The Woes of Chain Drug Stores: It’s About (A Lot) More Than Just Shoplifting.
Shoplifting certainly does not help matters but I would largely agree that its role in the CONTRACTION OF CHAIN DRUG STORES has been vastly overstated. And while the online channel has no doubt taken a bite out of sales, particularly on the front end (e.g. over-the-counter medications, beauty products, seasonal items, etc.) where such retailers historically generated most of their profits, there was nothing stopping them from building their own robust digital infrastructures and leveraging that trend themselves. Instead, their efforts on this front have ranged from ineffectual to incompetent. Most items, for instance, did not seem to be available for delivery during the height of the pandemic. Also, before I decamped to an independent pharmacy, I was routinely barraged with text alerts about scripts that I had already picked up or had not ordered for months — none of which employees could explain. It did not inspire confidence. Nor did the consistently overwhelmed pharmacy departments — victims of the nation’s acute (and long-running) pharmacist shortage, a basic misallocation of resources and/or a complacent indifference to customer satisfaction. (And now they want to get into actual healthcare provision?). Meanwhile, there’s the competitive context to consider. The fierce battle for market share in the late 1990’s and the aughts compelled chains to take locations they knew would cannibalize existing ones in order to preempt their rivals from grabbing those spaces and sales, resulting in overexpansion that ultimately needed to be corrected. And that was before Target started rolling out smaller-format stores in urban settings and university towns (typically with pharmacies as well as similar front-end merchandise) in the last several years. Indeed, CVS is the one with the contract to operate Target’s in-store pharmacies (and even lists them on its website), which might also have played a role in its decision to close 900 locations over the next 3 years. Tales of rampant theft and urban lawlessness might make for really good clickbait or political narrative, but as always with retail, the reality is a lot more complicated.