US Drug Stores Market Report 2024
The US drug store market is navigating a complex landscape marked by economic resilience amid high inflation and interest rates.
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Executive Summary
- What you need to know
- Market size & forecast
- Market predictions
- What consumers want & why
- Opportunities
- Key opportunities
- Key opportunities, continued
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Market Dynamics
- Market context
- Market drivers
- Annual inflation sits at 2.9% as of July, the lowest it has been since March 2021
- Graph 1: headline CPI and shelter CPI, 2021-24
- Despite improvement, consumers remain concerned about inflation
- Graph 2: consumer concerns, 2024
- Concerns lead to spending and shopping behavioral shifts
- Graph 3: inflation behaviors, 2023 versus 2024
- The unemployment rate slightly edged up in July, with less-than-expected job growth
- Graph 4: unemployment rate, 2019-24
- Nearly 40% of consumers have seen their financial situations change for the better in the past year
- Graph 5: change in financial situation over the past 12 months, 2024
- Even so, nearly two thirds of Americans describe their personal financial status as something other than “healthy”
- Graph 6: financial health, 2024
- Consumer sentiment remains down, but is expected to rebound soon
- Graph 7: consumer sentiment index, 2022-24
- Households’ outlooks on their personal finances remains bullish
- Graph 8: opinions on financial future, 2024
- Other market drivers
- Major shifts in 2024 drug store sector: consolidations, bankruptcies, and healthcare investments by top chains
- Other trends in the broader healthcare industry impact drug stores
- Other trends in the broader healthcare industry impact drug stores, continued
- Consumers’ health-related priorities impact drug stores go-to-market strategies
- Consumers’ health-related priorities impact drug stores go-to-market strategies, continued
- Gen Z and Millennials will comprise 40% of US population in 2028
- Obesity rates remain high, compounding the need for healthcare services
- Graph 9: prevalence of adults aged 20 and over with obesity, by demographic characteristics, 2017–March 2020
- GLP-1 drugs like Wegovy present a new treatment for obesity, but the jury’s out regarding their long-term solution viability
- Inflation Reduction Act influences drug sector
- Also in play are several pieces of legislation that could bring more transparency to prescription drug pricing
- Market size and forecast
- Industry will settle into slow, moderated growth pattern
- Retail sales and forecast of drug stores
- Market segmentation
- Prescription sales protect the sector from losses
- Front of store sectors are taking a hit
- Outside of pharmacy, drug stores’ outlook is dim
- Outside of pharmacy, drug stores’ outlook is dim, continued
- Retail sales of drug stores, by segment
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Consumer Insights
- Consumer fast facts
- Consumer fast facts, continued
- Retailers shopped
- Drug stores have lost customers in the past two years
- Graph 10: retailers shopped – nets, 2022 versus 2024
- Slippage is occurring for drug stores on both ends of the generation spectrum
- Graph 11: retailers shopped – nets, by generation, 2024
- Trended data reveals a shift to online-only retailers
- Status quo for the most part, but some optimism from the past year
- Graph 12: shopping incidence at drug stores in past 12 months, 2024
- 18-34s and parents are among those shopping more at drug stores
- Graph 13: shopping more at drug stores, by key demos, 2024
- Older and low income consumers pose threats to the channel
- Graph 14: shopping less at drug stores, by key demos, 2024
- Older Millennials more likely to be shopping elsewhere
- Graph 15: shopping incidence at drug stores, by generation, 2024
- Drug stores must look to evolve offerings and provide more overall value
- Drug stores are underperforming on some of the key drivers of retailer preference
- Graph 16: reasons for shopping less at drug stores in past year, 2024
- Online retailers rise while Walmart grows customer base
- Drug stores continue to face threats from other retail outlets
- Amazon and club stores see the biggest growth
- Graph 17: retailers shopped, 2022 versus 2024
- Leading drug store chains are getting sandwiched in the middle of other retailer choices
