Why Are Cvs And Walgreens Always Together? (Solved)

CVS and Walgreens are among the largest drugstore chains in America, with thousands of stores spread all over the country.

However, when visiting these pharmacies, you may have noticed that CVS and Walgreens stores are always located together. We have the solution to your puzzle!

Why are CVS and Walgreens always together?

CVS and Walgreens are always located together because it allows each to benefit from the advertising of the other. The stores are able to share maximum market shares and not have to look at the exact location of a competitor’s store.

Hotelling’s Model of Spatial Competition also explains why they are frequently located in close proximity.

Hotelling’s law is also known. It states that companies that offer similar products are more likely to find each other in order to capture the largest market share.

For example, if a customer from either store is unhappy about the service, pricing, or product range, they can easily walk next door to either a CVS or Walgreens and take advantage of their services.

The ‘Nash Equilibrium also states that if CVS, Walgreens, or both, decides to alter its strategy to not be near one another, it will end up losing market share, as well as its profit margins.

Is CVS owned by Walgreens and CVS?

CVS Health and Walgreens are not owned by the same people. CVS Health holds CVS Health, while Walgreens is part of the Walgreens Boots Alliance holding company.

Which Chain is the Most Popular?

Walgreens was first established in 1901 in Chicago, Illinois. CVS was created in 1963 in Lowell Massachusetts.

We can therefore see that Walgreens was the first to open (a lot sooner than CVS).

What is the most profitable store? CVS or Walgreens

CVS posted a net loss of approximately $1.5B during the 3rd quarter 2019, while Walgreens reported net losses of $677M during the 4th quarter.

This clearly shows CVS to be the more profitable store of the two.

Which Chain Can Fill More Prescriptions

CVS filled 35.2 million prescriptions for the 3rd Quarter 2019, while Walgreens had filled 283,000,000 in the fourth quarter.

To learn more about Walgreens, you can see our related posts on why Walgreens is so expensive, if Walgreens is a franchise, and also some interesting Walgreens statistics.

Conclusion: CVS and Walgreens are always together

Hotelling’s Law dictates that Walgreens is always near CVS. This law says similar businesses cluster together in order to maximise their market share. Customers will undoubtedly visit the same place, so it’s a good idea to be located together.

.Why Are Cvs And Walgreens Always Together? (Solved)