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The Merchant Life Newsletter

The Dull Drugstore

By June 12, 2024No Comments

One thing stood out for me when living in NYC last year: many of the pharmacies were dull and uninspiring.

CVS? Bland.

Walgreens? Blah.

Rite-Aid? Booooring.

If I needed to visit a pharmacy, locations were abundant in the Upper East Side. Although, that appears to be changing.

The Wall Street Journal reports that the real estate footprint for pharmacies is starting to shrink as locations begin to close their doors. Reasons for closures? Pressure from ecommerce. Competition from retailers like Walmart and Costco who have their own pharmacy departments. Meanwhile, discount retailers can lure away shoppers who need more basic items.

Now, it’s not like Walgreens and CVS has not tried to broaden their appeal. Could I possibly interest you in sushi from a pharmacy? Likely not. New Yorkers wouldn’t want to buy their maki roll from a Duane Reade.

But let’s get real, it seems to be easier for Wal-Mart to enter the pharmacy game versus CVS trying to enter the grocery game.

Many years ago, Shoppers Drug Mart locations here in Canada were equally as dull and lifeless. The only time you went to Shoppers is when you were ill. But, that is now a distant memory. Today, Shoppers locations are bright and well-laid out. You can get some grocery items, mail a package with Canada Post and get beauty items while you fill a prescription.

It also helps that the PC/Shoppers Optimum program is one loyalty program that consumers go nuts over. Mind you, Shoppers did much of their revamping well before they were acquired by the grocery giant, Loblaw.

But, what is worth mentioning is that Shoppers Drug Mart is a driver of Loblaw’s profitability. Taking a peek at 2023 financial results shows that Shoppers same-store sales increased by 5.4%. Also, the annual revenue is increasing. In 2013, Shoppers pulled in $10.78 billion. In 2022, it pulled in $16.09 billion. Moreover, Loblaw plans on building another 25 SDM locations.

So, for the likes of Walgreens, CVS and such, where does improvement begin? Well, we harp on this point frequently: how often do the executives go visit their stores? Do they go and shop their business? Do they eat the maki roll?

I doubt it.

If they did, maybe they would understand why one commenter over at the WSJ said the following:

“Being sick feels better than going to Walgreens.”

That’s where improvement begins.