The retail industry has faced relentless challenges over the past few years, and even major drugstore chains are not immune to the shifting landscape. As reported by The Street, CVS has announced plans to close 270 underperforming stores this year as part of a larger strategic realignment. While the company continues to downsize its traditional footprint, it also intends to open new, smaller pharmacy-focused locations to adapt to changing consumer habits.
This move reflects the broader struggles facing retailers in a post-pandemic world, where rising operational costs, inflation, and evolving customer preferences are forcing companies to rethink their business models.
Retail’s Uncertain Future and the Challenges Facing CVS
Operating a retail business has never been easy, but the past five years have presented unprecedented difficulties. The retail industry, including pharmacy chains like CVS, has been navigating a series of compounding crises—beginning with the Covid-19 pandemic, which led to temporary closures, declining foot traffic, and the rise of e-commerce.
As businesses attempted to recover, they were met with soaring interest rates, increasing the cost of debt and making expansion or operational changes far more expensive. Inflation has also played a significant role in reshaping consumer behavior, with the Consumer Price Index (CPI) rising by 0.2% in February and an annual inflation rate of 2.8%. These economic pressures have made customers more selective about where they shop and how much they spend, forcing retailers to adjust to a more price-conscious market.
For CVS, which operates in a highly competitive pharmacy sector, these economic shifts have reshaped business priorities, making it necessary to close underperforming locations while exploring more efficient store formats.
CVS Closing 270 Stores While Adapting to New Shopping Trends
Despite its decision to shutter 270 locations, CVS is not pulling back from the retail pharmacy business entirely. Instead, the company is rethinking how it serves customers, introducing a new smaller store format that prioritizes pharmacy services. These small-scale locations, averaging 5,000 square feet or less, will focus primarily on prescriptions and essential health services, a shift that aligns with changing consumer preferences.
CVS recognizes that today’s shoppers are less brand-loyal and more cost-conscious, prompting the company to tailor its footprint to better meet community needs. A CVS spokesperson explained the company’s reasoning:
“By taking a customized approach to our footprint that is focused on the specific needs of the communities we serve, we’re continuing to strategically realign our pharmacy footprint to better support patients and ensure the right geographic coverage.”
Alongside store closures, CVS plans to open approximately 12 of these smaller locations, positioning them in areas where they can provide the greatest convenience and value to consumers.
CVS’s Larger Restructuring Plan
The 270 store closures are part of a much broader restructuring effort at CVS. Over the past two years, the company has already closed around 900 stores, streamlining its operations to eliminate weaker locations while investing in more sustainable retail models.
At the same time, CVS has opened around 100 new stores, reinforcing its commitment to pharmacy services while moving away from the traditional drugstore format that included a wide range of retail products. As of December 31, 2023, CVS continued to operate:
- More than 9,000 retail pharmacies across the U.S.
- Over 1,000 walk-in and primary-care medical clinics
This ongoing restructuring indicates that while CVS is reducing its overall store count, it is still focused on expanding in key areas where it sees demand for pharmacy and healthcare services.
