CVS Forced to Close Some Locations in Target Stores

CVS Health has plans to close dozens of pharmacies inside Target stores, as reported by The Wall Street Journal. 

The drug store chain will close the pharmacies between February and April this year, according to a company spokeswoman. The closures are part of CVS’s efforts to pare down its retail footprint “based on our evaluation of changes in population, consumer buying patterns and future health needs,” she said. CVS has operated pharmacies inside Target stores since 2015, when it bought the business from the retailer for around $1.9 billion. 

Employees affected by the closures will be offered other roles within the company, the CVS spokeswoman added. Customers’ prescriptions will transfer to other CVS pharmacies. 

Last year, CVS said that it would cut costs and 5,000 jobs as it remakes its business as a health care service company. It has also said that it would close around 900 stores, or about 10% of its U.S. locations, between 2022 and 2024. At the end of last year, it had closed about 600 locations as part of that plan. 

Retail pharmacies have had a tough go of late. As part of its ongoing bankruptcy case, Rite Aid revealed in November 2023 that it plans to close 31 more stores in several states, including California, Connecticut, Maryland, Michigan, New Jersey, New York, Nevada, Ohio, Oregon, Pennsylvania, Virginia and Washington.

The latest round of closings comes after Rite Aid revealed in October that it was shuttering 154 stores. A company representative said at that time that the decision to cease operations at underperforming stores was made to curb rent costs and strengthen Rite Aid’s overall financial performance.

Meanwhile, in October 2023, Walgreens Pharmacists walked off the job to call attention to what they described as poor working conditions that put employees and patients at risk. Following news of both corporate layoffs and store closure, Walgreens also revealed the closure of its e-commerce distribution facility in Illinois. Further, in its most recent quarterly earnings report, the company said that it was reducing its quarterly dividend payment by 48%.

CVS Health will hold a conference call with analysts and investors on Feb. 7 to discuss its fourth-quarter and full-year fiscal 2023 financial results.

With its CVS Pharmacy subsidiary operating approximately 9,000 locations nationwide, Woonsocket, R.I.-based CVS Health is No. 7 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.  Minneapolis-based Target Corp. is No. 6 on The PG 100, with nearly 2,000 locations. PG also included the company on its Retailers of the Century list. Deerfield, Ill.-based Walgreens and Philadelphia-based Rite Aid and are Nos. 5 and 22, respectively, on The PG 100.