Thu, 02 Dec 2021

WOONSOCKET, Rhode Island: Due to traditional pharmacies being on the decline, CVS, America's largest drug store chain, plans to close about ten percent of its stores nationwide.

However, the one company well-positioned to take advantage of the closings is Dollar General, which has rapidly expanded throughout the United States over the past decade by mainly undercutting the prices of independent and chain drug stores and winning over many of their customers.

CVS' announcement came at a timely moment for Dollar General, which is attempting to "establish itself as a health destination."

Dollar General is launching a health care program for the first time, offering health services to customers located in "health care deserts" in rural America.

Thursday's "news from CVS has the potential to accelerate that opportunity," Chuck Grom, a retail analyst at Gordon Haskett Research Advisors, said in a note to clients, adding that CVS' planned closures are a "positive" for Dollar General.

CVS blamed changes in "population, consumer buying patterns and future health needs" for its decision to close stores.

The sector has suffered from shoppers increasingly buying online or at big-box chains, warehouse clubs and dollar stores, and the number of pharmacies in the United States has dropped from 62,098 in 2015 to 56,788 in 2019, according to the National Association of Chain Drug Stores.

Further, 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 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.

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