American drugstores are currently undergoing a transformation to adapt to changing consumer trends and increased competition. The industry is facing challenges with the rise of online retailers like Amazon and other low-cost options such as Walmart and Dollar Tree. Drugstores are also struggling with theft, rising costs, and reduced prescription reimbursements.
To stay competitive, drugstores are exploring new concepts and ways to provide healthcare services beyond just dispensing medications. Walgreens and CVS are testing smaller store formats and integrating primary care clinics within their locations. These experiments aim to improve access to care and build stronger connections with customers.
Recent data shows that there are still over 30,000 drugstores across the country, but the market is considered overbuilt. The closures of underperforming stores have left gaps in some communities, particularly in urban neighborhoods where Black and Latino residents have fewer pharmacies per capita than predominantly white areas.
Walgreens is testing new store designs, including mini drugstores focused on health and wellness, featuring store-brand products. CVS Health is introducing combinations of its stores with Oak Street Health primary care clinics. These clinics offer services such as primary care, social work, and insurance assistance, focusing on patients with Medicare Advantage plans.
Independently owned drugstores are also enhancing their healthcare services by expanding immunizations and testing, and some are adding doctor’s offices or specialized care centers for conditions like diabetes. These pharmacies are adapting to meet the specific needs of their communities.
The shift towards offering more healthcare services is not entirely new for drugstores, as they began integrating small clinics over 20 years ago. However, the industry is still in the learning phase, trying to determine what services are profitable and resonate with customers amid changing market dynamics.
Drugstores are evolving from being solely convenience destinations towards becoming healthcare hubs. Analysts believe that as many as a quarter of drugstores could eventually house large health clinics, especially in densely populated areas. Despite these changes, the industry continues to evolve as it seeks to meet the evolving needs of consumers.
