The Pharmacy sector has become one of the most interesting sectors in retail because of the expanding ambitions of some of its leading players, and the appeal from the potential entry of retail’s largest giants.
We broke down some of the sector’s classic leaders to see who’s positioned for 2020 success.
Walgreens Ups & Downs
Walgreens didn’t have an easy 2019, ending the year as one of the worst-performing companies. But, overall foot traffic for Walgreens has seen both ups and downs over the past few years. When we take the period of January 2017 through December 2018, we see an increase in overall traffic. Yet, in 2019, each month saw lower visits than the same month in 2018 year-over-year.
In spite of this, there may be a silver lining. The slow traffic is likely attributable to Walgreens shuttering of nearly 200 stores last year. And focusing on optimizing its offline retail footprint could provide a huge advantage, even if its short term impact will likely continue to produce lower visit levels. The real question is whether the brand can stabilize and optimize its retail footprint.
CVS Trends Up
It’s easy to have a positive 2020 outlook for CVS, as the retailer saw a significant overall year-over-year traffic increase when analyzing the period between January 2017 through December 2019. But even more exciting is that the brand is hardly resting, and is instead embarking upon an aggressive plan to further expand its influence in the space. With the addition of its in-store HealthHUBs, CVS has positioned itself well among its competitors as the leading one-stop-shop pharmacy. Since the inception of the HealthHUBs, CVS has experienced spikes in traffic, not only for the specific locations but nationwide. The combination of growing overall foot traffic with strategic initiatives like HealthHUBs, should position the brand well for 2020 success.
Rite Aid Woes
Rite Aid has seen a decline in foot traffic from January 2018 through December 2019, despite seeing rising visits throughout most of 2017. Walgreens bought nearly 2,000 Rite Aid locations and has since closed 631 of those stores, with plans to shutter additional locations in the next year. The closures are more than likely the reason Rite Aid’s overall visits are down, but similar to Walgreens, these closures might provide an opportunity for Rite Aid to plan, refocus and get back on track for 2020.
Will CVS continue to outperform its competitors or can Walgreens and Rite Aid turn an underperforming 2019 into a strong 2020?
Check back in with the Placer blog to find out.