CVS Health is shifting its retail strategy by introducing smaller-format drugstores that prioritize pharmacy services over traditional retail offerings.
These compact stores, averaging under 5,000 square feet, will feature full-service pharmacies while limiting general merchandise like snacks, cosmetics, and household items.
The move comes as CVS faces growing competition from retailers like Amazon and Target, along with declining front-end sales.
Additionally, the company has struggled with increased theft and changing consumer shopping habits. By streamlining its offerings, CVS aims to enhance access to essential healthcare services, including prescription medications and immunizations, particularly in communities with limited pharmacy options.
As part of this strategic shift, CVS plans to open about a dozen of these smaller drugstores in select locations throughout 2025. However, this expansion coincides with a broader downsizing effort.
The company will close approximately 270 locations this year, continuing a trend of store closures that has resulted in around 800 locations shutting down over the past three years.
The new pharmacy-focused stores align with CVS’s long-term vision of transitioning into a healthcare-oriented company.
This move follows the company’s acquisitions of healthcare providers like Oak Street Health and Signify Health, reinforcing its commitment to expanding medical services beyond traditional drugstore operations.
With this latest initiative, CVS is adapting to a rapidly evolving retail landscape, emphasizing convenience and accessibility while scaling back its traditional retail footprint.