Despite their best efforts to keep a tight lid on local development plans, the Massachusetts-based CVS drugstore giant has identified six locations to open full-service pharmacies before year’s end, CARIBBEAN BUSINESS learned. Development sources close to the retail chain confirmed CVS, which has had a local team in place for over a year, plans to develop a local store network comparable to industry rival Walgreens with 100 locations over the next three to four years.
On average, a new retail drugstore costs about $2 million to $3 million to build without real estate. This puts the potential initial investment by CVS at $200 million, with each store helping generate 50 new direct and indirect jobs.
“This is very significant because CVS’ entry strategy is focused mostly on acquiring its locations instead of leasing them, thus considerably increasing their overall investment in Puerto Rico,” the industry source explained.
The drugstore chain, according to the source, is looking to open its first cluster of five to six stores by the end of the year. However, some of the locations—as in the case of the full-service CVS drugstore in Dorado—are near completion, just waiting until the rest of the first cluster is ready to open. The Dorado store, across the street from a Western Auto outlet, has approximately 15,000 square feet of retail space and drive-through facilities.
“The arrival of CVS to the local market is good news for everyone,” said retail industry veteran Mike Nolla. “From an industry standpoint, it is good news for both CVS and Walgreens. Competition is always good to keep retailers performing at their best, as was the case with Kmart and Walmart; both of them have continued to grow and thrive in this market.”
CVS’ standard store format, ranging from 9,000 to 15,000 square feet, will help bring some parity into a retail category in which Walgreens has reigned supreme for the past 15 years. Ultimately, according to Nolla, this competition will benefit consumers, and that is good news.
Other markets slated to have a CVS location in the near future include Arecibo, Old San Juan, Humacao, Carolina and three locations in Bayamón, two which are already under construction, according to CARIBBEAN BUSINESS sources. About 11 CVS stores have already been approved by the Planning Board, the source said.
Walgreens executives never had any illusions of keeping the market all to themselves. To be sure, Walgreens hasn’t taken the news lightly, as it has been quietly but aggressively expanding and preparing for CVS’ certain arrival. Chief among its strategic moves was last year’s acquisition of 20 former El Amal drugstore locations to further strengthen its retail network.
Walgreens and CVS have grown to become retail giants throughout the U.S. mainland, with 65% to 70% of their square footage dedicated to the sale of general retail merchandise. CVS has set the pace in terms of expansion, with a new store opening every 17 hours.