CVS Pharmacy is addressing the evolving landscape of retail by emphasizing the establishment of smaller stores primarily devoted to pharmacy services. This initiative comes amid fierce competitive pressures and changing consumer habits.

Expansion of Smaller Format Locations

In a strategic move, CVS plans to launch approximately a dozen small-format pharmacies across various U.S. communities over the next year. These new outlets will average under 5,000 square feet, featuring a fully operational pharmacy along with a limited selection of over-the-counter products tailored to local demands.

Strategic Realignment of Services

A spokesperson for CVS stated, “By taking a customized approach to our footprint that is focused on the specific needs of the communities we serve, we’re continuing to strategically realign our pharmacy footprint to better support patients and ensure the right geographic coverage.”

While CVS is moving forward with small-format pharmacies, it continues to establish traditional stores with full retail offerings. This year, CVS is set to open nearly 30 traditional pharmacy locations, including some within Target stores.

Industry Challenges and Responses

According to retail analyst Rajiv Leventhal, companies like CVS and Walgreens are finding it increasingly challenging to sustain a dual retail and pharmacy business model as more consumers opt for online shopping for non-pharmaceutical needs. Recent patterns indicate a significant wave of store closures across the sector, with CVS recently shutting down hundreds of locations while only opening a fraction in response to shifting customer preferences.

CVS has closed around 900 stores from 2022 to 2024 and plans to close an additional 270 locations in 2025.

Market Dynamics and Future Predictions

The pharmacy sector is undergoing substantial changes, as demonstrated by Rite Aid’s bankruptcy filing and Walgreens’ announcement to close at least 1,200 stores within the next three years. Analysts highlight that the ongoing closures reflect a necessary recalibration within the industry following rapid expansions.

Leventhal suggests that as consumers emphasize affordability and convenience, traditional drugstores may struggle: “Consumers are prioritizing price, speed, and convenience above all.” He believes the focus on pharmacy services within smaller stores could enable CVS and its competitors to become less reliant on foot traffic and rather empower pharmacists in patient care.