- Most consumers are not loyal to any one retailer when shopping for drug store needs
- Method of shopping
- As ecommerce grows, it’s even more important for drug store retailers to provide a seamless shopping experience
- Graph 18: shopping method for drug store items – nets, 2024
- Graph 19: method of shopping for drug store items, 2022 versus 2024
- Younger generations unsurprisingly drive ecommerce growth
- Graph 20: method of shopping for drug store items including nets, by generation, 2024
- All retailers see a significant number of hybrid shoppers
- Nearly 30% of consumers plan to shop online more for their drug store necessities
- Graph 21: intention to shop online for drug store needs in next 12 months, 2022 versus 2024
- Intention to shop more online spans all ages
- Graph 22: intention to shop online more for drug store needs in next 12 months, by key demographics, 2024
- Items purchased by channel
- Consumers shop around for their drug store needs
- Drug stores lose some BPC and household goods shoppers
- Four in 10 men buy food or beverages at drug stores
- Graph 23: items purchased at drug stores, by gender, 2024
- Drug stores have the right to “own” the health/wellness space
- Graph 24: items purchased at drug stores, by generation, 2024
- Black and Hispanic consumers turn to drug stores for non health-related needs
- Graph 25: items purchased at drug stores, by race or ethnicity, 2024
- Spotlight on BPC
- Drug stores should focus on winning back their beauty shoppers
- High purchase incidence across demos, but…
- Graph 26: BPC purchase incidence at drug stores in past 12 months, by key demographics, 2024
- …drug stores need to work toward becoming the preferred destination, not just one of many destinations
- Graph 27: BPC purchase incidence by retailer type, 2024
- Beauty and personal care is an opportunity area
- Shoppers think it’s easy to find beauty items at drug stores, and they appreciate the inclusive nature of the product selection
- Graph 28: reasons for buying BPC items at drug stores, 2024
- Drug stores can outshine grocers via product availability and ease of shopping; pricing strategies will need to change to compete with mass
- Graph 29: drivers for shopping BPC at drug stores versus grocery stores and mass merchandisers, 2024
- Many opportunities to draw more younger generations through BPC offerings
- Graph 30: reasons for buying BPC items at drug stores, by gender and age, 2024
- Black consumers are strong advocates of drug stores for beauty items
- Graph 31: reasons for buying BPC items at drug stores, by race and ethnicity, 2024
- Samples and reminders can drive visitation
- Graph 32: incentives to buy BPC items at drug stores, 2024
- Medical beauty could be an opportunity area
- Walmart enhances virtual try-on feature by adding haircare brands
- Walmart expands into premium beauty
- Walmart adds new start up beauty brands to its accelerator program
- CVS launches private label “self-care” brand
- Similarly, Walgreens launches its own branded skincare line
- Amazon is not only a threat in pharmacy, but beauty too
- Shopping behaviors
- Improving the omnichannel experience
- Loyalty programs can incent repeat purchasing, but the rewards must be seen as valuable enough, or consumers won’t hesitate to shop around
- Nearly four in 10 shoppers use drug store’s loyalty programs
- Graph 33: participation in drug store loyalty programs, by key demographics, 2024
- Drug stores can use loyalty programs as a tool to stay competitive
- Consumers want incentives that make them feel understood and/or special
- Graph 34: important features in a loyalty program, by generation, 2023
- Loyalty programs can be a lifeline for those financially struggling consumers
- Graph 35: important features in a loyalty program, by financial situation, 2023
- Older consumers will use home delivery for Rx, younger consumers like in-store pickup
- Graph 36: usage of delivery and pickup options at drug stores, by generation, 2024
- Consumers are looking for mindful choices
- mCommerce is the growth driver for ecommerce: mobile devices trump computers
- Graph 37: devices used to shop online, by generation, 2023
- Gen Z, Younger Millennials and parents in particular heavy mobile users when shopping drug stores
- Graph 38: mobile phone usage related to drug store shopping, by key demographics, 2024
- What else are consumers doing when using mobile apps?
