CVS Health will slow the pace of its annual store expansion by opening about one-third of locations it usually does and even fewer next year, the company’s head of retail said Wednesday.
The drugstore chain normally opens about 300 stores every year, CVS Pharmacy President Kevin Hourican said on a call with analysts Wednesday discussing CVS’ second-quarter earnings results. This year, CVS will open about 100 stores and next year will open about 50. Hourican told CNBC that the real estate growth reduction is “a natural change” given the number of stores CVS has and the growth in areas like delivery.
Rival drugstore chain Walgreens on Tuesday announced it would close 200 stores. Hourican said CVS reviews the 500 leases that come up for renewal every year.
“We will continue to aggressively evaluate our store portfolio to ensure we’re delivering the highest level of financial returns,” Hourican said.
CVS will focus its efforts on remodeling stores into “HealthHUBs.” These stores include more health services like blood testing and sell more health products like sleep apnea masks. CVS introduced the first three stores with HealthHUBs in Houston in February.
The company said earlier this summer it would open 1,500 HealthHUBs by the end of 2021.