**How CVS and Walgreens are Adapting to Competition in the Retail Pharmacy Sector**
Much of the recent conversation surrounding major national drugstore chains like Walgreens and CVS has focused on store closures and Walgreens’ planned privatization following its acquisition by Sycamore Partners. However, despite these high-profile headlines, industry experts say the outlook for these retail pharmacies isn’t as bleak as it seems.
According to a recent white paper from Placer.ai, both CVS and Walgreens are showing signs of stability—and even growth—in certain metrics. In the fourth quarter of 2024, CVS saw an overall visit increase of 0.6%, with average visits per location rising by 2.9%. Walgreens, while seeing overall foot traffic decline, reported an increase in average visits per store across 2024. These trends have carried into 2025, suggesting that the sector could be adapting to the evolving retail landscape.
“National drugstore chains continue to offer consumers a valuable combination of convenience and specialization,” said R.J. Hottovy, Head of Analytical Research at Placer.ai. “Many of the specialized products and healthcare services they provide are difficult for grocers to replicate and challenging for independent retailers to scale.”
One key strategic move by CVS is a renewed focus on health, wellness, and beauty products—stepping away from traditional front-of-store items like greeting cards and grocery staples. According to Hottovy, this shift is helping CVS enhance the customer experience and improve foot traffic, a model that Walgreens may soon follow.
Despite downsizing store networks, CVS and Walgreens still dominate the in-person pharmacy market, holding the majority share of offline pharmacy visits. That said, competition remains fierce. Grocery chains, superstores, club retailers, and online platforms have ramped up their pharmacy operations, putting pressure on traditional drugstores. Aggressive pricing strategies and promotional campaigns from these competitors are also challenging the traditional players.
Whether the ongoing store closures and brand repositioning efforts will yield long-term success remains to be seen. Still, Hottovy believes strategies like footprint optimization and an emphasis on wellness categories stand to strengthen CVS and Walgreens’ competitive edge in a rapidly shifting retail pharmacy environment.
