CVS Health, the giant pharmacy chain, said Thursday it will close nearly 900 stores next year, ending a 45-year run at the top of the retail drug market by pivoting into retail health care services and processing drug claims.
The shift toward retail health care will likely wipe out many of the more than 7,700 CVS store employees who work on the front of stores, which sell drugs, health-related services and food. CVS has about 130,000 full-time employees in all.
“Store closings are part of an ongoing effort to streamline the operations of the company and align the store network with today’s pharmacy needs,” CVS said in a statement.
The announcement was unexpected, coming less than three months after CVS closed the merger with insurer Aetna. Since then, CVS has pivoted toward participating more fully in the delivery of health care services, including MinuteClinics, the company’s primary preventive care service, which focuses on non-emergency health care and illness.
The moves to cut more physical locations and close more clinics will mean that CVS’s marketplace will increasingly be dominated by a single brick-and-mortar competitor, Walmart, which recently begun offering a home delivery service. CVS’s a primary rival to Walmart, operating store locations that compete more directly in price than with the discounter, which is known for offering lower prices and broad selection of items.