CVS and Walgreens stores across the U.S. have begun a mass closing of locations as the pharmacy business declines, struggling to keep afloat.
CVS and Walgreens have announced they will be closing locations in the near future. Walgreens plans to close 1,200 stores by 2027, while CVS has already closed 900 stores from 2021-2024. CVS plans to continue to close stores in 2025.
CVS’ CEO explains the company’s future goals.
“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,” Karen Lynch said in a recent press release.
The CEO of Walgreens also commented about the closures.
“This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” Tim Wentwork said.
While stores close, jobs are decreasing in the industry. 2,900 of CVS’ employees were laid off in 2024. With more locations closing across the country, more pharmacy employees will be out of work.
The decline in profit for pharmacies can be attributed to a few causes.
Pharmacys main source of profit is from the sale of prescription medication, which is mostly paid by insurance companies. Due to an increase in medication costs from inflation, the amount of money pharmacies are reimbursed for (reimbursement rate) is lowered, overall lowering the pharmacy’s profit.
Their secondary source of income comes from non-prescription merchandise. Profit decreasing can be attributed to the rise of online shopping. All over-the-counter medications, thermometers, bandages, candy, and other merchandise can be found online at places like Amazon. Consumers can buy and receive same day delivery without having to get up from their couches with these online merchandisers.
While big pharmacies are suffering, family owned and local pharmacies have been going under for much longer. Having been pushed out by chain pharmacies like Walgreens and CVS as well as grocery store pharmacies.
A decrease in business in recent years for chain pharmacies has led to hundreds of locations closing across the country. Stores like CVS and Walgreens hope this decision will increase profit overall.
