CVS is adapting to changing market conditions by opening smaller store formats that focus on pharmacy services. This move comes as the retail pharmacy industry faces intense competition and shifts in consumer preferences, pushing companies to reduce costs and optimize store operations.

Over the next year, CVS will open at least a dozen new, smaller-format pharmacies in select communities. These locations, which will be under 5,000 square feet, will provide full pharmacy services and a limited selection of over-the-counter products, tailored to meet the specific needs of each community.

“Our customized approach to expanding our pharmacy services will help us better support patients while ensuring we cover the right areas,” said CVS representatives. Despite this focus on smaller locations, CVS will also continue to open traditional stores, including those inside Target locations. Nearly 30 new CVS Pharmacy stores are planned for this year.

According to eMarketer senior analyst Rajiv Leventhal, the combined retail and pharmacy model has become increasingly difficult for companies like CVS and Walgreens to maintain, as more consumers turn to online shopping for household goods. This shift is reflected in the growing number of closures at CVS, Rite Aid, and Walgreens in recent years.

Between 2022 and 2024, CVS closed 900 stores but opened 100 new ones. The company plans to close another 270 locations in 2025. In comparison, Rite Aid filed for bankruptcy in 2023 and closed 154 stores, while Walgreens plans to shut down 1,200 locations over the next three years to cut costs. Walgreens is also in the process of being acquired by Sycamore Partners for around $10 billion, significantly less than its previous value of $100 billion.

Leventhal expects the trend of store closures to continue, with CVS and other companies focusing more on pharmacy services and less on front-of-store retail. “Consumers are more focused on price, speed, and convenience, which has made it difficult for traditional drugstores to maintain high foot traffic,” he explained.

CVS continues to rank as one of the top pharmacy chains in the U.S. based on prescription revenue. Leventhal believes CVS’ shift to smaller store formats will help the company rely less on front-of-store traffic, allowing pharmacists to take a more active role in patient care.

“Focusing on the steady business of prescriptions and over-the-counter medications is a smart strategy for CVS,” Leventhal concluded.