CVS Store Closures: Why The Drugstore Retailer Is Shuttering 900 Locations

CVS Health (CVS) is the latest in a long string of retailers to announce that it was reducing its store footprint as consumers shifted to online shopping.

The drugstore and pharmacy retailer said it was shuttering approximately 900 stores over the course of three years.

“Our retail stores are fundamental to our strategy and who we are as a company,” Karen S. Lynch, president and CEO of CVS Health, said in a statement, “We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence.”

The store closures will start in spring 2022, with about 300 locations slated to close each year. The closures represent about 9% of CVS’ total portfolio of 10,000 locations in the U.S., CNBC reported.

Since the pandemic, consumers have shifted their shopping behaviors making an accelerated move to online purchases. More customers are filling prescriptions online and using curbside pickup for personal care items, along with using telehealth for healthcare treatment, CNBC said.

CVS said that the store closures are a result of a “strategic review of its retail business” which showed “changes in population, consumer buying patterns and future health needs.”

It was unclear at the time of writing what stores were scheduled to close, but CVS spokesperson T.J. Crawford told USA Today the company would decide based on “a number of factors,” including “local market dynamics, population shifts and store density” as well as “ensuring Aetna and Caremark coverage, and the needs of underserved communities.”

CVS said it expects to take a $1 billion to $1.2 billion impairment charge in Q4 for the planned store closings.

As of Thursday at 11:42 a.m. EST, shares of CVS were trading at $94.81, up $2.08, or 2.24%.