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Category: COVID-19, Net Lease Retail, Report, Research Reports Tags: Coronavirus, COVID-19, CVS, drug store, net lease retail, pharmacy, rite aid, Walgreens

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Customer shopping habits rapidly shifted during the global crisis, making it difficult for retailers to predict business trends. Drug store visits nationally increased by 28 percent from February 19 to March 27 with the South region leading by a 51 percent increase during that same time, according to Four Square. This could indicate that shoppers are focusing on prescriptions, over-the-counter medications, household essentials, and other personal care items. Pharmacies hit the hardest were located in heavy traffic areas like the Las Vegas Strip, where casinos, restaurants, and nearby businesses are all closed. When the pandemic hit, customers were buying months-worth of prescriptions or looked to pharmacists for advice on how to prepare. Today, drug stores are continuing to fare through the strict lockdown policies across the nation, despite an overall decline in sales, as they begin to roll out on-site coronavirus testing stations.

How Specific Tenants are Performing


Walgreens locations have been serving their customers through their drive-thrus and have partnered with delivery app, Postmates, to allow for contactless deliveries to customer homes. Walgreens has announced the expansion of telehealth features through their Walgreens Find Care™ platform and drive-thru COVID-19 testing. Walgreens reported an initial 26% increase in same-store sales for the first 21 days of March. Global Chief Financial Officer James Kehoe attributed this to pharmacy and sanitary item sales during the company’s fiscal second-quarter earnings call. Even though the last week of March saw a decrease by the mid-teens. Walgreens remains hopeful in their preparedness and stock of essential items.


During the second week of March, visits to CVS increased by nearly 28 percent, a 27 percent increase compared to last year. CVS Health has announced plans to hire 50,000 new employees ranging from associates to distribution center employees to customer service professionals to help with demand. Along with their competitors, CVS will also conduct drive-thru COVID-19 testing but will be limited to specific locations and will strictly test first responders and healthcare workers.


Rite Aid reached new heights in foot traffic for the past 12 months during the second week of March at a 27 percent increase, and their online sales saw ten times their normal demand levels. Following similar steps to its competitors, Rite Aid will also offer delivery services, expanding drive-thru COVID-19 testing to more states, and pick-up at drive-thru to half of their 2,400 retail locations nationwide.

Guidance From our Agents

Pharmacies have stayed strong thus far in the pandemic, offering customers sanitary items and other essentials. The steps taken by the aforementioned pharmacy giants today are setting a tremendous precedent for many others to follow when handling employee and customer health. The substantial traffic increases drug stores experienced in the first few weeks of March will offset the expected decline in the coming weeks as the novel coronavirus continues to create uncertainty. Drug and supply shortages remain a concern, especially for those who rely on specific drugs for symptomatic treatment, maintenance of chronic health conditions, and disease treatment. Investors are cautious to assume that drugstores are immune to the economic impact of COVID-19. However, it’s too early to determine what the future holds for retail properties in general.


Matthews™ is committed to keeping the commercial real estate community informed and continuing to offer our services during these market changes. With updates and challenges released daily, please contact a Matthews™ specialized agent for guidance during this uncertain time, and for more insights on COVID-19 and CRE, visit our dedicated coronavirus website.

The Centers for Disease Control and Prevention is offering information and updates on the novel coronavirus (COVID-19) outbreak, the World Health Organization is tracking the number and location of confirmed cases of the virus and Building Owners and Managers Association International has provided the following emergency preparedness guidelines for commercial and residential property managers and landlords.

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