CVS to close 900 stores

[BillyGr]

We have a few spots like that here as well.

One that pops up is a situation where they were in the process of building a store in one town when they took over the Revco group (which was quite a while back now - just looked and it is 1997!).

Revco had a very small store (like 6 aisles) in a city nearby, with the result being two CVS within less than 2 miles of each other.

Both are still open today (though the small store right now has only 9-6 hours on weekends and 8-9 weekdays, and the pharmacy is even shorter like 10-5 weekend and 9-8 weekday).

That would be an example where they could likely close the smaller location, bring the staff from there to the larger one and keep 99% of customers happy (more customers, but also more employees to help them, while still saving the cost of operating 2 buildings).

[storewanderer]

In Reno the stores were initially Skaggs and were some pretty original stores to the chain, had store 3, store 6, a store 41, etc. but think their numbering was a bit strange and may have been by area vs. the chain as a whole. They eventually rebannered to Osco in the 80's then Sav-On in the 90's. Skaggs/ASC never had any grocery operations in the Reno market and it wasn't until 1999 where the Albertsons merger took place that there was finally a related grocery operation in the market. These drugstores always had a heavy focus on consumables and liquor; especially liquor.

CVS in some of the stores with larger food areas did actually sign agreements with grocery wholesalers to stock those departments initially when they got Osco/Sav-On to attempt to keep a mix comparable to what was being offered by Albertsons. That arrangement did not last long. CVS also did expand the food category when they purchased Longs, on the canned goods and such that Longs used to have a lot of. But CVS seemed to lose sight that Longs was a quasi-Grocery Outlet type of store that ran good values on odd generic canned foods and other strange grocery items which was not something CVS had any interest in doing.

Much of Longs food merchandising was done by placing a variety of random items on center aisle type displays they would call a 4 by 4. These items were often random unrelated items and what was put on these was often decided by the store.

It was not pretty- but it drew traffic and kept people browsing.

[Brian Lutz]

Bartell Drugs still does similar center-aisle displays with a seemingly random selection of food items in their stores, at least the ones that have enough space for them.

[Romr123]

The combination I'm curious about will be if Discount Drug Mart out of Cleveland ends up with any surplussed CVS toward Toledo and into Michigan. They have kind of a unique old-fashioned mash up of drugs and low priced sundries/consumables/produce/cryovac meat. Very popular in and around Cleveland, and seems to do well in smaller cities/towns west of Cleveland (Fremont/Oberlin/Vermilion/Sandusky). Another strange mash-up in Cleveland is Marc's, which is more like Grocery Outlet meets pharmacy.

[buckguy]

Marc's current stores are more than twice the size of the typical CVS. I've only been in a couple Discount Drug Marts and those are smaller, but still larger than a typical CVS---their prototype is 24K sf. The older CVS store stock in NW Ohio and Michigan might include some Revcos which were much smaller than their typical store now, so even less likely to become Marc's or Discount Drug Mart.

[storewanderer]

Discount Drug Mart kind of reminded me of a Longs or a Drug Emporium type of place. Really was a step back going into that store. The one I went into was a modern looking freestanding building outside, even with a drive through pharmacy. Once inside, it was like being transported back 30 years. I was surprised they even had scanning registers.

Marc's was a weird place. Seemed like a Big Lots meets Grocery Outlet meets 99 Cents Only.

All of the above are clearly depending a lot more on sales of merchandise than prescriptions. Whether or not that is how they want it to be, that is how it is, and they seem to operate accordingly.

CVS on the other hand, even moreso than Walgreens in my observation, is really hitching its future on non-merchandise sales. It is so clear CVS has determined it will be way more profitable through the Caremark side, the pharmacy and "health services" area than they will be by trying to focus more efforts on selling front end items.

[ClownLoach]

Some of the coverage of the closure announcement was very critical of CVS and their operations. Several investor firms described the stores as "depressing", "irrelevant" and "poorly merchandised". The CNBC article was very harsh and negative in tone about the customer experience in their stores.

[storewanderer]

Some of the coverage of the closure announcement was very critical of CVS and their operations. Several investor firms described the stores as "depressing", "irrelevant" and "poorly merchandised". The CNBC article was very harsh and negative in tone about the customer experience in their stores.

CVS has starved the stores of front end labor for years. Their remodels upon store conversion were not particularly well done and did not age well. I do think the stores that have gotten a second remodel actually look pretty good and feel they have cleaned up the merchandising in those stores a bit as well.

Their ongoing attempts to have "exclusive" brands of cosmetics continues to be one flop after another where they re-brand what is basically Dollar Tree-level product and try to sell it for $5-$10 then run constant Extra Bucks promotions week after week where they will give you back Extra Bucks that equal the product price if you take a couple off their hands. To top it off they will see you take these items from them a few weeks then start issuing you coupons for them so it ends up that they pay you to take the items off their hands. At least Walgreens with No. 7 and Soap and Glory has legitimate owned brands there in that category (and even being sold at other retailers) that they usually sell at full retail.

The one category where I think all of these drugstore chains seriously underperform is vitamins. How did these chains lose that category the way they have? They have a ton of SKUs but seem to be completely ineffective at moving any volume of product. They spend hours every week putting up/taking down the sale tags for the never ending buy one get one free sales that seem to just change brands every week.

I also think it is important to note CVS has 9,900 stores but about 1,700 of those are inside Target, another 99 of them are inside Schnucks. I wonder how many more are inside hospitals, etc.

[Super S]

I also think it is important to note CVS has 9,900 stores but about 1,700 of those are inside Target, another 99 of them are inside Schnucks. I wonder how many more are inside hospitals, etc.

Seeing what is happening with Bi-Mart in the Pacific Northwest, and how most pharmacies are closing while only a handful of the existing pharmacies will be taken over by Walgreens, I have to wonder if some of those Target-based pharmacies will be among the closures. Keep in mind that Target didn't even have pharmacies in most of their stores until they started including them during the 1990s in new stores and adding them in remodels. In areas like the Pacific Northwest, where CVS has very few standalone stores, the Target stores are the majority of CVS pharmacy locations, but in areas where a Target is in close proximity to a CVS, I wonder if some consolidation could happen. I realize that Bi-Mart and Target are two different chains, but Target does co-exist with freestanding CVS stores in many areas.

[storewanderer]

Seeing what is happening with Bi-Mart in the Pacific Northwest, and how most pharmacies are closing while only a handful of the existing pharmacies will be taken over by Walgreens, I have to wonder if some of those Target-based pharmacies will be among the closures. Keep in mind that Target didn't even have pharmacies in most of their stores until they started including them during the 1990s in new stores and adding them in remodels. In areas like the Pacific Northwest, where CVS has very few standalone stores, the Target stores are the majority of CVS pharmacy locations, but in areas where a Target is in close proximity to a CVS, I wonder if some consolidation could happen. I realize that Bi-Mart and Target are two different chains, but Target does co-exist with freestanding CVS stores in many areas.

Part of what was announced internally at CVS but has already been posted publicly by others, stated that the Target locations were not going to be impacted by this announcement. I was wondering about that too.

I think there is some kind of a deal where they have to keep operating those pharmacies inside Target as a group.

Some states like WA, OR, AK, or ID where CVS hardly has any presence outside Target, it seems like buying Rite Aid would make complete sense. But based on what is happening now, maybe not.