Shares of pharmacy giants CVS Health, Walgreens and Rite Aide are tumbling after reports surfaced Wednesday, indicating Amazon’s interest in opening brick-and-mortar pharmacies.
According to people familiar with the matter, the eCommerce giant is contemplating whether it should open standalone pharmacy stores or add pharmacies to its existing network of Whole Foods stores. The news was first reported by Business Insider.
If Amazon decides to proceed with its exploratory plan, it would likely take a year or longer for the company to start opening new stores
“Amazon Pharmacy is focused on making at-home delivery pharmacy easier and more convenient for customers,” an Amazon spokesperson said in a statement, declining to comment on the company’s plan to open physical pharmacy stores.
Amazon’s foray into the brick-and-mortar pharmacy business would be yet another effort to cut itself a larger share of the $370 billion pharmacy business. The company has made several moves over the course of the last few years to advance its ambitions. Last year, the company announced the launch of Amazon Pharmacy, an online prescription delivery service that enables consumers to get prescriptions covered by several insurers. The launch of the service came after the company’s acquisition of PillPack in 2018.
These moves have put the pressure on drugstore chains to rethink their business and find ways to boost sales, especially since fewer consumers are shopping at their stores for items such as skin and hair care products and other household items such as detergent and toilet paper. Rite Aid, for example, is revamping its physical stores by sprucing up its stores and offering holistic health merchandise. Meanwhile, Walgreens has improved on its omnichannel services by offering curbside pickup, faster delivery through Instacart and revamping its loyalty program.