Is opening pharmacies in other chain stores CVS’s new thing?
CVS has signed a definitive agreement to acquire Schnuck Markets’ retail and specialty pharmacy businesses.
The deal means that the drugstore giant will acquire 99 of the grocery chain’s pharmacies inside Schnuck stores and operate them under the CVS logo. In 11 other locations, CVS will acquire patient records and transfer them to its own nearby stores. The deal is expected to close by the end of the second quarter, the financial terms yet to be disclosed.
CVS, according to the St. Louis Post-Dispatch, currently operates more than 40 pharmacies in the St. Louis and Metro East areas in a market “dominated” by Walgreens. The additional 99 pharmacies will substantially boost the presence of CVS in the area and help it compete on a more equal footing.
“One of CVS Health’s strategic imperatives is to be local. By opening CVS Pharmacy locations within Schnucks stores, we’re increasing access to high-quality care and meeting customers where they are,” said Jon Roberts, executive vice president and chief operating officer, CVS Health, in a statement.
“As Schnucks continues to expand our emphasis on health and wellness, this collaboration with CVS is an opportunity for us to align with a company that has a similar focus,” said Todd Schnuck, chairman and chief executive officer of Schnucks. “This partnership allows us to continue to provide quality pharmacy services to our customers in a manner they’ve come to expect while supporting our mission to nourish people’s lives.”
In 2015, CVS reached a $1.9 billion deal to acquire Target’s pharmacies and operate them under its own banner. While significantly larger than its agreement with Schnucks, the deal now appears to be a model for the chain to expand its pharmacy footprint without the expense of building and maintaining new drugstores.
- CVS Pharmacy signs agreement to acquire, rebrand and operate Schnucks Pharmacies – CVS Pharmacy, Inc.
- CVS to take over Schnucks pharmacies; pharmacy in Kirkwood store to close – St. Louis Post-Dispatch
- Will CVS and Target be stronger together under one roof? – RetailWire
- Will the Target/CVS pharmacy deal lead to a future merger? – RetailWire
DISCUSSION QUESTIONS: Is the acquisition of pharmacies operating inside of big box chain stores a growth model that you expect CVS to continue to pursue? Do you see this approach as preferable to CVS opening more of its own standalone drugstores?