Together, CVS and Walgreens command 90% of total US retail drug market. However, in recent days, both companies have explicitly disclosed their desire to flex muscle to outrun each other and other competitors. The major deals signed by both companies made this apparent. In this regard, could CVS for sale still be a safe channel for investors?
What’s the current market scenario?
Walgreens’ move to buy Rite Aid at a cost of approximately $17 billion emerged as a befitting reply to similar deal signed by CVS with Target’s pharmacy business for no less than $1.9 billion.
In between 2010-2015 the retail market for drug expanded by 1.3%. This makes it clear that the industry has many things to offer, from which anyone can claim a share of the profit pie. Keeping this trend intact, the market expansion will see a steep rise of 3% for the next 5 years or so. In this regard, we can presume that, no matter whoever seals the bigger deal, the profit window will remain open to companies maintaining a footprint in the industry. So, and yes, CVS for sale are still a viable option that you may look forward to, to consolidate your financial gains.
A “not so simple” model
The traditional retail narrative has felt a major tremor in the pharmacy segment. It seems like major online retailers, like Amazon, are using their leverage over a large client base to claim a possession in the sector, and to challenge the standing leaders. So, as said before, it is going to be an open to all battle. This again puts in question the feasibility of investing in CVS for sale.
CVS and Walgreens are taking it to the next level though.
Sensing this, the two major players are also stepping up their game. Selling drugs in retail is not like selling toys or other commodities. Both companies are making their pattern of service more specialized and top-notch. It is, in a way, attracting more people to get consultation from in-house pharmacists and doctor, instead of relying on online offerings completely; since drugs are nothing that you can toy away with. This places CVS for sale in a position of sheer advantage, indeed.