- Why do consumers use their phones in stores?
- Drug stores can reach Gen Z and Millennials on their mobile devices
- Graph 39: behaviors and attitudes toward mobile shopping – any agreement (net), by generation, 2023
- CVS Health promotes its app, touting the personalization benefit
- Drug stores can use social media to build genuine customer relationships and enhance digital presence
- Parents are two times as likely than nonparents to use social media to learn about drug stores’ offerings
- Graph 40: use of social media when shopping drug stores, by key demographics, 2024
- Social media is a source of discovery, making it an ideal place to educate consumers on healthcare-related matters
- Graph 41: behaviors and attitudes toward social media platforms, by key demographics, 2024
- Leading retailers are using social to share health tips and promote deals
- Attitudes toward shopping at drug stores
- There are opportunities to not only expand the number of private label offerings but also look for ways to innovate in this space
- Consumers are ready to embrace private label enhancements from drug stores
- Graph 42: attitudes toward store brands, 2024
- Innovating around private label can appeal to all generations
- Graph 43: attitudes toward store brands – any agreement (net), by generation, 2024
- Store brands help consumers across income levels be smarter about managing budgets
- Graph 44: attitudes toward store brands – any agreement (net), by financial situation, 2024
- Amazon expands Amazon Aware, its own private label line of sustainable products
- CVS launched Well Market, a private label consumables line
- Walmart launched Bettergoods, a new private label aimed at delivering elevated culinary experiences to customers
- Drug stores are well positioned to become preferred destinations for holistic healthcare management
- Consumers are taking a multifaceted approach to wellness
- Consumers support drug stores’ expansion into holistic health
- Consumers are generally supportive of drug stores trying to rebrand themselves as experts on health and wellness
- Graph 45: attitudes toward holistic health, 2024
- Men are more open than women to all opportunities
- Graph 46: attitudes toward holistic health – any agreement (net), by gender, 2024
- Younger consumers are very receptive to mental healthcare services at drug stores
- Graph 47: attitudes related to holistic health – any agreement (net), by generation, 2024
- Black consumers show higher levels of agreement in all cases compared to all the general population
- Graph 48: attitudes toward holistic health – any agreement (net), by race and ethnicity, 2024
- The drug store of the future will be centered around total wellness
- Consumers see drug store clinics as a good option for healthcare
- Graph 49: attitudes toward retail health clinics, 2024
- Younger consumers and men are the biggest advocates of drug stores’ clinics
- Graph 50: attitudes toward retail health clinics – any agreement (net), by gender and age, 2024
- Parents are also big fans of drug store retail health clinics
- Graph 51: attitudes toward retail health clinics – any agreement (net), by parental status, 2024
- Multicultural consumers appreciate the quality of drug store clinic services
- Graph 52: attitudes toward retail health clinics – any agreement (net), by race or ethnicity, 2024
- Traditional drug stores are determining how best to integrate healthcare services into their offerings
- Other retailers outside the channel will threaten drug store’s territory
- Amazon offers two ways to get healthcare
- Amazon’s clinic services are in addition to its pharmacy services, further cementing it as continuing threat to traditional drug stores
- Graph 53: attitudes toward Amazon Pharmacy, by generation, 2023
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Innovation and Marketing strategies
- These are some of the key marketing themes in the drug channel
- Using technology to enhance customer engagement
- Amazon uses AI to make it easier and more convenient for consumers to save money on prescriptions
- Experimenting with new store layouts: pharmacy in the front?
