CVS Pharmacy Closing Hundreds Of U.S. Locations

You would think in the day and age of an ongoing pandemic, and a large portion of the population that is elderly that a pharmaceutical company would have no issues staying relevant. But that is not the case for CVS. The company announced that it would be closing nearly 1 in 10 of its retail locations around the nation, according to CNN.

CNN reports that CVS points to changes in the U.S. population and shopping habits as the reasons for the store closings. In other words, pharmacies have been hurt just as much as other business models by the increasing dependence on online shopping. Plus, more big box stores are offering pharmacies too. Add in declining reimbursement rates from drug companies and you have another example of CVS profits being squeezed.

But perhaps the most surprising thing about this story is who stands to benefit the most from CVS losing all these locations. It's not Walgreens, or Rite Aid, or even Wal-Mart. It's Dollar General. Yes...Dollar General. CNN reports that the company continues to rapidly expand in the U.S. and a big part of that growth is an effort to try and "establish itself as a health destination". The company is launching what they call "health care deserts" in areas of rural America offering over-the-counter medicines and medical treatments.

Dollar General hired its first chief medical officer this past July, according to CNN. Around 65% of their stores are located in these so-called "health care deserts" where people have to drive 30 to 40 minutes just to get basic services. While you probably won't ever see a pharmacy in a Dollar General, the stores are beginning to care more about health-related products, that carry higher profit margins than what the store currently offers.