Thanks for Visiting!

Register for free to get the full story.

Sign Up
Already have a account? Log In

CVS and Walgreens Winter Update

Shira Petrack
December 16, 2021
CVS and Walgreens Winter Update

CVS recently announced its plans to close approximately 900 stores over the next three years, while Walgreens has been expanding and diversifying its store fleet – but both brands have been investing heavily in developing their healthcare offerings. We dove into the foot traffic data to better understand these pharmacy leaders’ pivot into healthcare and to see how location analytics can inform which CVS store closures. 

Both Brands Strong

During the first year of the pandemic, visits to the pharmacy leaders took an initial hit (aside from the seasonal December foot traffic spike). But since March 2021, both Walgreens and CVS have seen their foot traffic skyrocket amidst the COVID vaccination drives and rising demand for health and wellness products alongside their wider range of offerings. 

But while Walgreens seems to be expanding and diversifying its brick and mortar channels by opening new small-format pharmacy-focused stores and at least 600 primary care practices by 2025, CVS recently made headlines when it announced in November that it “will close approximately 900 stores over the next three years to reduce store density and ensure it has the right kinds of stores in the right locations for consumers and for the business.” 

It is clear that CVS is operating from a position of strength. The announced store closings do not stem from any financial need to downsize its store fleet. Instead, the move should be viewed in the context of “right-sizing” to optimize its store fleet and execute its strategy of enhancing “omnichannel health services to meet the needs of consumers when and where they want it.”

CVS and Walgreens’ Pivot to Healthcare in Light of Heavy Cross-Shopping

Many Walgreens customers also shop at CVS, and many CVS customers also shop at Walgreens. The large shares of cross-shopping combined with the success both brands have been seeing shows that there is room at the top for two pharmacy leaders. 

At the same time, the large and increasing cross-shopping numbers may indicate that a significant number of consumers do not currently see substantial differences between the two brands. In this light, the brands’ respective move into the healthcare provider space will do more than just create an additional revenue channel – it will also likely increase customer loyalty, as patients who are being treated and monitored by Walgreens or CVS medical practitioners will now have a reason to choose one brand over the other.   

What CVS stores should be closed? 

Store closures are often seen as a cause for alarm, but when handled strategically, they can actually empower a brand to maintain its reach while increasing efficiency within its wider retail footprint. When approached like this, the impact of the closures can actually provide a net gain for the retailer. Potential store closures can be analyzed on a market-specific level, by identifying areas with large shares of underperforming stores that should be thinned out, or or on a property-specific level, by identifying redundant locations. 

One way to identify markets where store density should be thinned out is to establish a baseline visit performance for a region and identify the standard deviation for each region, which can then be used to identify under and over performing markets. We used our location analytics data to characterize ten of CVS largest markets, and found that, on average, only 6% of CVS stores in a given market were “underperformers.” Several markets, however, including Chicago, Boston, and Miami, had a larger share of underperforming outliers than average. 

Thus, it would not be surprising if these markets experienced a larger share of closures than markets such as Orlando or Phoenix that have a lower share of underperformers. This may also speak to areas that had been harder hit by COVID migration patterns and shifts in where and how people work.

Another critical factor is accounting for cannibalization. CVS stores do not only have to compete with Walgreens – the current number and distribution of CVS stores means that these stores often end up competing with each other. 

For example, the graph below shows four sets of nearby CVS stores, where the trade area of one CVS exhibits 70% or more overlap with the trade area of another nearby CVS. This means that the vast majority of customers of the cannibalized CVS also visit the nearby CVS. Closing these locations would not greatly inconvenience CVS’ existing customers – they can just continue to consume the company’s product and services at the nearby branch, which they already patronize. It would be likely, then, that CVS will close at least some of these cannibalized locations as part of its store fleet consolidation and optimization. 

Should CVS leverage this rightsizing effort to better maximize the efficiency of its reach, the result could drive a far more effective impact on a per store basis.

Will Walgreens continue to expand its store fleet? Will CVS focus on closing cannibalized stores, underperforming stores, both, or neither? 

Visit to find out.  

Get 3 brand & industry
breakdowns every week

Subscribe to the newsletter

Great! Prepare your inbox for data-driven insights...
Oops! Something went wrong while submitting the form.

Get a Demo

Please enter your first name
Please enter your last name
Please provide a valid email
Please enter your email
Please enter company name

Thanks for reaching out!