- Using loyalty programs to engage shoppers
- Spotlight on Walgreens
- Walgreens explores shoppable TV with Roku
- Spotlight on CVS
- CVS enhances its retail media network
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Appendix
- Market definition
- Consumer research questions
- Consumer research methodology
- Generations
- Abbreviations and terms
- Forecast methodology
- Forecast fan chart methodology
- Retail sales and forecast of drug stores at inflation-adjusted prices
- Health, beauty and personal care outlook
- Food and beverage outlook
- General merchandise outlook
- Outlook for “other” products
The drug store industry in the US is evolving as consumers redefine value, and how they shop for medicine. Recognize the key market growth areas with this report’s data-backed analysis. Below, we’ve provided the current landscape and hand-selected market statistics.
US Drug Stores Market – Current Landscape
The US drug store market is navigating a complex landscape marked by economic resilience amid high inflation and interest rates. Consumer behaviors are shifting, with a heightened focus on price-consciousness and a notable increase in online shopping, especially among younger generations. A key reason drug stores are losing some customers is because of price – 64% of respondents that are shopping less at drug stores said the reason is because they can get better prices somewhere else.
Furthermore, the market is seeing a growing emphasis on holistic health and wellness, creating opportunities for drug stores to expand their offerings in this space. Major chains like Walgreens, CVS, and Rite Aid are adapting to these changes by enhancing customer engagement through technology and innovation.
Despite facing significant challenges from inflation and competition, the drug store sector is poised for moderate growth, driven by prescription revenues and strategic expansions in private label offerings and retail health clinics. The sector must also navigate the disruptive influence of Amazon and other major retailers in the healthcare space. Technological advancements that yield personalization, particularly in mobile commerce and AI, are critical for drug stores to attract and retain customers.
US Drug Stores – Market Statistics
- Drug store market share: Walmart continues to lead for retailers that have been shopped at, with 63% of consumers shopping there. Amazon now follows, but its boost doesn’t appear to drawing from other market leaders, suggesting more people shop at multiple places for their drug store needs.
- Drug store industry insight: Nearly four in 10 use drug store loyalty programs, indicating strong participation. It could be higher, though, as Gen Z shows lower-than-average usage. Appealing further is key for drug stores, as 68% of adults agree joining a retailer’s loyalty/rewards program encourages them to shop more with that retailer
- Drug store industry analysis: The definition of ‘value’ is changing, as consumers consider new ways to shop. The raised willingness to buy private label brands is evidence of this. Consumers are discovering they don’t need to trade quality to save money, as two-thirds see store brands at drug stores as just as good as name brands. Continuing to launch in the private label space is then, by consumers’ definition, feasible.
US Drug Stores Market Report – What’s Inside?
Key Topics Analyzed in the Report
- Economic resilience despite high inflation and interest rates
- Sales predictions including breakouts for key sectors
- How consumers shop for drug store needs (eg store, online) and what drives these decisions
- Shopping behaviors throughout the purchase journey
- Consumer attitudes and usage of retail health clinics
- Growing emphasis on holistic health and wellness
- Opportunities in beauty and personal care
- Strategies by major chains to adapt to industry changes
Report Scope
For the purposes of this Report, Mintel has defined a drug store as a retail store where a primary component of the store is a pharmacy, selling prescription medicine and staffed with a pharmacist. Other categories commonly found at drug stores include OTC medicine, beauty and personal care, household needs and a limited selection of food. When referring to “drug stores,” this Report considers those that are traditional drug stores, not including other retailers with pharmacies such as grocery stores, warehouse clubs or mass merchandisers. These other retailers are also discussed in the Report as locations consumers may shop for drug store needs, yet are not referred to as “drug stores.”
Meet the Expert Behind the Analysis
This report was written by Diana Smith. Diana joined Mintel in 2014, and is Associate Director of Retail & eCommerce. Diana brings a unique background and perspective having previously spent her career in advertising agencies, specializing in media planning and strategy. Diana is naturally curious, highly analytical and enjoys helping clients realize untapped opportunities.
US drug stores face strong competition and must focus on their strengths in holistic healthcare services to compete, all while improving the omnichannel experience.
Diana Smith
Associate Director, Client Advisor – Retail & eCommerce
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