COVID-19 vaccines and testing provided retail pharmacies with a big boost in foot traffic in 2021. However, the decrease in COVID-19 cases is expected to impact the demand for vaccines and testing from the general public. Many big brands like CVS are anticipating this decline in demand.
How did retail pharmacies perform in 2021? What can they expect this year based on January 2022 foot traffic? We analyzed foot traffic to CVS, Rite Aid, Walgreens, and non-chain pharmacies to determine how they performed in 2021 and what they can expect going into 2022.
Independent Pharmacies vs. Retail Pharmacy Chains
Independent pharmacies outperformed chain pharmacies in 2021. In January 2022, foot traffic to independent pharmacies was 10% higher than in January 2021. Rite Aid’s and Walgreens’ foot traffic patterns were similar at the beginning of 2021. This started to change in May 2021 when Rite Aid’s foot traffic growth jumped ahead of Walgreens. By the start of Q4 2021, Walgreens’ foot traffic growth had surpassed Rite Aid’s, but failed to catch up with independent pharmacies; the Illinois-based company’s foot traffic was 3% lower in January 2022 than in January 2021.
Among the pharmacy chains that we analyzed, CVS couldn’t keep up with its competitors in terms of foot traffic growth. Foot traffic to CVS peaked in March and December 2021; December foot traffic was only 5% higher compared to January 2021. This might have been due to consumers looking for last-minute holiday gifts in combination with the rise in COVID testing. As of January 2022, foot traffic to CVS stores was 16% lower than in January 2021, despite its successful Q4 2021 earnings. The post-holiday decline in coronavirus testing and increased reliance on drive-thru services may have contributed to lower in-store foot traffic.
One reason that retail pharmacy chains are underperforming compared to independent pharmacies may be store closures. Walgreens, CVS, and Rite Aid permanently closed some stores in 2021. Walgreens and CVS also recently announced that they are temporarily closing a few stores on the weekends because of staff shortages. With big pharmacy retailers shuttering or temporarily closing stores, consumers might have turned to local pharmacies to fulfill their needs.
The State of Retail Pharmacies in 2022
Retail pharmacies now play a different role in consumer health. Most big pharmacy chains are switching their focus to health-related services, which is far from the typical convenience store approach that has long dominated the retail drug store industry.
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