CVS is planning to close 900 stores amid a shift toward health services.
The firm will create primary-care services at some sites, while converting others into health hubs that provide mental health services, hearing exams, and other screenings.
“The company has been evaluating changes in population, consumer buying patterns and future health needs to ensure it has the right kinds of stores in the right locations for consumers and for the business,” CVS announced in a statement.
CNBC explains:
Store closures will begin in spring 2022. The company said it plans to close about 300 per year. In total, the closures will add up to roughly 9% of CVS’ nearly 10,000 U.S. stores. The company declined to share the specific locations of stores that will shutter.
CVS did not say how many employees will lose their jobs because of the closures, but said it will help those who are impacted find a different opportunity or role at another location.
CVS is shaking up its business as the Covid pandemic accelerates changes in consumer behavior. More people are getting prescriptions filled online, retrieving personal care items through curbside pickup and visiting with doctors through telehealth. The drugstore chain and health insurer said it is closing the stores based on changes to the population, customer habits and health needs.
Since COVID-19 and the lockdown-induced recession, firms like CVS have endured nationwide labor shortages.
Because the United States economy presently has 2.8 million more available jobs than workers willing to take them, more workers can afford to be choosy with the positions that they accept. As a result, companies such as McDonald’s, Chipotle Mexican Grill, Starbucks, Domino’s Pizza, and Popeyes are hiking their wages or introducing new benefits.
Many partially attribute the labor shortages to Congress funding enhanced federal unemployment benefits, through which millions of Americans received a weekly $300 check on top of state unemployment handouts. Although the payments ended on Labor Day, Rep. Alexandria Ocasio-Cortez (D-NY) proposed a bill that would lengthen unemployed Americans’ ability to reap the aid through February 1, 2022 — and retroactively send payouts for the weeks since September 6.
“I’ve been very disappointed on both sides of the aisle that we’ve just simply allowed pandemic unemployment assistance to completely lapse when we are clearly not fully recovered from the cost effects of the pandemic,” Ocasio-Cortez explained. “I simply could not allow this to happen without at least trying.”
In an interview earlier this year, Rep. Kevin Brady (R-TX) told The Daily Wire that the $300 checks were “crushing Main Street businesses” seeking to hire workers. He added that child tax credits ensure that the labor market distortions will linger.
“For the first time, it is divorced from work. That’s not a requirement for getting it, and so you’re seeing this barrier begin to impact businesses starting last week,” Brady said. “I think the point here is that the federal government is sending a seemingly never-ending supply of checks, regardless of whether you work or not. You’re going to have economic problems, and that’s what we’re seeing.”
Roughly one-fifth of economists surveyed by The Wall Street Journal identified labor shortages as the primary threat to American economic growth.