One of our experts will be in touch soon

Try Free
Oops! Something went wrong while submitting the form. Mall Index: April 2024 Recap – Retail Resilience Heading into Spring
Dollar Stores Still Gaining Momentum
Off-Price Apparel Chains After Q1 2024: Demographics in the Balance
Walmart, Target, and Wholesale Clubs Continue to Thrive
Home Improvement and Decor Check In Office Index: April 2024 Recap – Recovery Continues
Movie Theaters in Q1 2024: A Preview of Coming Attractions?
Let’s Get Physical: Fitness In 2024
Where Are Workers Returning to Office in 2024?
2024 Wins: Sweetgreen & First Watch on the Rise
A Full-Service Turnaround: Bloomin’, Dine, and Texas Roadhouse
Wendy’s and Denny’s: Breakfast and Late Night Dining Drives Success
Coffee Chains: Q1 2024 Update and What’s Changed Since COVID
Checking in with RBI and YUM!
Chipotle & McDonald's Serving Up Success
Wingstop & Shake Shack Continue Growing Their Reach 
Strong Start for Sprouts in 2024
Crocs’ Footwear Fairytale
Who Attends NCAA Final Four Events?
Eclipse Fever: How Did the (Retail and Hospitality) Stars Align?
Exploring Albertsons Companies’ Grocery Growth Mall Index: March 2024 Recap – Malls Rise Again Office Index: March 2024 Recap
Florida Spring Break Break-Up? Travelers Still Love Florida!
Provo-Orem and Ogden-Clearfield Emerging As Utah Hotspots 
Three Formulas for Experiential Retail in 2024
Aldi & Lidl Making The Cut
Texas Suburbs on the Rise
Exploring Luxury Hotel Brands’ Guest Segmentation
The St. Patrick’s Day Effect
How Can JOANN Make a Comeback?
Panera Bread Well Positioned for Possible IPO
Who Will Benefit From Family Dollar’s Downsizing?
Dave & Buster’s and Main Event Entertainment: Food and Fun for Everyone
Darden Brands: Location Analytics and Consumer Behavior
Nike and lululemon: a Strong 2023, Sprinting into 2024
Where Is Retail and Dining Foot Traffic Thriving in Early 2024? White Paper Recap – February 2024
Three Retail & Dining Chains That May Surprise in 2024
Specialty Discount Chains Rock Retail Therapy Mall Index: February 2024 Office Index: February 2024 Recap
Ulta Beauty Continues To Shine
First Watch Sails Into 2024
Hibbett Sports and DICK’S Sporting Goods: A Psychographic Analysis
Checking in With Discount & Dollar Stores
Peeking Behind The Curtain: Movie Theaters in 2023 and Beyond
Diving Into Brick-and-Mortar Eyewear
Getting Into Gear: Exploring The Auto Part Industry
Recapping Valentine’s Day 2024 Foot Traffic Trends
Fitness: A Strong Start to 2024
Dutch Bros. Continues To Percolate Visits
Super Bowl 2024:’s Postgame Foot Traffic Analysis
CAVA & sweetgreen Are On the Rise
Hats Off For Off-Price
Who Is Shopping at Malls?
Drilling Down Into Home Improvement
Walmart, Target, Costco & Superstore Space 2023 Recap
Catching Up With Shake Shack and Wingstop
Something To Chew On: Demographic Shifts at Steakhouse Chains Office Index: Looking Back at 2023
Recapping RBI & Yum! Brands’ 2023 Foot Traffic Performance White Paper Recap – January 2024
Who Shops at Anthropologie and Urban Outfitters?
Three Taco Chains to Watch in 2024
Starbucks and Dunkin’: 2023 in Four Data Points
Who Visits CVS and Walgreens?
Fashionably Frugal: Apparel in 2023
Catching Up With Fast Food
The Grocery Sector in 2023: An End-of-Year Recap
3 Mall & Shopping Center Trends for 2024
Bakery Chains Rising To The Top and Esri Partner to Deliver Geospatial Analytics
Tampa Tourism Trends
Going For The Green: The Changing Dynamics Of Country Clubs
Christmas Day Dining Recap
Major Urban Shopping Districts – Holiday Season Recap Office Index: December 2023 Recap
Recapping the 2023 Holiday Shopping Season White Paper Recap – December 2023
7 Retail & Dining Segments to Watch in 2024
Diving Into Holiday Season Favorites
Super Saturday and Christmas Eve Eve: A Winning Combination
3 Budget Grocery Chains Finishing 2023 On a High Note
Making It In America: International Chicken Chains Bring The Heat
Domestic Tourism at a Glance: A Q3 2023 Roundup
Five Pizza Chains On The Rise
Jewelry Brands Taking Advantage of the DTC Opportunity
Secondhand News: Kids' Thrift Shops
Recapping 2023’s Dining M&As
MetLife Stadium Kicks Off Football Season Office Index: November 2023 Recap
Small Coffee Chains Brewing Big Success White Paper Recap – November 2023
Thanksgiving Travel 2023 Recap
Checking in With Nike and Lululemon
Black Friday 2023 Retail Recap
Starbucks’ 2023 Holiday Menu & Red Cup Day Performance
Turkey Wednesday 2023
Who Attended the 2023 Pickleball Championship?