Drug Stores

Drug Stores

Brief Excerpt from Industry Overview Chapter:

Companies in this industry sell prescription drugs, over-the-counter medications, health and beauty, and general merchandise from physical retail locations as well as online stores. Major companies include CVS Health, Rite Aid, and Walgreens (all based in the US), along with AS Watson Group (Hong Kong), Boots (UK), China Nepstar (China), Dm-Drogerie Markt and Rossmann (both based in Germany), Jean Coutu and Shoppers Drug Mart (both based in Canada), and Matsumoto Kiyoshi (Japan).

COMPETITIVE LANDSCAPE

The evolving US health care system and growing competition from online and other retail channels are rapidly transforming the retail pharmacy business. Independent pharmacies, many in rural and low-income areas, are closing. As a result, CVS and Walgreen dominate the US chain drug store industry, especially in big cities. Other major players include Walmart, which ranks among the top five US retail pharmacies by prescription revenue, and grocery-giant Kroger. In a move that further consolidated the market, Walgreen in 2018 won a hard-fought battle with federal regulators to acquire about 1,650 stores from Rite Aid, giving Walgreen about 9,300 US locations. Walgreen also operates Duane Reade drugstores. Diminished Rite Aid ranks 7th in prescription revenue, behind Walmart and Kroger.

PRODUCTS, OPERATIONS & TECHNOLOGY

Drug stores sell two main types of products: prescription drugs and "front-store" products, including over-the-counter (OTC) drugs, health and beauty aids, greeting cards, photo-finishing services, and general merchandise. Prescription drugs draw customers to the store, and stores focus their efforts on the...