One day in the near future, you’ll walk into a Target store. The pharmacy’s logo will still be red, but it will have a heart and read CVS instead of the familiar bullseye. The rebranding of the pharmacies and clinics inside Target stores has begun.
The first store to be converted to a CVS pharmacy within Target has been completed in Charlotte, NC. Within six to eight months, all 1,672 pharmacies inside of Target stores will be rebranded.
Back in June, the two companies announced a $1.9 billion deal for CVS to take over pharmacy operations inside of Target’s stores along with in-store clinics, which will be rebranded as MinuteClinic. CVS will also be opening in Target’s smaller stores as it expands its Express concept. The deal not only gives CVS deeper penetration into markets where it already operates, but a foothold in new ones, including Denver, Portland, Salt Lake City and Seattle. Target gets cash and the ability to concentrate on its core business.
The CEOs of CVS and Target both believe they can peacefully coexist under a single roof with the drugstore operator focusing on prescriptions and Target responsible for over-the-counter medicines and other non-prescription health needs.
“We know we have CVS customers who are shopping Target, and vice versa,” CVS Health CEO Larry Merlo told USA Today. “We think that this partnership really serves as a complement to the customer experience and customer accessibility.”
CVS is not particularly concerned about losing non-Rx sales to Target. Total prescription revenues for CVS Health including its PBM business was $83.2 billion last year, according to Pembroke Consulting (via Fortune). Walgreens had the next highest take at $54.4 billion. Target did $4.2 billion in prescriptions in 2015.
- CVS Health Introduces First CVS Pharmacy Locations within Target Stores – CVS Health
- CVS/pharmacy is now in Target – CVS/pharmacy
- CVS launches rebranding of Target Pharmacy – USA Today
- Q&A: CEOs of Target, CVS say pharmacy deal benefits both chains – USA Today
- CVS Opens First Pharmacies Within Target Stores – Fortune
- Will the Target/CVS pharmacy deal lead to a future merger? – RetailWire