With Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp (NYSE: TGT) set to challenge the traditional drug store chains as they lower prices on prescription generic drug, what is in store for national chains like CVS Corp (NYSE: CVS) and Walgreens? You'd never know that CVS feels threatened, yet, especially after the retailer reported rising sales for the September same-store sales period. No surprise, since the full effect of Wal-Mart's massive move, which is only available in Florida for now, has not yet shaken up the retail drug industry. Add Target into that mix, and by this time next year, the heat may indeed be on, having a large impact on CVS and Rite-Aid among other. Rite-Aid is also in the midst of buying national drug retailer Brooks Drugstores from Canada's Jean Coutu.
CVS increased its third-quarter EPS guidance range to 31 to 33 cents from a previous range of 28 to 30 cents -- but a few more quarters of upped guidance may be all that's left in store for CVS and other retailers as they start feeling the heat of Wal-Mart and Target. Will they match the new 40% discounts on over 300 generic prescription drugs in an attempt to keep customers? If not, what do you think -- will Rite-Aid, CVS and Walgreens have a rosy or dark 2007?
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Reader Comments (Page 1 of 1)
10-11-2006 @ 11:43AM
josie said...
Walmart's cutting the price for generics, don't scare cvs and walgreens. Walmart is attempting to get good press for once. Walmart will only continue to hurt the little people. Local mom and pop neighborhood pharmacy's.
10-11-2006 @ 11:57AM
merle said...
After seeing the massive markups for every item in the major pharmacy outlets eg Eckerds, CVS Rite aid I never want to go in one again. Maybe this will bring them back to more realistic trading, but I doubt it.
10-11-2006 @ 1:16PM
jerry stone said...
Walmarts marketing ploy will save the consumer very little. 300 different generics and 12 of those are different strenths of amoxicillin, an already cheap antibiotic. Made great press but no bang
10-11-2006 @ 5:17PM
Dave said...
Well, Rite Aid isn't being acquired by Jean Coutu. They are actually acquiring Brooks from Jean Coutu.
I don't believe this tactic by Wal-Mart and matched by Target will have much of an impact on CVS, Rite Aid or Walgreens. The percent of cash business through those chains is low and the convenience of their locations will offset the saving between the copay and the $4 price at Wal-Mart.
10-11-2006 @ 5:42PM
Brian said...
Hi Dave,
You are correct -- the post has been updated. Thanks for the catch!
10-17-2006 @ 9:22AM
Erin said...
Wal-Mart will continue to hurt the little people? What about Walgreen's throwing a store on every available corner. I see them creeping up in the country ruining our local mom and pop chains. Not Wal-Mart!
11-12-2006 @ 4:00PM
R Dale Piedfort said...
" Walmarts marketing ploy will save the consumer very little" Pretty silly comment for one who obviously doesnt spend $400 per month on medication. Two of the four medications I take are on the list, Metoprolol Best Price $75.00 for 100 tablets, a 45 day supply, Verapamil SR 120mg best price $145.00 for a 90 days supply, now these are Canadian prices, U.S. Pricing is way higher. That figures out to $295.00 not counting shipping, Wal Mart pricing saves me $275.00 may not be much to you, but thats 20 percent of my Social Security, I think the real point here is the Drug Companies have had free rein for years, You know Wal-Mart isnt going to lose money on this. I dont like them any better than the next guy, but $275.00 is a lot of money took keep in my pocket.