Schnuck Markets said it has agreed to sell its retail and specialty pharmacy businesses to CVS Pharmacy, a subsidiary of CVS Health Corp., Woonsocket, R.I. CVS said it would acquire and operate 99 of Schnucks pharmacies, rebranding them as CVS. In addition, CVS will acquire the prescription files from 11 other Schnucks pharmacies and transfer them to nearby CVS locations. The move was is in the best interest of our customers, our teammates and our company, a Schnucks spokesperson said.
“As Schnucks continues to expand our emphasis on health and wellness, this collaboration with CVS is an opportunity for us to align with a company that has a similar focus,” said Todd Schnuck, chairman and CEO of St. Louis-based Schnucks. “This partnership allows us to continue to provide quality pharmacy services to our customers in a manner they’ve come to expect, while supporting our mission to nourish people’s lives. It also provides our pharmacy teammates an opportunity to further their careers with a premier retail pharmacy chain.”
Terms of the deal were not disclosed.
CVS said it would post all pharmacy positions and interview all current Schnucks pharmacy employees who apply. In-store changes for customers will be rolled out over a period of several months after the completion of the transaction as CVS Pharmacy and Schnucks work to ensure the smoothest possible transition.
“We have great admiration for Schnucks and believe CVS Pharmacy can bring additional clinical services to its customers. One of CVS Health’s strategic imperatives is to be local,” said Jon Roberts, executive vice president and CEO of CVS Health. “By opening CVS Pharmacy locations within Schnucks stores, we’re increasing access to high-quality care and meeting customers where they are. Schnucks is a best-in-class grocer, and we’re honored to partner with them to bring our best-in-class pharmacy capabilities to their customers.”
Schnucks patients will have access to CVS Specialty’s expertise in providing ongoing disease education, counseling and benefits verification, as well as coordination of care with multiple healthcare providers, comprehensive patient education and adherence management.
Schnucks is just the latest grocery retailer to sell its pharmacies; while shoppers who use the pharmacy tend to spend more than those who do not, the department has become increasingly difficult to realize profits from because lower reimbursement rates from third-party providers put margins under pressure, a phenomenon noted by Kroger and Village Super Market in recent financial updates.
Kroger Chief Financial Officer Gary Millerchip, speaking March 10 at the Bank of America Merrill Lynch Consumer Retail & Technology conference, said he expected Kroger would encounter additional profitability headwinds related to pharmacy this year, although “not as dramatic” as the retailer experienced in 2019, according to a Sentieo transcript. The average Kroger pharmacy customer tends to spend three times more than those who not use the pharmacy at Kroger, Millerchip added.