Report Summary
Providing the most comprehensive and up-to-date information and analysis of U.S Drug Stores Retail markets including the behaviors, preferences and habits of the consumer.
US drug store revenues will exceed $318 billion this year and continue posting gains through 2025, although the pace of growth is projected to slow down in light increased competition from outside the channel, especially from Amazon, which is now selling prescription drugs. With new partnerships and leadership, all traditional drug store chains were already in the midst of change even before COVID-19 disrupted everything and brought new challenges and opportunities to the drug channel.
While they are all executing strategies differently, they share a common focus around expanding product offerings and services within and beyond the pharmacy to focus more on wellness and digitizing operations. 2021 will be the year of the vaccine and immunity support, both significant opportunities for drug stores to build trust and earn new customers while retaining current shoppers.
Quickly understand
- The impact of COVID-19 on consumer behavior and the drug store sector.
- How a down economy is impacting drug stores.
- Where consumers are shopping for drug store needs and what they are buying by channel.
- Usage and attitudes toward in-store retail healthcare clinics.
Covered in this report
Definitions used in this report: 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.
Brands featured: Amazon Pharmacy, CVS Health and Aetna, Village MD, Walgreens, Walmart, Rite Aid and more.
Expert analysis from a specialist in the field
Written by Diana Smith, a leading analyst in the Retail sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
It’s a challenging time for drug stores. However, with a global pandemic shaping consumer perceptions and behaviors, including influencing more proactivity when it comes to managing their holistic wellbeing, drug stores have never been in a more prime position to shine. The future of the drug store channel involves offering more services in addition to tangible benefits and, thus, making healthcare more accessible to more people.
Diana Smith
Associate Director – Retail & Apparel
Table of Contents
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Overview
- What you need to know
- Key issues covered in this Report
- Definition
- COVID-19: Market context
- Economic and other assumptions
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Executive Summary
- Top takeaways
- Market overview
- Figure 1: Total US revenues and fan chart forecast of drug stores, at current prices, 2015-25
- Impact of COVID-19 on retail and drug stores
- Figure 2: Short-, medium- and long-term impact of COVID-19 on retail and drug stores, February 2021
- Opportunities and Challenges
- Be a go-to resource for all things COVID-19
- Promote clinics and expanded healthcare services
- Provide value in various forms
- Keep accelerating omnichannel advancements
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The Market – Key Takeaways
- Pandemic brings pros and cons to drug stores
- Drug stores’ cash cow – prescriptions – at risk
- It’s all about immunity right now
- Self-care is “in”
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Market Size and Forecast
- Sales are up, but not as much as competitors’
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- Figure 3: Total US revenues and fan chart forecast of drug stores, at current prices, 2015-25
- Figure 4: Total US drug store revenues and forecast, at current prices, 2015-25
- Impact of COVID-19 on retail and drug stores
- Figure 5: Short-, medium- and long-term impact of COVID-19 on retail and drug stores, February 2021
- Lockdown
- Reemergence
- Recovery
- COVID-19: US context
- Learnings from the last recession
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Segment Performance
- Pandemic effect varies; road ahead is challenging
- Figure 6: Share of total US drug store revenues, by segment, at current prices, 2015-25
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- Figure 7: Total US drug store revenues and forecast, by segment, at current prices, 2015-25
- Pandemic effect varies; road ahead is challenging
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Market Factors
- High unemployment leads to more value-conscious shoppers
- Figure 8: Consumer confidence index and unemployment rate, 2011-20
- Most Americans had insurance pre-pandemic, but this could be changing
- Figure 9: Percentage of people by type of health insurance coverage, 2019
- Obesity was bad even before the pandemic
- Figure 10: Prevalence of obesity among US adults aged 20 and over, by gender and age and gender and race and Hispanic origin, 2017-18
- COVID-19 disrupts seasonal patterns
- An aging US population leads to marketing opportunities for senior care
- Figure 11: Population by age, 2014-24
- High unemployment leads to more value-conscious shoppers
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Market Opportunities
- Boost the immunity-boosting products
