CVS Closing Dozens of Pharmacies Inside Target

[ClownLoach]

Well, the agreement seems to state as long as the agreement is active, Target cannot operate any pharmacies. It also says Target cannot sublease any space to any other pharmacies. I am not clear if that is at ALL stores or only stores with CVS inside. I wonder how that worked in ND, I guess just no pharmacy at all.

I am very surprised the agreement does not address what happens if CVS elects to close a pharmacy. The agreement has pretty heavy detail on what happens if Target closes a store.

I read it as CVS is obligated to operate, and by closing they therefore are no longer in compliance with the agreement which might trigger remedies listed and not listed (as some of the agreement is redacted due to confidentiality). Everything redacted is a single asterisk, which could be anything from a word to entire pages. I think this statement below in the contract will address the matter as this is obviously an issue they did not anticipate, which means now they will have to come to a new agreement about the space. If they can't come to an agreement then it will wind up being litigated.

2.5 The Parties have endeavored to create an agreement that anticipates issues and decisions they shall face together in the future. Inevitably, issues may arise which CVS and Target did not anticipate. The Parties agree that they shall work together in good faith to maintain collaboration between the institutions and agree to discuss any issues of concern, providing written notice to the other and causing their Senior Officers to meet in person to seek to expeditiously resolve any differences.

[ClownLoach]

At Super Targets, I figure they would just dismantle the pharmacy structure since I've always seen them freestanding. In regular Target's where they are generally up in the front wall, I wonder if the best use is as a staging area for online orders. Just need to add an outside door to access the parking lot.

Some of the SuperTarget pharmacies have a freestanding restroom next to them. Not all though. The restroom ones might be more complicated to remove if that was needed.

Most Target stores have already been remodeled in the back room and front end to accommodate drive up storage (although there are still some stragglers with space partitioned off in the Cafe or next to Guest Services). The offices and break rooms up front were torn out and became drive up order storage in most of the stores that had them, and those facilities were rebuilt in the stockroom. I've heard team members hate the change as they have a long way to walk now to go on break and thus are subject to many customers asking them for assistance while they are on break. For some reason they chose in many cases not to use the built in employee entrance door that was in the middle of the building on these two entrance format stores; the windows that were frosted to create light in the breakroom are painted over and the door has signs outside with warnings to the fire dept. that say "Door Is Blocked" or "Exit Walled Off". A few Greatland and Super format stores were able to reconfigure one of the front corners and wall off part of the sales floor to create this storage, such as the Super by my house that has a Pickup counter that is completely separate from Guest Services (they kept their up front offices and break room). For those with pharmacy along the front wall, this could potentially be a solution for drive up as long as the parking lot configuration would allow for the spaces to be there and the structure would allow for a wall to be cut to create a door. But I think the pharmacy space is rather limited and might not be ideal if it is far from Guest Services as many customers still come in to pick up their orders in person instead of waiting in their cars; they would wind up with additional unproductive walking time on the busy sales floor as they go between the counter and the storage room.

I still think Target will wind up arranging to reopen it's own pharmacies, but may have to buy out the CVS agreement to do so. That section of the agreement I posted is intentionally vague but we should remember that when that was written nobody ever thought CVS would be shrinking while Target had just closed some US stores and all of Canada. Their fortunes have reversed.

[storewanderer]

I am reading in the CVS Reddit some of these Target units did extremely low volumes, like under 100 prescriptions a day. That is unreal to me with what I know and see of CVS always backed up. A busy CVS does practically 100 prescriptions in an hour (okay not that many, but it sure feels like it). No wonder they want out of these. I'd love to find that CVS that does under 100 prescriptions a day, the service must be excellent.

I am not sure just how important pharmacy is to Target, at this point in time.

I know Wal Mart and Fred Meyer run extremely high volume pharmacies. I can't speak for Meijer. So it seems like pharmacy is kind of an important component of this type of store. But maybe Target's overall offer is strong enough that pharmacy doesn't matter.

It just seems like with the foot traffic Target has, they should be able to have a successful/busy pharmacy.

