CVS announced big news, and it’s not good. Traditional pharmacies are declining, including CVS– America’s largest drug store chain– which now plans to close about one in 10 of its outdated locations.
The announcement is good news for retailer Dollar General, which has rapidly expanded in the country over the past ten years due to its ability to undercut independent and chain drug stores.
The discount giant is set to capitalize on CVS’ planned closings, CNN reported.
Dollar General will launch a health care initiative for the first time in it’s history. It will also offer customers located in rural areas a variety of health services in stores and has expanded over-the-counter products to them.
The company feels the market is a major growth area.
Thursday’s “news from CVS (CVS) has the potential to accelerate that opportunity,” Chuck Grom, a retail analyst at Gordon Haskett Research Advisors, stated on Thursday.
CVS’ planned closings are a “positive” for Dollar General, he added.
CVS cited to changes in “population, consumer buying patterns and future health needs” as its decision to close stores.
The drug store market has been strained as shoppers switch to spending online and there has been a drop in reimbursement rates for prescription drugs have also squeezed drug stores’ profits.
The National Association of Chain Drug Stores says pharmacies had dropped from 62,098 in 2015 to 56,788 in 2019.
In the meantime, Dollar General plans to increase its store selection of cough and cold, dental, nutritional, health aids and feminine hygiene products.
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