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.
What’s in Store for Self-Storage?
Nike + lululemon Update: Strong Performance Amid Expansion Plans
Many Ways to Win: Midwest Grocery Deep Dive
Retail, Reinvented: The Rise of the Pop-Up Shop
Navigating a New Normal in Business Travel & Commutes Office Index: February 2023 Recap
Retail Categories Staying Strong in Volatile Environment
Ulta Beauty: Poised for Success into 2023 Mall Index February 2023: Reasons for Continued Optimism
Catching Up With DICK’s & Hibbett
The Miami-Dade Arena: An Advertising Slam Dunk
Car Washes Revving Up Visits
Tuesday Morning and Sunrises in Home Furnishing
Dining & Valentine’s Day Recap
2023: The Year of the Discount Store
Aldi’s Success Highlights Growing Demand for Value Groceries
5 Retail & Service Categories Holding onto Pandemic Gains in 2023
Visitor Insights from Super Bowl 2023
2023 First Look: Home Improvement Update
How Are Target, Walmart, and Wholesale Clubs Faring in 2023?
Department Store Deep-Dive: Nordstrom
Off-Price: Taking Off in Uncertain Times
Checking in On Middle-Class Hubs
Who Attends the Super Bowl? Office Index: January 2023 Recap
Focusing On Fitness: Q4 and January Recap Mall Index: January 2023 – Returning Mall Normalcy?
Location Intelligence Insights Into Concert Attendance
Winning Dining Strategies for 2023
In-N-Out Burger: What to Expect as the Brand Moves East
Location Intelligence Breakdown: Coffee Caps-Off 2022
Digitally Native Brands Lean Into Brick & Mortar
Washington, D.C. Population Changes & Migration Trends
A Location Intelligence Perspective on Macy’s Rightsizing
Amazon-Powered Shopping: The Future of Brick-and-Mortar Grocery?
Cold Weather, Hot Visits: Diving into Winter Resorts
Wawa and 7-Eleven: Leaning Into the “Slurpee Effect”
2022 and Beyond: Catching Up With McDonald’s & Chipotle
Let’s Have Some Fun! Going Out Is In’s Q4 2022 Quarterly Index Adds Industry Executives to Leadership Team To Drive Company's Next Phase of Growth
5 Emerging Retail Formats: 2023’s Brick-and-Mortar Evolution
Grocery Update: Zooming in on the Lone Star State
2022 Office Recap: The Year of the TGIF Work Week
What Lies Ahead for Brick-and-Mortar Luxury in 2023 Mall Indexes: December 2022 Recap
Looking Back on 2022’s Holiday Shopping Season
Post-Pandemic Migration Trends in New York
Top Retailers for 2023
The Live Sports Advertising Opportunity
Domestic Migration to the Mountain States: Small Shifts with Big Implications
New Year, New Food: 5 Dining Trends For 2023
This is Why Shop-in-Shops Are Everywhere
Super Saturday 2022 Recap
The San Francisco Shift
Grocery Year-End Update: Publix in the Spotlight
Three Ways Retailers Can Think Small to Increase Store Impact
Offline Beauty Is on an Upswing
The Evolving Migration Patterns of New York’s Florida Snowbirds Office Index: November 2022 Recap
How Viral Social Media Trends Can Drive Offline Engagement
Are You Ready for Some Football? Experiential Marketing Shows Promise
Mall and Shopping Center Trends For 2023
Retail Corridors and Indoor Malls: A Holiday Head-to-Head
Placer Bytes: Nike, lululemon, and GameStop Update Mall Indexes: November 2022 Update
Black Friday 2022: Consumers Hear the Call
Digitally Native Brands: Taking Off, Offline
Discount and Dollar Stores Leading the Pack
Turkey Wednesday 2022
Retail’s Evolving Holiday Season
Placer Bytes: Starbucks and Department Stores Ahead of Black Friday
Ulta: A Force to be Reckoned With
College Towns Drive Dining Growth
Foot Traffic Trends Reveal Consumers Ready for Holiday Cheer
How Retailers Can Win Big By Going Small
How Are Consumers Feeling Ahead of Black Friday 2022?
Off-Price, Hibbett, and Dick’s Pre-Holiday Check-in
Ho, Ho, Wholesale: Costco, Sam’s Club, and BJ’s
October 2022’s Retail Rebound
Target and Walmart Ahead of the Holidays
Home Improvement: Leave it to the Pros
Despite Inflation, Holiday Season is Off to a Good Start Office Index: October 2022 Recap Mall Indexes- October 2022 Update
Americans Double Down on Fitness
The State of Grocery
CVS and Walgreens: The Wave Continues
Coffee Chains Brewing Up Visits Spotlight: Pizza Players
What Drove COVID-Era Urban Migration Trends?
Kroger and Albertsons: A Merging of Strengths
Texas Roadhouse Innovations Dishing Up Success
Holidays on the Horizon: Mid-Range and Luxury Shopping
McDonald's and Chipotle's Post-Pandemic Success
Announcing’s Q3 2022 Quarterly Index
5 Hot Restaurant Brands for 2023
Target Finds a Winning Deals Day Formula
Five Trends to Watch for 2022’s Holiday Shopping Season