CVS Takes Different Path Than Walgreens
As a Retail Week article points out, CVS is on a different path to growth than its chief rival, Walgreens.
While Walgreens is reducing SKU count and remodeling stores, CVS has been hard at work integrating its Caremark pharmacy benefits manager (PRM) business into its retail pharmacy operations. So far, the CVS approach appears to be working.
“This is shaping up to be a very good year and we expect an even better 2010,” said Tom Ryan, CEO of CVS/Caremark.
CVS saw same-store sales jump over six percent in its latest quarter and the chain has managed to grow its front-end business along with pharmacy. Revenues from Caremark were up 22.1 percent for the same period.
CVS has used the PBM business to help its retail pharmacies. Consumers who are members of the Caremark PBM have the option of filling 90-day prescriptions through the mail or they can get the same prescription and price by visiting a CVS store.
Discussion Questions: Is the approach taken by CVS more effective than those taken by its drugstore competitors? Will complaints raised about anti-competitive behavior coming out of the CVS and Caremark merger come back to bite the company?