CVS Makes Another Big Strategy Shift
CVS is shaking up its business model as the retail industry continues to experience epochal changes due to the COVID-19 pandemic.
The company is closing at least 900 stores over the next three years as it adjusts to "changes in population, consumer buying patterns and future health needs," the company said in a news release.
As part of the company's strategic review of its retail business, CVS Health will also create new store formats to drive higher engagement with its customers. Three distinct models will serve as community health destinations:
- Sites dedicated to offering primary care services.
- An enhanced version of HealthHUB locations with products and services designed for everyday health and wellness needs.
- Traditional CVS Pharmacy stores that provide prescription services and health, wellness, personal care and other convenient retail offerings.
The closures will cost the company about $1 billion dollars in the fourth quarter of 2021.
The news comes after the company reported strong numbers for third quarter of 2021, with revenues up 10% year over year, totaling $73.8 billion. Total revenues year to date increased to $215.5 billion, an increase of 8.2% compared with the prior-year period.
"Our retail stores are fundamental to our strategy and who we are as a company," said Karen Lynch, president and CEO of CVS Health. "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."
The company said it is “committed to offering impacted colleagues roles in other locations or different opportunities as part of its overall workforce strategy.” The chain employs over 300,000 people, including more than 40,000 in the medical field.
With its CVS Pharmacy subsidiary operating almost 10,000 locations nationwide, Woonsocket, R.I.-based CVS Health is No. 7 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.
