CVS To Renovate, Add HealthHUB Concept To 600 Stores In 2020

CVS Health is leaning into the latter part of its name in a major way this year.

The pharmacy giant plans to roll out its HealthHUB wellness and healthcare centers to 600 stores by the end of this year, CEO Larry Merlo told CNBC in a televised interview. Merlo told CNBC he believes the company can open HealthHUBs at a pace of 12 per week, with the goal of opening 1,500 such locations by the end of 2021.

CVS piloted HealthHUBs in Houston at three stores starting in the end of 2018, and expanded it last year to 50 locations across four markets, CNBC reports. The hubs take up about 20% of the front-of-house space for an average-sized CVS, and replace some non-health-related shelves such as greeting cards or toys.

HealthHUBs are staffed by healthcare professionals who can offer some diagnostic capabilities, testing and advice on managing chronic conditions. The staff is supplemented by digital kiosks for health and insurance questions. CVS' capabilities to offer expanded health services are bolstered by its acquisition of health insurance giant Aetna for $70B that was finalized at the end of 2018.

Merlo claimed that the pilot locations have experienced boosts to both foot traffic and margins, but added the caveat that the small sample size is not necessarily predictive of widespread success, CNBC reports. Among the first markets to be targeted in the 2020 rollout are Virginia, Maryland, Florida, North Carolina, Ohio, Boston and Dallas-Fort Worth.

Walgreens, CVS' largest competitor in the U.S., has been carving out similar spaces called "health corners" to its own pharmacies since late 2018. The chain will be closing hundreds of stores as a way to offset the costs of its redevelopment program.

Though the two major chains are pursuing similar strategies, their fortunes have been heading in opposite directions, as shares of CVS increased in value by 13% last year, while Walgreens parent company Walgreens Boots Alliance lost about 25% of its value in the 12-month period ending in November.