After over 100 years, the company is going private, from DOW to out of the public market, very quickly.
I had couple of calls, in which I lost money. Which is a rounding error.
Long-term drug stores are no longer a viable business. I still have some $CVS, and recently it staged a comeback after the clarity, visibility on their medicare business. I have covered call and will let them go.
There are better businesses.
That may certainly be true, but the pharmacy business has a ton of running room. Baby boomers are still moving into the 60+ age group, where drugs for every ache and pain are available and widely prescribed.
I’ve been going to the same Kroger’s for almost 30 years and I’ve watched their pharmacy go from 3 employees to 10, add a drive-up, and continue to grow busier with every passing year. Kroger recently sold their pharmacy business to Elevance Health, (formerly Anthem,) and while the last 6 months have been rough (don’t know why) over the past several years it’s been quite a winner.
Based on the local CVS where Mrs. Goofy does business, the pharmacy end is holding up. It’s the front end that’s down. Less traffic, fewer employees, stuff under lock & key. I’d guess that’s the end of “drug stores” that’s falling down.
The drug stores have 3 challenges, on one hand, you have costco’s, walmart, safeway, kroger all entered the pharmacy business. Secondly, the online threat of Amazon, traditional express scripts, etc. Lastly, Amazon’s of the world are also hurting them on the retail side.
A typical CVS is as big as safeway. But they are not bringing in as many customers as Safeway or Kroger. CVS tried to pivot with Aetna purchase, but the old drug store concept is dead. RiteAid is dead, Walgreens will become k-mart at private equity hands.
How long CVS will last?
Health insurance companies often have their own mail order pharmacies. That reduces trips to the pharmacy. Walmart has low margin businesses like groceries and pharmacy because it brings people into their stores where they may buy more profitable items.
There is also a shortage of pharmacists and declining population in rural areas making keeping those stores more difficult.
Decline in retail due to internet traffic hits pharmacies too.
Creepy when this happens…
CVS’s New Mini Stores Go All In on Medicine and Skip Everything ElseThe 12 new stores are expected to open throughout the U.S.
[CVS Health] is preparing to open a dozen stores offering full-service pharmacies but very limited retail, the latest example of a national drugstore chain responding to a long stretch of declining retail sales.
The new stores will be on average less than 5,000 square feet, or not even half the size of a typical CVS location, the company said. The 12 new stores are expected to open over the next year in cities and towns throughout the U.S.
These shrunken CVS stores will still stock health-related products such as over-the-counter cough and pain medications or first-aid care, a CVS spokeswoman said.
But missing from their aisles will be the vast array of consumer items, such as greeting cards, groceries and nail polish, that for decades have been staples at CVS and other national drugstore chains
https://www.wsj.com/business/retail/cvs-small-store-openings-b0e196a2#