January 15, 2020 Matthew
Rothstein, Bisnow East Coast Courtesy of CVS
CVS Health is leaning into
the latter part of its name in a major way this year.
The pharmacy giant plans
to roll out its HealthHUB wellness and healthcare centers to 600 stores by
the end of this year, CEO Larry Merlo told CNBC in a televised interview.
Merlo told CNBC he believes the company can open HealthHUBs at a pace of 12 per
week, with the goal of opening 1,500 such locations by the end of 2021.
CVS piloted HealthHUBs in
Houston at three stores starting in the end of 2018, and expanded it last year
to 50 locations across four markets, CNBC reports. The hubs take up about 20%
of the front-of-house space for an average-sized CVS, and replace some
non-health-related shelves such as greeting cards or toys.
HealthHUBs are staffed
by healthcare professionals who can offer some diagnostic capabilities,
testing and advice on managing chronic conditions. The staff is supplemented by
digital kiosks for health and insurance questions. CVS' capabilities to offer
expanded health services are bolstered by its acquisition of health insurance
giant Aetna for $70B that was finalized at the end of 2018.
Merlo claimed that the
pilot locations have experienced boosts to both foot traffic and margins, but
added the caveat that the small sample size is not necessarily predictive of
widespread success, CNBC reports. Among the first markets to be targeted in the
2020 rollout are Virginia, Maryland, Florida, North Carolina, Ohio,
Boston and Dallas-Fort Worth.
Walgreens, CVS' largest
competitor in the U.S., has been carving out similar spaces called "health
corners" to its own pharmacies since late 2018. The chain will
be closing hundreds of stores as a way to offset the costs of its
redevelopment program.
Though the two major
chains are pursuing similar strategies, their fortunes have been heading in
opposite directions, as shares of CVS increased in value by 13% last year,
while Walgreens parent company Walgreens Boots Alliance lost about 25% of
its value in the 12-month period ending in November.
https://www.bisnow.com/national/news/retail/cvs-healthhub-600-stores-overhaul-by-end-of-2020-102554
https://www.bisnow.com/national/news/retail/cvs-healthhub-600-stores-overhaul-by-end-of-2020-102554
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