[Romr123]

Meijer at least has a Medicare Advantage plan with Blue Cross Blue Shield of Michigan where the preferred pharmacy is Meijer. Don't use them myself, but they were also a key COVID vaccination provider in Michigan. Have to presume they're pretty high-volume if both of these things are the case (and remember that conversely WM is not particularly high-volume in Michigan...)

[ClownLoach]

I am reading in the CVS Reddit some of these Target units did extremely low volumes, like under 100 prescriptions a day. That is unreal to me with what I know and see of CVS always backed up. A busy CVS does practically 100 prescriptions in an hour (okay not that many, but it sure feels like it). No wonder they want out of these. I'd love to find that CVS that does under 100 prescriptions a day, the service must be excellent.

I am not sure just how important pharmacy is to Target, at this point in time.

I know Wal Mart and Fred Meyer run extremely high volume pharmacies. I can't speak for Meijer. So it seems like pharmacy is kind of an important component of this type of store. But maybe Target's overall offer is strong enough that pharmacy doesn't matter.

It just seems like with the foot traffic Target has, they should be able to have a successful/busy pharmacy.

CVS strips the staffing out of these stores so they still wind up giving a bad experience. They also do not stock all of the drugs, leaving the customer having to wait for orders to come in. The last time I used a CVS at Target specifically I had a nasty upper respiratory infection. They said they had to order an ordinary albuterol inhaler as they never stock them at that location, and they were staffed with only the pharmacist and a pharmacy student in their University lab coat was the technician and the cashier. Of course they recommended that I go to a different CVS nearby that had the inhaler in stock. My perception has been that at least in SoCal the Target pharmacies did very good business and we know they were profitable based on the high purchase price CVS paid. The relationship between the companies was bad from the start, there is a severe cultural misfit between the brands, and the CVS standard of creating very bad service models meant that they were doomed from the beginning.

Customers were going to Target pharmacy to avoid CVS and other bad actors. Target advertising made this clear as they bragged about friendly and knowledgeable service plus the easy to use technology like their fancy pill bottle that CVS immediately killed to save a few pennies per order. The arrival of CVS meant that the customers who went to Target to avoid CVS would find a new pharmacy. I know a lot of people who will stand in a long line at Costco pharmacy because they are easier to work with. You call and a real human picks up the phone in the actual store pharmacy every single time and doesn't place you on hold. They have the same staff so they get to know you, while CVS you never see the same person twice behind the counter except maybe the pharmacist. Their insurance works at Costco or CVS, but they drive right past a CVS or two with drive through service because they feel like they're a number at CVS but a valued customer at Costco. I take my elderly aunt to get her prescriptions at Costco, her insurance is zero co pay for most, and we drive past 4 CVS locations because the Costco pharmacy folks are so nice and their knowledge of the customer makes them more efficient... They see she's next in line and they already have grabbed her items off the shelf.

CVS failed at Target because they did not understand what they were buying; a group of pharmacies serving customers who were looking for better service than what CVS provides.

[buckguy]

I am reading in the CVS Reddit some of these Target units did extremely low volumes, like under 100 prescriptions a day. That is unreal to me with what I know and see of CVS always backed up. A busy CVS does practically 100 prescriptions in an hour (okay not that many, but it sure feels like it). No wonder they want out of these. I'd love to find that CVS that does under 100 prescriptions a day, the service must be excellent.

I am not sure just how important pharmacy is to Target, at this point in time.

I know Wal Mart and Fred Meyer run extremely high volume pharmacies. I can't speak for Meijer. So it seems like pharmacy is kind of an important component of this type of store. But maybe Target's overall offer is strong enough that pharmacy doesn't matter.

It just seems like with the foot traffic Target has, they should be able to have a successful/busy pharmacy.

CVS strips the staffing out of these stores so they still wind up giving a bad experience. They also do not stock all of the drugs, leaving the customer having to wait for orders to come in. The last time I used a CVS at Target specifically I had a nasty upper respiratory infection. They said they had to order an ordinary albuterol inhaler as they never stock them at that location, and they were staffed with only the pharmacist and a pharmacy student in their University lab coat was the technician and the cashier. Of course they recommended that I go to a different CVS nearby that had the inhaler in stock. My perception has been that at least in SoCal the Target pharmacies did very good business and we know they were profitable based on the high purchase price CVS paid. The relationship between the companies was bad from the start, there is a severe cultural misfit between the brands, and the CVS standard of creating very bad service models meant that they were doomed from the beginning.

