story by Kim Souza
ksouza@thecitywire.com
CVS Health will open the first two of four planned western Arkansas pharmacies on Sept. 21 in Van Buren and Oct. 12 in Bella Vista, according to Michael DeAngelis, spokesman for the Rhode Island-based retailer.
He said the stores under construction in Fayetteville and Springdale are slated for completion in mid-November and mid-2015, respectively.
“Our stores employ approximately 20 people each. These stores will not have walk-in clinics,” DeAngelis said.
He said the chain typically works with local non-profits throughout the year to help fund certain projects. DeAnglelis had no details of any charitable donations being made locally at this time.
The local store sites were chosen by CVS to be on major traffic thoroughfares, often only a short distance from their largest competitor, Walgreens. City permits show the local CVS stores to average 13,225 square feet at a cost of roughly $2 million per location, excluding land costs. In each of the locations property was purchased and structures torn down before the new store construction could begin.
SHOPPER OPINIONS
Kathleen Campanirio, a loyal CVS shopper in Massachusetts and Florida, told The City Wire that she’s a fan and has used virtually all of their services at one time or another.
“I am a big shopper of CVS using rewards and saving loads of money. I also buy their vitamins and other products and use the MinuteClinic for flu shots,” said Campanirio, a retired nurse.
David Reese, a retired real estate executive in East Texas, said CVS is a lot like Walgreens and in the Dallas Metroplex the two chains are most often side-by-side. Karen Hart, a banking professional in the Dallas area, said the CVS store is the same as Walgreens but she has not had good luck with the pharmacy, ranking it among the worst she has used.
None of those interviewed by The City Wire were concerned about CVS no longer selling tobacco.
TOBACCO FREE
Over the last five years, CVS claims to have gained significant share over its competitors in the overall retail market. It accounts for more than one in every five prescriptions filled in the U.S., according to company reports.
Analysts said CVS has been able to retain a high percentage of Walgreen customers it captured during the Walgreen-Express Scripts dispute in 2012. Wall Street analysts praised the chain’s MinuteClinic expansion earlier this year.
CVS, the second largest pharmacy chain behind Walgreens, recently made headlines when it announced it would no longer sell tobacco products because such sales sent a conflicting message to consumers given the retailer’s mission to promote health. As of Sept. 3 the chain has been tobacco free, clearing all of its shelves and no longer selling tobacco products.
“When we first shared our decision to remove cigarettes and tobacco from the shelves of our 7,700 CVS/pharmacy locations, some called it a bold decision. We called it the right decision then and we call it the right decision now,” CVS CEO Larry Merlo said in a Sept. 3 announcement.
The company forecast the loss in tobacco-related revenue at $2 billion for the year, but it did not reduce its earnings forecast.
FINANCIAL PERFORMANCE
CVS has posted strong sales growth through the first half of this year. The retailer reported second quarter sales ending June 30 of $34.6 billion, up 10.7% from the year-ago period. For the first half of this year CVS sales revenue was $67.29 billion, up 11.7% from the same period in 2013.
In the retail front-of-the-store, the comp sales decreased by 0.4% and 2.1% for the three and six months ended June 30, 2014, respectively, compared to the prior year. Like most other retailers CVS blamed the decrease in store traffic to inclement weather throughout the long winter.
The company said back-of-the-store pharmacy sales for the six months ended June 30 were negatively impacted by a lower incidence of flu compared to last year's strong flu season and extreme weather conditions across much of the United States in the first quarter, which led to fewer physician visits and prescriptions written.
As of June 30 CVS operated 7,705 retail drugstores. Store counts rose by 2% or 152 stores year-over-year.