CVS Pharmacy, which once operated 12 drug stores in the Toledo area a decade ago before abruptly pulling out of the market amid financial difficulty, is now planning a return to the local retail market that has since become dominated by Rite Aid and Walgreens.
CVS of Woonsocket, R.I., a subsidiary of CVS Caremark Corp., is the second-largest pharmacy chain in the United States behind Walgreens. It recently sought a zoning change from the Toledo Plan Commission to construct a 13,225-square-foot store at the southeast corner of Monroe St. and Douglas Road.
The drug store chain has secured two pieces of property that it intends to merge to create a 1.5-acre site for its store, which will have a drive-through window for its pharmacy. The requested zoning change comes up for approval at the plan commission meeting on Thursday.
Local commercial real estate agents say CVS has secured three or four other sites for new stores, and is hunting for at least two more.
Mary Ann Wervey, a consultant with retail developers the Zaremba Group of Cleveland, is working with CVS on the Monroe Street store. She said the retailer has also optioned property in Bowling Green for a store.
"This has been a long time in the works and CVS has been sniffing around for a number of years," Kurt Pollex, a commercial real estate agent with the Reichle Klein Group, said. "It was just a question of when was the right time for them to pull the trigger."
Mike DeAngelis, a spokesman for CVS, declined to comment on its Toledo-area plans. "We have no announcement for new store locations in Toledo at this time. We are exploring opportunities in themarket but have no comment on any specific sites," Mr. DeAngelis said in a statement.
But George Rosenbaum, chief executive of Leo J. Shapiro & Associates, a retail marketing firm in Chicago, said consumers should expect CVS to enter the market with several stores and fight hard to steal market share from Rite Aid, Walgreens, Walmart, Kroger, Target, and every other retailer in the prescription drug business that sells health and beauty products.
"CVS does not easily concede any metropolitan area in America. Their goal is to achieve national distribution in every metropolitan area," Mr. Rosenbaum said. "I don't know why they left Toledo initially. … But it sounds like after 10 years the dust may have settled and they want to return to Toledo.
"The fact that there is good distribution between Rite Aid and Walgreens now won't discourage them because they already tend to compete with one or two major chains in every market they're in," Mr. Rosenbaum said.
CVS was one of the major players in Toledo's drugstore retail war that began in 1994. Initially, the Revco chain was contesting Rite Aid's market share when Revco was acquired by CVS in 1997. Between 1997 and 1999 CVS and Rite Aid built 12 Toledo-area stores.
Eventually, CVS had 12 stores, many of them two years old or less in 2001 when it pulled the plug on its Toledo-area stores, leaving 320 workers without jobs, as part of a plan to close 200 underperforming stores nationwide.
A 16 percent decline in the company's third-quarter earnings in 2001, prompted by the eight-month long recession that began in March, 2001, led to the closings.
At the time, CVS said the Toledo stores were low volume and not meeting expectations.
Besides the 12 stores in Toledo, Sylvania, and Lambertville, CVS closed stores in Bowling Green, Tiffin, Defiance, and Monroe.
Many of the Toledo-area stores are still standing and were bought by other drugstore chains or are in use by other retailers, such as auto parts stores. CVS still owns its former store at 3020 Cherry St.
But local commercial real estate agents said the drugstore chain isn't looking to reclaim its old sites, instead preferring to build stores that will accommodate its new store format that includes walk-in health clinics run by CVS Caremark subsidiary MinuteClinic Inc.
"The amount of goods that are now sold by bigger box drug stores have continued to increase, so they [CVS] are selling convenience-store groceries and general merchandise, and perhaps even more importantly, is that many of the stores now have the MinuteClinics," Mr. Rosenbaum said. "The idea is that once you have patients as customers in the MinuteClinics, you can tie them into the pharmacy," he said.
Mr. Rosenbaum said the arrival of CVS will make it even harder on the remaining independent pharmacies, but "they will also take business from convenience stores, and other small specialty stores, perhaps even Walmart. Spending will not increase in Toledo though. They will take market share from others already in the market."
Contact Jon Chavez at: email@example.com or 419-724-6128.
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