Pharmacies have been deemed “essential” by the government and have been allowed to remain open during the pandemic. But, many pharmacies are more than just an alternative place to stockpile goods, with a focus on necessary items like medications. They’re expecting to serve as additional testing stations for COVID-19.
So, we looked at three of the top pharmacies in the country to see how significant the impact of the virus has been on traffic to these retailers.
Strong Second Week
As expected, visits for pharmacies have been strong throughout the pandemic. When we measure average weekly visits between January 2019 to March 22nd, 2020 we see each retailer drawing significant traffic increases for the second week of March. Visits for CVS during this time were 27.8% above the baseline, amounting to a 27.1% increase in visits compared to the equivalent week in 2019, the highest week of traffic for the brand among the period measured.
The second week of March 2020 also garnered a major traffic increase for Walgreens. Visits for the retailer for the second week grew 29.9% year-over-year from visits that were exactly at the baseline for the period in the equivalent week in 2019.
And, results didn’t vary when we analyzed traffic to Rite Aid, another pharmacy giant. Visits for that second week were 27.0% above the baseline, a 24.2% increase from the same week in 2019 when visits were 2.8% above. And, similar to CVS, this week was the highest trafficked week throughout the period measured.
Seeing as major supermarkets in the US also saw similar traffic patterns for the same week in March, with the weekend generating the highest visits, that second week of the month might have been the turning point that drove people to essential stores, stocking up on any necessary items, in turn boosting visits.
Interestingly, while all three brands saw growth in the first week of March and a peak in the second week, declines began in the third week across the board. CVS and Walgreens saw minor decreases of 3.5% and 2.3% respectively, while Rite Aid saw a drop of just over 7.0%. With the high peaks in the first and second weeks indicating moves by shoppers to stock up, it is not surprising that the following week saw a decline, especially with greater movement restrictions coming into play across the country.
But, context is still critical. The first two weeks in March were so strong that even including the third week dip, there has been a massive jump in year-over-year traffic. Looking at the three week period and comparing it to the equivalent weeks in 2019, shows all three brands seeing major jumps led by Walgreens with a 12.3% increase. This is especially impressive considering wide scale closures being announced by both Walgreens and Rite Aid.
The pharmacy sector surprisingly did not see a dramatic peak in late February, but the delayed rush came in full force in March. The first two weeks saw massive traffic increases for CVS, Walgreens and Rite Aid nationwide. And, while the third week did bring decreases, the overall weight of the initial surge offset any declines when looking at the full period year-over-year.
Will a sustained social distancing period lead to an ongoing trend of traffic dips, or will the sector continue to see a positive effect on store performance?