- Figure 12: Health priorities, November 2020
- Providing more access to self-care services at home
- Invest more in wearable healthcare technology
- Boost the immunity-boosting products
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Companies and Brands – Key Takeaways
- Amazon now selling Rx
- Leaders pivot to focus on primary care clinics and holistic wellness
- Walmart advances healthcare offerings
- Pandemic highlights need for omnichannel retailing
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Competitive Strategies
- Amazon barrels into pharmacy services
- Figure 13: Attitudes toward Amazon’s entry into pharmacy – pre-announcement, January 2020
- Walmart offers insurance services including Medicare
- CVS Health and Aetna are addressing gaps with patient care
- Figure 14: CVS’ Unite Us platform
- CVS expands preventive wellness strategies
- Figure 15: CVS Health promotes Live Better by CVS Health line
- Walgreens expands focus on medical care
- Rite Aid takes divergent approach to focus on pharmacists
- Digital advancement a common theme
- Amazon barrels into pharmacy services
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The Consumer – Key Takeaways
- Grocery stores gain ground on drug stores
- Outside channel leakage impacts all categories, even drug stores’ cash cow
- Drug stores perform well on cleanliness and trustworthiness
- The year of ecommerce
- COVID-19 influences how people shop at drug stores
- Telehealth and expanded services central part of drug stores’ future
- In-store retail health clinics gain ground; face big opportunity with COVID-19 vaccine dissemination
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Consumer Trends Impacting Drug Stores
- Wellbeing
- Value
- Technology
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Retailers Shopped
- Outside channel leakage continues
- Figure 16: Retailers shopped – nets, 2019-21, December 2018, January 2020 and November 2020
- Online-only pharmacies steal share
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- Figure 17: Retailers shopped – 2019-21, December 2018, January 2020 and November 2020
- Drug stores expand appeal to younger consumers
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- Figure 18: Retailers shopped – part one, by age, November 2020
- Figure 19: Retailers shopped – part two, by age, November 2020
- Walmart strongly preferred by Black shoppers
- Figure 20: Retailers shopped, by race and Hispanic origin, November 2020
- Walmart wins rural residents
- Figure 21: Retailers shopped, by area, November 2020
- High duplication between retailers
- Figure 22: Retailers shopped, by retailers shopped, November 2020
- Outside channel leakage continues
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Perceptions of Traditional Drug Store Retailers
- Not much difference between the leaders
- Figure 23: Perceptions of traditional drug store retailers, November 2020
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- Figure 24: Walgreens’ reward program email highlights value
- Drug stores can improve perceptions among women
- Figure 25: Perceptions of CVS, select attributes*, by gender, November 2020
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- Figure 26: Perceptions of Walgreens, select attributes*, by gender, November 2020
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- Figure 27: Perceptions of Rite Aid, select attributes*, by gender, November 2020
- Drug stores’ mission-driven efforts could help them appeal to younger generations
- Figure 28: Perceptions of retailers on select attributes, by generation, November 2020
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- Figure 29: Walgreens Red Nose Day
- Not much difference between the leaders
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Items Purchased by Channel
- Drug stores lead only in one area, and this lead is slipping
- Figure 30: Select items purchased – nets, by channel, November 2020
- Outside competition impacting all primary drug store categories
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- Figure 31: Items purchased, by channel, November 2020
- Brands see drug stores as essential to pandemic-proof their business
- Figure 32: Beauty and personal care items purchased, by channel, by gender and age, November 2020
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- Figure 33: Drew Barrymore launches Flower Beauty brand in CVS
- Drug stores lead only in one area, and this lead is slipping
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Method of Shopping
- Half of drug store consumers are doing more shopping online
- Figure 34: Online shopping in light of COVID-19, total and by age for shopping more, November 2020
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- Figure 35: Method of shopping, November 2020
- A fifth of drug store consumers are first-time digital shoppers
- Figure 36: First-time online drug store shoppers, by age, November 2020
- Method of shopping varies by retailer
- Figure 37: Retailers shopped, by method of shopping, November 2020
- Easily replenishable CPG goods will see ecommerce gains
