CVS Health Corp, one of the largest pharmacy chain stores in the U.S., is planning to close down 900 stores over the next three years. The number of stores that will be closed is equivalent to about 10% of the company's total stores in the country.
The company said Thursday that the planned closures are part of a strategy to adapt to the change in "consumer buying patterns." The company added that the closures would also ensure that it has the "right kinds of stores" in the "right locations," making its retail presence in the U.S. more efficient.
The company said that it will begin closing stores in the spring of 2022, shuttering 300 locations per year over the next three years. CVS aims to expand its health hubs, which include treatments for common health issues as well as chronic care, at its remaining locations. The long-term aim for CVS is to grow care delivery while decreasing its brick-and-mortar retail operation. CVS said it would be providing a list of locations to be shut down at a later date.
CVS currently has about 10,000 locations spread across the county. Apart from closing down some of its stores, the company is also planning to implement a remodeling of some locations to include more of its health services. The plan is part of a broader realignment of the company's business to highlight its other services.
Throughout the epidemic, Americans have gotten used to getting advice, testing, and immunizations from their neighborhood's CVS pharmacy. The company, along with other drugstore chains, had been key players in the rollout of Covid-19 vaccinations during the health crisis.
CVS CEO Karen Lynch said the company is also looking into expanding its digital presence to adapt to the needs of its consumers. Lynch, who joined the company last year, said the company is still committed to providing quality products and services to the thousands of communities across the U.S.
The company estimates that the planned closures will cost it about $1 billion for its fourth quarter this year. It added that the plan will also, unfortunately, impact jobs at the affected locations.
CVS is the largest drugstore chain in the county, with Walgreens Boots Alliance coming in second. Analysts at Global Data said CVS's decision to close down some of its stores makes sense since CVS has ignored its brick-and-mortar shops for far too long.
Walgreens has also switched its focus recently, investing $5.2 billion in healthcare provider VillageMD and $330 million in health services company CareCentrix.
