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It's no longer just about drugs: CVS Pharmacies promote a healthier lifestyle

CVS Pharmacy is redesigning its stores to promote a more holistic approach to health. Company sales are up but the stock is down. Is it a buying opportunity?

The redesign of CVS stores in the Philly area - such as this one in Center City - with the expanded health aisles could start as early as 2018.
The redesign of CVS stores in the Philly area - such as this one in Center City - with the expanded health aisles could start as early as 2018.Read moreSuzette Parmley / Staff

CVS Pharmacy is wagering big that a healthy lifestyle extends beyond mini-gyms, organic supermarkets and vegan restaurants that are popping up all over.

The retail division of CVS Health is redesigning its stores to reflect this consumer trend of self-pampering with expanded services and products, including organic foods and even new standards for vitamins and supplements.

"Pharmacy is the heart of our business and our focus on providing care to patients and customers defines everything we do in our stores," said Helena Foulkes, president of CVS Pharmacy and executive vice president, CVS Health, last month during the company's "retail innovation" event in New York  to launch the redesign.

Foulkes said that, whereas in the past, people used a "drugstore" or retail pharmacy to buy products when they were sick, nowadays people are moving beyond sick-care to "self-care,"  and taking a more holistic approach to health.

CVS has been moving in this direction for a while. It has more than 50 stores in the Philadelphia region.

2014 was a pivotal year, when the chain decided to remove all tobacco products from its stores.

Earlier this year the company took out all sun care products with an SPF lower than 15 while expanding products with SPF 30/broad spectrum, natural beauty brands, and other skin health products.

It recently became the first national pharmacy chain to announce the removal of artificial trans fats from exclusive store brand food products.

By the end of 2019, CVS wants to remove all parabens, phthalates and formaldehyde donors  found in some makeup and certain cold and flu medications.

"For several years now, CVS has been a leader in moving toward being a provider of health and wellness solutions — and moving beyond being just another drug store retailer," said Frank Badillo, director of research at, which tracks economic trends. "The new store design represents another iteration in carrying out a strategy it embarked on some years ago."

Said Moody's senior vice president Maggie Taylor: "The new [store] format fits well with its sales concentration in prescription drugs and its already existing Minute Clinic offering. CVS' wellness format is not a new concept in the drugstore industry."

She said Rite Aid launched a wellness format a few years ago and has had a GNC store within its stores for several years, as well."

The new CVS store formats were first introduced in 2015, with a focus on expanded health, healthier food and beauty assortments near the front of the stores.

More than 800 CVS Pharmacy locations nationwide have this elevated design and assortment, including several in the Philadelphia region, and more than 3,400 stores have expanded food and beauty offerings.

The next phase started earlier this year after extensive research found that people were taking a more proactive approach to their health, said Judy Sansone, senior vice president, front store business and chief merchant at CVS.

"With that in mind, we crafted a new shopping journey, all in the name of better health," she said.

CVS Pharmacy rolled out major changes to as many as 70 new and existing stores this year - including  a pair in Philadelphia. The CVS store at 55 Park Avenue in Collegeville and at 3401 Walnut Street in West Philly have been updated.

There are plans to upgrade as many as five more in the Philly/South Jersey market. The locations have yet to be announced.

Some key elements include:

  1. 100 feet of new merchandise in health, beauty and healthier food categories near the front and a streamlined layout to make it easier to find items;

  1. So-called discovery zones in key health categories  — such as sleep/mood and immunity — with large-lettered signage;

  1. A broader selection of vitamins and supplements;

  1. New, "on-trend" beauty brands such as Wunder2 and Tigi Cosmetics, with greater skin health benefits and more natural ingredients. A "trend wall" with new products along this line has been added at 2,000 stores.

  1. A bigger selection of "better-for-you" food options, including 27 new items under the exclusive Gold Emblem Abound product line. They include dietary preferences, such as gluten free, sugar free, or organic.

  2. The company is developing third party testing to enforce stricter quality standards for all vitamins and supplements.

CVS expects to expand this format on a larger scale in 2018.

"They are trying to differentiate themselves and better compete with online," said Ira Kalb, an assistant professor of clinical marketing at the USC Marshall School of Business. "To compete, they have to add value and give buyers services they cannot get online."

Fourth-quarter 2016 net revenues for CVS rose 11.7 percent to $46 billion. Net revenues year-over-year rose 15.8 percent to $177.5 billion last year.

Still, recently the stock was down more than 20 percent from a year ago. CVS faces lots of competition from the likes of Walgreens and other pharmacy chains. CVS said it doesn't comment on sales or stock figures.

Garrick Brown, vice president, retail research of the Americas at Cushman and Wakefield, said the trend of the local pharmacy as health-care provider wasn't going away anytime soon.

"With Obamacare on the verge of being gutted or overhauled" under President Trump,  Brown said, millions of people could lose their health insurance.

"Whether that's five million, 10 million, or 20-plus million people remains to be seen," he said. "The kinds of relatively inexpensive, low-level medical care that these in-store clinics provide could fill a major need with a lot of consumers."