WOONSOCKET, Rhode Island : CVS, America's largest drug store chain, plans to close about ten percent of its stores nationwide because of the decline of traditional pharmacies.
One company that is well-positioned to take advantage of the closings is Dollar General, which has been expanding rapidly over the past decade, by undercutting the prices of independent and chain drug stores and winning over many of their customers.
CVS announced at a timely moment for Dollar General, which is trying to establish itself as a health destination. The health care program of Dollar General is launching for the first time, offering health services to customers located in rural America, in health care deserts.
Chuck Grom, a retail analyst at Gordon Haskett Research Advisors, said that CVS' planned closures are positive for Dollar General, because of Thursday's news from CVS.
CVS closed stores because of changes in population, consumer buying patterns and future health needs.
The number of pharmacies in the United States has dropped from 62,098 in 2015 to 56,788 in 2019 due to shoppers increasingly buying online or at big-box chains, warehouse clubs and dollar stores.
The drug stores have been bleeding market share to Dollar General, whose prices are some 40 percent lower than pharmacies.
Dollar General has faced opposition from local leaders in many areas of the country, who argue that the company is driving out independent grocery stores and pharmacies and does not sell fresh food at stores.
In response, the company recently began to sell produce and fresh fruit at stores.