CVS Closing Dozens of Pharmacies Inside Target

[ClownLoach]

Go back in time though... Target was adding in pharmacies and aggressively marketing them especially in California at the same time all the East Coasters came in and bought up Sav-On, Thrifty, Payless, and Longs. They definitely got some positive movement here from those changes for anyone who had insurance that worked at Target (who had pretty good acceptance overall). They retained those customers after all the consolidation until CVS took over the Target pharmacies. This might not be the story in other markets but I'm sure it was here. CVS was hated almost immediately upon arrival by customers and employees (the fact they went on a very public witch hunt to fire as many high paid Sav-On managers and replace them with people who were paid 50% less didn't help win them any new friends).

Maybe Target had enough store penetration there in SoCal for people to start to connect them with pharmacy, but up here in Reno where Target just had one pharmacy during much of that consolidation time period, few people even knew they offered pharmacy. The second local Target Pharmacy opened in the Sparks relocation in around 2010 or so. They didn't market pharmacy at all in this market.

Up here in Reno area as recently as during COVID they still had a couple Sav-On managers running stores (not the same stores they ran as Sav-On, they got moved around). One is gone, didn't look retirement age, the other one who was a DM under Sav-On seems to be doing this for fun and could have retired long ago but was still there as of last summer. One long term Longs Manager was still running her store until very recently and I suspect may have retired; it was a terrible store over the years even as Longs, the facility is owned by CVS and is not maintained well, under CVS the store stunk, had constant HVAC issues all year, probably plumbing issues too based on the odor sometimes (other times the odor is that "old heater" smell); just a miserable place, but I noticed last year she was finally replaced, oddly the store got remodeled after that and the odor issues/HVAC issues seem to have been fixed. That store already has a third store manager now (the replacement didn't last long). There are still a few other Longs Managers running their stores up here, but they weren't very long term Longs people.

They must have been paying more in California... CVS was on a mission to purge every Sav-On Manager and succeeded. Several worked for me and told of how they were harassed by CVS management and held to impossible standards that were not in place at all in stores where management changes had already occurred. The new Store Managers were being brought in for less than the old Assistant Managers were being paid at Sav-On. Can't speak to what they did outside California but it was a 100% purge. Good thing is it was their loss and a big gain for other companies that were able to hire these very experienced and very good managers.

[ClownLoach]

The other thing is it seems like when CVS got involved, Target got a lot more aggressive with ensuring every new store had a pharmacy. It seemed like prior to that they didn't always include a pharmacy in their new stores? Maybe I am wrong on this.

I haven't visited a lot of Targets outside California, but I didn't realize there were any Targets without pharmacies. I thought pharmacies had been standard for a long time. Even the former "City Target" stores had them. Where were these pharmacy-free Targets located? Are you talking about right before the CVS deal, or decades ago? I'm kind of curious now.

Not all the small format Target stores in SoCal got a pharmacy. One of the more notable examples I gave earlier was Long Beach at the infamous "Iron Triangle" intersection that is the busiest in town, it opened in a former Ralphs Fresh Fare that was effectively relocated a few blocks away. It had a CVS in a former Longs in the parking lot and as a result they did not add a pharmacy to the store even though the CVS itself was busy and running out of lease term. They moved the files to a newer, high rent location next to Gelsons that they were probably stuck with and was underperforming.

Ocean Beach in San Diego also didn't get a pharmacy.

Santa Barbara is 2 stories but they couldn't find room for a pharmacy.

[ClownLoach]

The other thing is it seems like when CVS got involved, Target got a lot more aggressive with ensuring every new store had a pharmacy. It seemed like prior to that they didn't always include a pharmacy in their new stores? Maybe I am wrong on this.

I haven't visited a lot of Targets outside California, but I didn't realize there were any Targets without pharmacies. I thought pharmacies had been standard for a long time. Even the former "City Target" stores had them. Where were these pharmacy-free Targets located? Are you talking about right before the CVS deal, or decades ago? I'm kind of curious now.

When Target invaded metro Chicago in the 1990's, all of their new stores were built with pharmacies. Can't speak for post-2000 openings (that's when I moved away), but all of their stores built in the subsequent years had pharmacies. Except for one (which received a pharmacy when it was remodeled) every Target I shopped in metro San Diego had a pharmacy, as did the LA and San Francisco Bay area stores.

I think Target and CVS should end this rental agreement and let Target operate their own pharmacies. I'd call it a partnership, but it clearly isn't one if CVS can close pharmacies at will.

