Hundreds of pharmacies in grocery stores will close across the U.S. as consumers signal that they prefer holistic healthcare solutions over fragmented ones.

WHAT HAPPENED: Regional pharmacies are too small to compete with national drugstore chains like CVS and Walgreens, which offer benefits like walk-in healthcare services and competitive reimbursement rates.

WHY IT MATTERS

  • These pharmacy closures reflect consumer preference for an all-encompassing “healthcare hub.” While the traditional pharmacy format allows customers to interact with pharmacists and ask medication-related questions, consumers now expect more. Walk-in clinics and CVS HealthHUBs allow customers to gain access to various healthcare services and get quick advice on non-threatening issues without needing an appointment. CVS announced this week it would open 600 HealthHUBS as it aims for 1,500 hubs by the end of 2021. Grocery stores don’t have the resources to enhance their pharmacies and compete with national chains or telemedicine services, giving them no choice but to exit healthcare altogether.
  • Since shoppers that rely on grocery store pharmacies are more loyal, the absence of these amenities will further hurt grocery store foot traffic. While grocery store pharmacy counters no longer attract new customers to stores, they keep old ones from shopping elsewhere. Grocery store pharmacies tend to make up less than 20% of the stores’ total business. However, Kroger says its pharmacy shoppers spend three times more than its non-pharmacy customers. Local grocery stores will need to look for new streams of revenue to make up for this decline and ensure they are still cultivating a loyal customer base.