is there a big medical center in or near your city? That may explain it.

Yeah, CVS and Walgreens are engaged in a big old whizzing contest on many levels, one of them being “How poorly can we treat our employees, especially the pharmacists, and have them continue to work for us?” :mad: (20 years ago, it was Osco and Walgreens, often with disastrous consequences for all involved.)

The independent pharmacies stay afloat because they have an established clientele or fulfill a niche market, like veterinary compounding (i.e. creating dosage forms that are not commercially available).

My BFF works at an independent store in a small college town; it stays solvent in large part because they have a contract with a nursing home and are also the go-to place for local sports team souvenirs, mostly t-shirts and sweatshirts. And a few days ago, I was noodling around, looking at websites for an area where I would like to vacation, and found a small-town independent that is ALSO a place that sells locally produced handmade jewelry on consignment; is the town’s Verizon outlet, and has a corner devoted to Radio Shack merchandise; perusing THAT website informed me that the “stores” that still exist usually rent space in other businesses, usually independent hardware stores.

I don’t entirely understand it, either, but both CVS and Walgreens have very sophisticated methods for figuring out store placement, so either it’s the pharmacy margin, or the markup on the convenience-store part of the stores.

And, you should see what downtown Chicago looks like. It’s difficult to walk more than 2 blocks without encountering either a Walgreens or a CVS.

government subsidized prescription payments and insurance everything else is extra …

The reason theres so many is 1 personal preference 2 some places will deal with medicines that others wont and 3 some of the drugstore chains have a limit on how many medi-cal/medi-caid/ ect cases each place can/will handle …

Kenobi, that makes sense, in large part because Walgreens started in the Chicago area and is headquartered there.

In the past decade or so, the field has become oversaturated to the point where some places get 100 or more applications for each job. :eek: This is most common for big-city hospitals, which in recent years have limited their hiring to new graduates who have done residencies, but some retail places have experienced this too.

I get the impression that filling prescriptions is only a small part of the business now and that much more of the sales is the cosmetics, candy, seasonal stuff and basics like milk and bread. Plus Walgreens bought a bunch of Rite Aid stores last year, and they’re going to close about 600 of them, so one or both of the Rite Aid stores mentioned might close soon.

I have always understood Walgreens likes big corners for their stores. We had a war of sorts around here when Wal-Mart came to build a super center. There was only one open corner and the other 2 were well established businesses, one being a locally owned Pharmacy. Walgreens and McDonalds were fighting for that corner. McDs won out and Walgreens moved on. The rumor was the local guy(pharmacist) grabbed the corner early and sold it to McDs. To save his business. Smart, if true.

Give us an estimate as to the population served by these stores.

Can I piggy-back onto this question?

There are two Bedmarts and two Mattress Firms all within a mile of my home. I have a really hard time fathoming how the demand for something the average person needs to buy once every ten or twenty years justifies four mattress stores in such close proximity. Yet there they are… and that’s on top of other, full-blown furniture stores in the same area! How do they all stay in business?

ETA: the second link shows a Sleep Number mattress store as well. So that’s five within a mile of my home!

That kind of depends on what the options are and what/how much you are buying. I wouldn’t do my regular grocery shopping at a CVS - but if I just want shampoo my choices are

  1. Go to the supermarket and spend at least 20 minutes getting the shampoo and getting on line and paying
  2. Go to Target- same thing
  3. Go to BJ’s and spend even longer
  4. Go to Rite-Aid or CVS and spend 5 minutes getting the shampoo and paying. And the Rite Aid/CVS may be cheaper than Target or the supermarket.
  5. Go to a bodega which will take 5 minutes but I will pay more than Rite-Aid/CVS charges

About 26,000 in five-mile radius, but there are six more chain pharms if expanded to town limits.

Cecil Adams published a column a couple of years ago on the question of why so many mattress stores.

I’m puzzled, too. We have a CVS store that opened about 2 years ago right across from a Wal-Mart. The Wal-Mart is bustling with customers, the CVS, not so much. Empty, even. I’ve priced items in both; WM beats CVS every time.

And 3 miles down the road is a Walgreens. Their prices are astronomically higher than anywhere else. I went there once to check this out and I was repelled by the prices.

The only reason I have shopped at either the CVS or Walgreens is because WM is out of stock (rare) or I want to see the variety to choose from. Often I end up buying online anyway.

I don’t see how these stores can stay in business, unless their only customers are the ignorant masses.

The game might be to get people’s prescription business and then to use that as a hook to get them to buy other stuff. “As long as I’m at CVS, I might as well get milk and bread. And we need more shampoo, so I can get that at the same time.”

I’m less familiar with Walgreen’s but I know that CVS pushes its loyalty card pretty heavily. It might be that the prices are much better if you’ve got one of those cards.

And note that CVS has expanded the number of urgent care clinics in its stores. They also bought a big pharmacy benefits business a few years ago and more recently made an offer to buy the health insurer Aetna. So the actual retail business is only part of the overall strategy. (The company is now called “CVS Health”.)

I think it’s about financial services. Chain drugstores sell phone cards, prepaid credit cards and money orders. People without bank accounts have to buy these products on a regular basis, and pay heavy fees to do it.

(ETA - regarding Cecil’s column on mattress stores)
I think he missed a trick - if you’re in the business of selling large infrequent purchases like mattresses, you’re better off building your store next to an existing mattress shop, unless you can get right away from them to a totally unserved area. Certainly if I were shopping for a mattress and I saw there were three in a block ten miles east of me, or one by itself three miles north, I’d be heading east - because that gives more choices.

That works because mattresses are a ‘dedicated trip’ purchase, not a ‘just drop in’ purchase. It wouldn’t be the mechanism for pharmacies ending up next to each other

I am surprised any drug chain can beat a Walmart pharmacy. People are in the store anyway. I don’t use Wal-Mart pharmacy because of the wait. I don’t like to be in that store anymore than I have to.
I am anxious to see how any of them do, people are doing mail order so much more, these days for prescriptions.

Some health plans require you go to a particular drugstore to get prescriptions. And you usually can’t choose your employer-supplied plan. So CVS expands because they have a captive clientele.

Drugstores have been expanding like this for years as boomers age and need more meds.

And now that you’ve brought up the mattress shops, I am reminded of Hotelling’s law. One of the references on that page is specifically about CVS and Walgreen’s. A CVS spokesman agrees that " it’s not surprising that his company and Walgreens often wind up so close to each other, because both are looking for the same things: population density, visibility, easy access. The presence of senior housing is key, he said."

CVS has their own mail order pharmacy, Caremark. My health plan uses this as the mail order place we have to use.

Thankfully they also let us use a lot of other pharmacies. Caremark even includes local stores in the prescription comparison feature of their web site.

With regards to buying meds in-store as opposed to by mail, I have two prescriptions I get in person. One is super fucking expensive and while the mail order is slightly cheaper, it requires me to get 90 days at a time and I can’t afford that kind of payment up front. I have to get the 30 days at the pharmacy. Also, this med happens to be refrigerated and I prefer not to get the huge refrigeration pack in the mail. It is SO much waste and I have no idea how to recycle the foam.

I think there’s a lot of reasons physical drug stores can survive en masse. Even with grocery store pharmacies (like I use) and mail order. The number one reason at least here is that they’re convenience stores first and foremost. Our Drug Mart even has a legit DELI in it!