I can't imagine that there is a restriction in the deal that would prevent Target from reopening a pharmacy that CVS closes. All complicated business deals like these have details as to what will happen if one party closes, pulls out etc. Usually closing means waiving rights.

It's also going to be interesting to see exactly which locations get closed. I'm betting anything with a CVS out in the parking lot, across the street etc. even if it's a "big" Target.

This relationship obviously was not going well as I had stated even before this announcement, and it would be interesting to know exactly what level of control CVS had over all these small format stores that didn't get pharmacies. I know Long Beach they had control. But all this shows Target had, either by choice or by force, moved away from every new store having a pharmacy once the CVS deal was in place.

Way back when this deal was completed I can't help but wonder if the eventual goal was for the companies to merge, but instead CVS changed direction and decided to move more into the insurance and Healthcare business and put a much lower emphasis on retail.

[storewanderer]

They must have been paying more in California... CVS was on a mission to purge every Sav-On Manager and succeeded. Several worked for me and told of how they were harassed by CVS management and held to impossible standards that were not in place at all in stores where management changes had already occurred. The new Store Managers were being brought in for less than the old Assistant Managers were being paid at Sav-On. Can't speak to what they did outside California but it was a 100% purge. Good thing is it was their loss and a big gain for other companies that were able to hire these very experienced and very good managers.

I think they're union in CA but they aren't union at least up in this part of NV. So if the clerks get a higher wage/union then that trickles up to the managers too, ideally, so I could see that. Sav-On had some very long tenured/high tenure clerks (some of them looked nearly 80 years old, could barely stand up at the register but were able to cashier just fine with the small items) and had worked there since the 60's or 70's. Those clerks weren't there long after CVS took over.

I know there was a lot of what you describe occurring at Longs too. That kind of made sense because Longs was a strange organization, they had a culture that was very stubborn, and rather snotty for no good reason (given their stores were old dumps). From what I can tell there aren't many old Longs managers left in CVS at the store level. Lots of external hires at the district level, moving people around from place to place often, and ongoing turnover at all levels seems to be how it goes with CVS. The old Longs and Sav-On chains did not do that type of stuff- they had long tenured people at all levels of management and didn't excessively keep moving people around geographies to put out fires the way CVS has to, because they had fewer fires.

[veteran+]

They are just a nasty company in so many ways.

New stores turn dirty so fast it's incredible.

Sometimes they build or take over architecturally beautiful stores and within a year they are dumps. Two of them come to mind:

1. Sunrise & Ramon in Palm Springs
2. La Cienga & Santa Monica in West Hollywood

Smart n Final does this as well.

[storewanderer]

They are just a nasty company in so many ways.

New stores turn dirty so fast it's incredible.

Sometimes they build or take over architecturally beautiful stores and within a year they are dumps. Two of them come to mind:

1. Sunrise & Ramon in Palm Springs
2. La Cienga & Santa Monica in West Hollywood

Smart n Final does as well.

CVS charges top dollar for its products and services. I expect better from this type of organization.

Smart & Final pricing isn't good but definitely isn't top dollar. I make my few trips in a year, sometimes pick up an item or two, 50/50 on if I buy something or leave empty handed. That's a store I wouldn't miss one bit if it went away. Even Sprouts I'd miss in some ways.

[Knight]

If CVS is closing its acquired Target Pharmacy locations in Target, I wonder what the future holds for acquired Schnucks Pharmacy locations in Schnucks.

[HCal]

If CVS is closing its acquired Target Pharmacy locations in Target, I wonder what the future holds for acquired Schnucks Pharmacy locations in Schnucks.

My (completely wild) guess is that CVS is paying Schnucks a lot less rent than Target. Schnucks might be happy to give them the space for a song in order to attract customers to the store, while Target would probably negotiate much harder.

[pseudo3d]

I can't believe that there wouldn't be some sort of clause to allow Target to take back control of any pharmacies CVS closed, either by forcing them to stay open, allowing them to re-lease to a third party, or just cancel the lease altogether and recycle it as store space.

[ClownLoach]

If CVS is closing its acquired Target Pharmacy locations in Target, I wonder what the future holds for acquired Schnucks Pharmacy locations in Schnucks.

My (completely wild) guess is that CVS is paying Schnucks a lot less rent than Target. Schnucks might be happy to give them the space for a song in order to attract customers to the store, while Target would probably negotiate much harder.

I don't recall any discussion of rents back when this deal happened. I think it's exactly what you describe with Schnucks - they can have the space because it's intended to bring traffic.