CVS Health, Walgreens Boots Alliance, and Rite Aid are all down on Wednesday after reporting that Amazon is considering opening physical pharmacies. Shares of CVS were down approximately 3%, Walgreens was down almost 4%, and Rite Aid was down more than 4%. According to a report by Business Insider citing three unnamed sources familiar with the topic, Amazon is exploring expanding its prescription sales by creating standalone retail pharmacies or incorporating them into Whole Foods shops.
According to the article, conversations are still in the early stages, and if Amazon decides to pursue the idea, it might take more than a year for the business to create storefronts. The spokesperson said, “Amazon Pharmacy is focused on making at-home delivery pharmacy easier and more convenient for customers.” Over the last few years, the corporation has expressed interest in expanding into health care. In 2018, it purchased PillPack, an online pharmacy.
As a result of the disruption, drugstore chains are looking for new ways to increase foot traffic and revenue. From general care visits to sleep apnea exams, CVS is expanding its healthcare offerings. Walgreens has placed a premium on quick and handy services, such as curbside pickup and home delivery. Rite Aid has also updated its locations with new signage and a new product mix on the shelves. Separately, Amazon revealed intentions to buy MGM Studios for $8.45 billion on Wednesday to expand its Amazon Prime Video offering.