CVS Pharmacy to return to area

Monroe St. site to be 1st since firm’s ’01 exit 

9/11/2012
BY JON CHAVEZ
BLADE BUSINESS WRITER

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: jchavez@theblade.com or 419-724-6128.