CVS Health will acquire Schnuck Markets Inc.’s retail and specialty pharmacy businesses, which includes 110 Schnuck pharmacy stores, reports Forbes. According to a company press release, CVS Pharmacy and its subsidiaries will acquire and operate 99 of the grocer’s pharmacies and will brand them as CVS Pharmacy. Additionally, CVS Pharmacy and its subsidiaries will acquire the prescription files from 11 Schnucks pharmacies and transfer them to nearby CVS Pharmacy locations. Schnucks has more than 110 stores across Missouri, Illinois, Indiana, Wisconsin and Iowa, and the acquisition will bring a substantial presence to CVS in the Midwest, where rival Walgreens Boots Alliance has a larger market share.
Total Retail’s Take: With a majority of its locations on the East Coast, it makes sense that CVS would acquire a pharmacy chain in a less penetrated geographic market as a means to expand into new territory. By acquiring existing brick-and-mortar pharmacies, CVS avoids the cost and time required to build hundreds of new stores itself, opting rather to update and rebrand the existing stores into CVS locations. This strategy will come at much lower cost.
The acquisition of these 110 Schnuck pharmacy locations also places CVS into territory where competitor Walgreens traditionally has a larger market share. For Schnucks, this acquisition brings CVS’s leading technology and national recognition to its small-scale footprint. The acquisition is the latest move to push CVS further into the healthcare business, following other recent moves such as its HealthHUB expansion and its merger with healthcare insurance giant Aetna.