CVS Health, the leading pharmacy chain in the United States, has announced that it will be closing a number of its pharmacies located inside Target stores due to rising costs. The closures will begin in February and are expected to be completed by early April, affecting several of CVS’ 1,800 locations in Target stores nationwide.
This decision is part of CVS’ strategic effort to realign its national retail footprint and reduce store and pharmacy density. Impacted employees will be offered comparable roles within CVS to minimize the impact on their careers. Additionally, prior to the closures, CVS will transfer prescriptions to nearby CVS Pharmacies to ensure uninterrupted access to pharmacy care for patients.
The move comes as no surprise, as CVS had already cautioned investors last August about increasing expenses in its pharmacy and insurance business, which would ultimately impact the company’s profitability. In fact, last year CVS implemented a restructuring plan that resulted in the elimination of 5,000 positions.
This announcement from CVS coincides with similar cost-cutting measures by its competitors. Walgreen’s, one of CVS’s main rivals, recently announced plans to cut $1 billion in expenses for this fiscal year. Furthermore, Rite Aid, another major pharmacy chain, filed for bankruptcy last year.
CVS has been operating pharmacies in Target locations since 2015 when it acquired the business from the retail giant for approximately $1.9 billion. Target, however, has declined to comment on the situation and directed inquiries to CVS.
It is important to note that the closures of Target-based pharmacies are not the only reduction in CVS’s store count. The company had previously announced plans to close around 900 of its 9,000 stores between 2022 and 2024, with approximately 600 closures already completed by the end of 2023.
Overall, CVS’s decision to close pharmacies inside Target stores reflects its proactive approach to managing costs and optimizing its retail operations. While it may disrupt the convenience for some customers, the company’s focus remains on providing essential pharmacy services while ensuring the long-term sustainability of its business.
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