American drugstores are disappearing from street corners, with big chains Walgreens and CVS closing hundreds of locations and independent pharmacies struggling to survive. The reshaping of a ubiquitous part of the retail landscape reflects gathering pressures inside stores. At the rear of the store, business at pharmacy counters is being squeezed by stingier drug reimbursement rates and pharmacist wages.
In the aisles, sales of everything from greeting cards to cosmetics are feeling the effects of cut-price competition. CVS, the largest pharmacy chain by store count, has shut 900 stores in the past three years and intends to close another 270 in 2025. Walgreens has shrunk its US footprint by 1,000 stores in the past six years and plans to pull the plug on as many as 1,300 more in the next three years. Smaller rival Rite Aid exited bankruptcy proceedings in September offering dozens of surplus properties for lease. Wall Street has taken a dim view of pharmacy operators’ prospects, with shares of parent companies CVS Health down more than 40 per cent and Walgreens Boots Alliance off more than 60 per cent in 2024. “The whole drugstore four-wall economic model is collapsing on itself, in my opinion,” said Josh Cummings, a portfolio manager at Janus Henderson Investors. Retrenchment among US drugstores has also sent ripples through commercial property markets and caused public health officials to worry about the spread of “pharmacy deserts” — areas without convenient access to medicines — often in poor urban and rural areas. Drugstores received a boost as testing and vaccination hubs during the Covid-19 pandemic. But as the disease’s virulence fades, structural problems have re-emerged for the nation’s pharmacies. Dispensing prescription drugs is a $621bn business, according to the Drug Channels Institute, and it drives about three-quarters of US pharmacy sale