CVS Comes To St. Louis

St. Louis is pretty well dominated in the chain pharmacy space by Walgreens. After that, I would bet market share is pretty well divided across independents and the primary grocery stores of Schnucks and Dierbergs. I remember years ago when we looked at narrowing retail networks at Express Scripts we looked at a lot of markets and different chains. I think for our members over 50% of the pharmacy claims in St. Louis were filled at Walgreen’s stores. Eliminating them from the network would be a major disruption and a competitive disadvantage for those employers and health insurers.

I had heard the rumor that CVS was building its first St. Louis store about 2 miles from my house, and I saw an article in the paper about it a few weeks ago. They will definitely be in the middle of Walgreen’s territory. I have about 5 Walgreen’s stores within 5 miles of my house. And, four of them were built in the past 3 years.

I find that competitive strategy very interesting. It’s like Home Depot and Lowes. They are usually located near one another. In that case, you might grow the market slightly, but I don’t think the same is true for pharmacy and convenience store items.