- Figure 38: Items purchased – any location (net), by method of shopping, November 2020
- Half of drug store consumers are doing more shopping online
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Shopping Shifts due to COVID-19
- Drug stores are garnering new customers, more visits and more trust amid the pandemic
- Figure 39: Shopping changes due to COVID-19, November 2020
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- Figure 40: CVS communication about COVID-19 vaccine
- Figure 41: Walgreens communication about COVID-19
- Younger consumers most likely to make shopping shifts
- Figure 42: Shopping changes due to COVID-19, by age, November 2020
- Drug stores making headway with multicultural consumers
- Figure 43: Shopping changes due to COVID-19, by race and Hispanic origin, November 2020
- Drug stores are garnering new customers, more visits and more trust amid the pandemic
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Interest in Tools and Services
- Interest in preventative health will grow demand for tools and services
- Figure 44: Interest in tools and services, November 2020
- Younger consumers will fuel adoption of digital advancements
- Figure 45: Interest in tools and services, by gender and age, November 2020
- Black consumers interested in personalized services
- Figure 46: Interest in select tools and services, by race and Hispanic origin, November 2020
- Figure 47: CVS offers care coaches
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- Figure 48: Walgreens holds webinar for people with chronic illness
- Interest in preventative health will grow demand for tools and services
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Retail Healthcare Clinics
- Retail clinics see growth over past year
- Figure 49: Attitudes related to coronavirus vaccine, January 4-15, 2021
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- Figure 50: In-store retail clinic visitation, November 2020
- Figure 51: Rite Aid disseminates information about COVID-19 vaccine
- Men and adults under 45 most likely to visit a clinic
- Figure 52: In-store retail clinic visitation – any (net), by key demographics, November 2020
- Clinic visitors express satisfaction with experience; challenge lies more with generating initial visit
- Figure 53: Attitudes toward in-store retail clinics, November 2020
- Seniors appreciate clinics for their convenience
- Figure 54: Attitudes toward in-store retail clinics, by age, November 2020
- Parents are supporters of clinics, seeing them as quality alternatives to primary doctors
- Figure 55: Select attitudes toward in-store retail clinics, by parental status, November 2020
- Hispanics express some reservations about in-store healthcare clinics
- Figure 56: Select attitudes toward in-store retail clinics, by race and Hispanic origin, November 2020
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- Figure 57: CVS MinuteClinic promotes telemedicine
- Opportunity to expand beyond common illness treatment to wellness provider
- Figure 58: CVS promotes MinuteClinic as a resource for chronic care needs
- Retail clinics see growth over past year
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Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Forecast methodology
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
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Appendix – The Market
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- Figure 59: Total US revenues and fan chart forecast of drug stores, at inflation-adjusted prices, 2015-25
- Figure 60: Drug store sales and forecast of health, beauty, and personal care products, at current prices, 2015-25
- Figure 61: Drug store sales and forecast of health, beauty, and personal care products, at inflation-adjusted prices, 2015-25
- Figure 62: Drug store sales and forecast of food and beverages, at current prices, 2015-25
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- Figure 63: Drug store sales and forecast of food and beverages, at inflation-adjusted prices, 2015-25
- Figure 64: Drug store sales and forecast of general merchandise, at current prices, 2015-25
- Figure 65: Drug store sales and forecast of general merchandise, at inflation-adjusted prices, 2015-25
- Figure 66: Drug store sales and forecast of other* products, at current prices, 2015-25
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- Figure 67: Drug store sales and forecast of other* products, at inflation-adjusted prices, 2015-25
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Appendix – The Consumer
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- Figure 68: Perceptions of CVS, by generation, November 2020
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- Figure 69: Perceptions of Walgreens, by generation, November 2020
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- Figure 70: Perceptions of Rite Aid, by generation, November 2020
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- Figure 71: Items purchased – nets, by channel, November 2020
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