Walgreens will acquire the pharmacy patient prescription files and related pharmacy of 185 Fred’s stores across 10 Southeastern states for $165 million, plus the value of the related pharmacy inventory. Fred’s will continue operating its retail stores at most of the locations after the pharmacies close.
The deal will increase the presence of Walgreens pharmacies in the Southeast. Affected Fred’s patients will be transferred to the Walgreens network, giving them access to pharmaceutical services at all 9,800 locations worldwide.
Fred’s has been tightening its belt since the aftermath of the failed merger between Walgreens and Rite Aid, which would have resulted in Fred’s acquiring 865 stores for $965 million. Fred’s sold assets of its specialty pharmacy unit EntrustRx to CVS Health for $40 million plus inventory value costs in May. The retailer still operates 162 pharmacies across nearly 600 stores following the latest transaction.
However, Fred’s isn’t the only retailer selling pharmacy assets — Stater Bros. Markets is selling parts of its SuperRx Pharmacies business to CVS and exiting the pharmacy business completely. Records and inventory from all 22 SuperRx locations will be transferred to nearby CVS locations.
Stater Bros. will close the pharmacies by Sept. 28 and remerchandise the spaces over the following months, helping the retailer put an emphasis on its grocery offerings. The affected stores will remain open during the conversion process.
“This business decision will allow the company to grow areas of our core food business that meet the evolving food needs and shifting grocery preferences of our customers,” said Pete Van Helden, CEO of Stater Bros., in a statement. “We remain committed to providing our valued customers with the very best grocery shopping experience.”
Amazon Heats Up Retail Healthcare Competition
Competition has been intensifying in the retail healthcare industry. Amazon recently entered the space through the acquisition of PillPack, which makes monthly deliveries of medications in time-stamped, pre-sorted dose packaging to help people who manage multiple medications. Walgreens, CVS and Rite-Aid lost a combined $12 billion in value in the hours following the announcement.
CVS rolled out its own prescription delivery service in June, charging $4.99 per order, well below the $19.95 prescription delivery price charged by Walgreens. CVS also offers same-day delivery in select cities for $8.99.
Walgreens has taken the fight international by acquiring a 40% stake in Sinopharm Holding GuoDa Drugstores, a Chinese retail pharmacy chain. GuoDa operates more than 3,800 retail pharmacies in 70 cities.