CVS executives are noticing the shift in the way its customers shop and they’re out to do something about it. CNN reports that the convenience store/pharmacy franchise is closing 900 stores over the next three years. According to the report, its stores account for roughly 10% of its footprint. The decision came amid the store’s response to the changing of “consumer buying patterns.”
The drug store announced Thursday, Nov. 18, that the closures will create a retail presence that promises it has the “right kinds of stores in the right locations for consumers and for the business.” Stores will begin closing in Spring 2022. The list of locations selected for closures have not been released.
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CEO Karen Lynch says the closures are part of a larger realignment strategy. There are currently 10,000 locations. Some remodeling is set to take place include more health services, including primary care. There’s also a plan for an “enhanced version” of its HealthHub layout.
“We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence,” Lynch said in a statement. She became CEO of CVS a year ago. Lynch’s promotion made her the 40th female chief executive on the Fortune 500 list. She’s been with the company since 2012.
As a result of the closures, CVS is expected to lose about $1 billion dollars in the fourth quarter of 2021. Employees at locations that close will be offered jobs at nearby locations.
Neil Saunders, retail industry analyst and managing director of GlobalData, said others should learn from CVS regarding having “too many overlapping locations” and outdated model of the stores which he says have “pushed some of them into the downward spiral of irrelevance.”
“Too many stores are stuck in the past with bad lighting, depressing interiors, messy merchandising, and a weak assortment of products. They are not destinations or places where people go out of anything other than necessity,” Saunders added.
