Retailers must evolve to meet changing consumers demands. They also have to continually evaluate their brick-and-mortar footprint to account for changing populations and demographics.
Some restaurants, coffee shops, and convenience stores, for example, were built because they were near offices. That allowed office workers to conveniently grab coffee, lunch, and items they might need for home.
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If some of those offices close or move to hybrid work models, nearby businesses become less neccessary. Fewer people means fewer cups of coffee, sandwiches, and other things sold.
That has led thousands of restaurants, coffee shops, pharmacies, and convenience stores to close. The closures said nothing about the overall health of those companies. They happened because the people who supported those locations simply no longer walk by those stores as often, or maybe even at all.
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Starbucks, for example, closes hundreds of stores every few years. Sometimes that’s because a lease ends and a better location has opened up. In other cases, it’s because the population has shifted.
Now one popular retailer that had been closing hundreds of stores, mostly due to the factors listed above, faces closing dozens more for a reason that has nothing to do with the success of those locations.
CVS has closed nearly 1,000 locations.
Image source: Shutterstock
CVS has been shrinking, closing stores
CVS Health (CVS) has been working to right-size its store fleet. That has involved significant cuts, albeit in a planned, surgical manner.
The company’s Executive Vice President David Joyner talked about those closures during CVS’s third-quarter earnings call.
“By the end of November, we will have completed our previously announced three-year store optimization initiative targeting 900 stores and expect to close approximately 270 stores in 2025,” he said.
Joyner made it clear that the company takes these decisions very seriously.
“We recognize the importance of retail pharmacy in the communities we serve and will continue to be thoughtful and deliberate as we execute on our footprint optimization efforts,” he added.
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Joyner also noted that the chain is doing more than just closing stores.
“We have also been deliberate in enhancing the durability and strength of our store operations to ensure we consistently serve our role as a community health destination. This was clear in the aftermath of the recent hurricanes. Our colleagues were instrumental in ensuring our operations were back online quickly, with most stores open with 48 hours,” he added.
Now, CVS may be forced to close a number of stores it had intended to keep open.
New law may force CVS to close stores
Arkansas has a new state law, HB1150, that prohibits state permits to pharmacies owned by pharmacy benefit managers effective Jan. 1, 2026.
“Pharmacy benefit managers, or PBMs, are companies that work with health insurers, large employers, and other payers to manage their prescription drug benefits,” according to CommonWealthFund.com.
CVS serves as PBM, and that could force it to close 23 stores in the state.
The pharmacy chain shared a statement on the issue.
“CVS Health welcomes a good-faith discussion with policymakers in Arkansas and across the country on ways to make medicine more affordable and accessible. Unfortunately, HB1150 is bad policy that accomplishes just the opposite: it will take away access to pharmacy care in local communities, hike prescription drug spending across the state by millions of dollars each year, and cost hundreds of Arkansans their jobs,” Drugstore News reported.
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Closing these locations would cause 500 people to lose their jobs, according to CVS.
This issue could grow beyond Arkansas for CVS.
“Since the introduction of HB 1150, similar ownership provisions were introduced or amended into bills in Indiana, New York, Texas and Vermont. Additionally, on April 14, a bipartisan coalition of 39 state and territory attorneys general sent a letter to congressional leaders urging them to pass legislation prohibiting PBMs from owning or operating pharmacies,” according to the website.
