BETHLEHEM, Pa. - Big drug store chains like CVS and Rite Aid have announced they will shut down dozens of brick-and-mortar locations across the country this year despite the fact that these chains played a crucial role during the pandemic by offering both COVID-19 testing and vaccinations.
For some Lehigh Valley neighborhoods, these stores are the only pharmacy option.
So, what’s driving the trend?
Walter Schubert, a professor of finance at La Salle University, said some consumers don’t need physical locations because they’re ordering prescription drugs on the web.
“People are finding cheaper ways to get their drugs online. Governments negotiate the price of the drugs in other countries, we do not. So our prices are much higher,” said Schubert.
Schubert said Amazon and Walmart are also making plays into the online pharmacy market.
But not everyone will feel comfortable buying online, which he said could lead to a comeback for mom-and-pop drug stores.
“If there becomes an obvious market for local people who don’t feel comfortable buying online, who worry about the mail, then we may have enough business there for a small pharmacy to come back,” said Shubert.
Meanwhile, CVS said its remaining stores will focus on its “Health Hubs,” which offer diagnostic tests and vaccinations.
“CVS and the like are finding it profitable to offer vaccines and these different diagnostic tests, but finding that their prescription business is being eroded by online competition,” Shubert said.
This year Rite Aid said it plans to close 63 stores nationwide, while CVS said it plans to close 900 stores across the country over the next three years. The rival companies have not yet revealed which locations will close, although announcements are anticipated this spring.
