Retail

CVS Plans To Shutter 22 ‘Underperforming’ Stores

CVS Plans To Shutter 22 'Underperforming' Stores

In a regulatory filing, CVS Health said it will shutter 22 “underperforming” drugstores early in 2020, beyond the 46 stores it shuttered earlier this year. More information on the store locations was not immediately made known, CNBC reported.

CVS Chief Financial Officer Eva Boratto told analysts, “We believe these decisions will generate enhanced longer-term performance. Our real estate footprint remained very productive, and we will look for opportunities to further improve the performance in our portfolio.”

The firm made a $96 million impairment charge on its Q3 earnings in relation to the 22 stores. It also recorded a $135 million charge in Q1 in relation to the 46 stores that were closed during Q2.

Drugstores are under threat as consumers purchase more pharmacy products online and new rivals sell prescription drugs via eCommerce. Walgreens said earlier in the year that it would shutter 200 stores, and CVS executives have said they do not expect “meaningful” store closures, per CNBC. 

In separate news, UPS said on Tuesday (Nov. 5) that its UPS Flight Forward (UPSFF) drone delivery subsidiary has completed the first residential drone deliveries of CVS prescription medications. The deliveries were made on Friday (Nov. 1) to the home of a CVS customer and a different customer in a nearby retirement community.

Both flights launched from a CVS store in North Carolina using the M2 drone system by Matternet. The self-flying drones were supervised by a remote pilot with the ability to intervene if necessary. The drone hovered about 20 feet above the properties and then gradually grounded the packages using a cable to make the deliveries.

Kevin Hourican, president of CVS Pharmacy, said the successful drone delivery “demonstrates what’s possible for our customers who can’t easily make it into our stores,” and noted that CVS is looking into a variety of delivery options for urban, suburban and rural markets.

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