Customers were going to Target pharmacy to avoid CVS and other bad actors. Target advertising made this clear as they bragged about friendly and knowledgeable service plus the easy to use technology like their fancy pill bottle that CVS immediately killed to save a few pennies per order. The arrival of CVS meant that the customers who went to Target to avoid CVS would find a new pharmacy. I know a lot of people who will stand in a long line at Costco pharmacy because they are easier to work with. You call and a real human picks up the phone in the actual store pharmacy every single time and doesn't place you on hold. They have the same staff so they get to know you, while CVS you never see the same person twice behind the counter except maybe the pharmacist. Their insurance works at Costco or CVS, but they drive right past a CVS or two with drive through service because they feel like they're a number at CVS but a valued customer at Costco. I take my elderly aunt to get her prescriptions at Costco, her insurance is zero co pay for most, and we drive past 4 CVS locations because the Costco pharmacy folks are so nice and their knowledge of the customer makes them more efficient... They see she's next in line and they already have grabbed her items off the shelf.

CVS failed at Target because they did not understand what they were buying; a group of pharmacies serving customers who were looking for better service than what CVS provides.

Probably regional differences in volume. The Target pharmacies I saw weren't super busy and the couple times I used them there was nothing remarkable about the service. I would imagine that the small Targets with CVS pharmacies don't do a big volume and those would be the most likely to close, esp. if there is a CVS nearby (I can think of multiple examples of this).

In their recent closings, though, CVS was willing to close stores that were near a Target with CVS prescription department, so I doubt they are planning to pull out of these entirely.

[Alpha8472]

Pharmacies bring a lot of sales to Walmart stores. When customers fill prescriptions they full up entire shopping carts while they wait. Target should realize that pharmacies bring in more sales to the rest of the store.

Target should open their own pharmacies. CVS does nothing but drive customers away with bad service.

[BillyGr]

Pharmacies bring a lot of sales to Walmart stores. When customers fill prescriptions they full up entire shopping carts while they wait. Target should realize that pharmacies bring in more sales to the rest of the store.

Target should open their own pharmacies. CVS does nothing but drive customers away with bad service.

Maybe that didn't happen as much if these Target pharmacies were not doing as much volume?

Both in less people to shop in the store with less pharmacy customers, and also that those who were picking up not having as much time to "waste" since the prescriptions were probably ready quicker than they might be at a busy Walmart location.

[storewanderer]

I think CVS wants it both ways.

They want to be able to close stores where their front end loses a lot of money near a Target and force the customers over to the Target CVS. CVS wins because they can make money on the pharmacy counter and don't have to deal with the money losing front end.

But then when the Target unit is too low of volume (since CVS ran it poorly and drove off customers), CVS wants to close that unit and leave the Target missing a key department expected in a mass merchandise store: a pharmacy.

So I think CVS has its cards played pretty well.

The losers?

1. The customer. Fewer pharmacy choices, less competition, having to travel further to obtain essential prescription goods.

2. The employees. Fewer job opportunities, management promotion opportunities to run their own pharmacy (since CVS is closing hundreds of pharmacies), and being placed from a moderate volume Target unit to a HIGH stress typical CVS unit.

4. Target. No pharmacy in store. Dealing with a tenant who agreed to operate pharmacies but is now closing then. Target needs to reopen its pharmacies.

Despite staffing cuts over the years Wal Mart runs a good pharmacy operation. All you have to do is observe one of their pharmacies to see they run quite well. The employees there do not seem stressed out at all. Compared to CVS or Walgreens which are understaffed and beyond stressed out.

[veteran+]

If Chain Drug Stores (especially CVS) cannot figure out how to run a profitable Front End they should go out of business.

I mean seriously folks...................REALLY? They are categoric idiots (in the clinical sense).

I wish CVS would seriously be punished by Target, Customers, Employees and the entire industry. I also wish Wall Street would destroy them.

Vile company......................sorry for the rant. Who do they think they are?