While it will be closing stores, CVS Health will also develop new store formats to drive higher engagement with consumers.
CVS Health said it will close approximately 900 retail stores to align to evolving consumer needs.
The drugstore retailer plans to shutter around 300 stores a year for the next three years, beginning in the spring of 2022. CVS has around 9,900 locations currently.
The move comes from the retailer evaluating changes in “population, consumer buying patterns and future health needs," it said in a press release. It also noted it's committed to offering impacted colleagues roles in other locations or opportunities, and that the store closures will cost the company between $1-$1.2 billion in the fourth quarter of 2021.
"Our retail stores are fundamental to our strategy and who we are as a company," said Karen S. Lynch, president and CEO of CVS Health. "We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence."
While it will be closing stores, CVS Health will also develop new store formats to drive higher engagement with consumers, it said, as part of the company's strategic review of its retail business.
Three distinct models will serve as community health destinations:
Sites dedicated to offering primary care services.
An enhanced version of its HealthHUB locations with products and services designed for everyday health and wellness needs.
Traditional CVS Pharmacy stores that provide prescription services and health, wellness, personal care and other retail offerings.
In connection with the changes announced, Neela Montgomery, currently EVP and president, CVS Retail/Pharmacy, has decided to leave the company. Montgomery will remain in her role until the end of 2021, ensuring a smooth transition of responsibilities.
Prem Shah has been named to the newly created role of chief pharmacy officer and will oversee the omnichannel pharmacy strategy, effective immediately. On January 1, 2022, Shah and Michelle Peluso will become co-presidents of CVS Health's retail business, with Peluso overseeing front-store strategy and operations.
Shah joined CVS Health in 2013 and is currently EVP, specialty pharmacy and product Innovation. Peluso joined CVS Health in 2021 as EVP and chief customer officer. Shah will report directly to Lynch in his new role, and Peluso will continue to report directly to Lynch.
"Prem and Michelle are ideally suited for their new roles and will be instrumental to CVS Health as we continue to execute against our strategy of delivering an integrated health care experience centered around the consumer," said Lynch, president and CEO of CVS Health.