Business: Target Sells Pharmacy to CVS

How can Target continue to expand in today’s business world? The company recently sold its pharmacy to CVS Health for $1.9 billion. As CVS continues to grow outwards, Target has to look to streamline its business in ways that Walmart or Amazon.com do not necessarily have to. Target does not have the giant presence of Walmart or the online control of Amazon. Its pharmacies have taken a hit in the past years because of this sort of competition. CVS’s acquisition of the Target pharmacies “will provide consumers with expanded options and access to our unique health care services that lead to better health outcomes and lower overall health care costs,” said the president of CVS, Larry J. Merlo said. This partnership will allow CVS to expand to new regions of the country, and Target will also expand to open smaller TargetExpress stores, which will include pharmacies run by CVS. Target stores currently deal with a wide array of merchandise, and operating pharmacies has complicated their business success. Handing over this control to CVS—the largest pharmacy company in the United States—should free up Target resources and allow the company to focus on other aspects of its business. It may be cutting revenue with the CVS business deal, but the company is also cutting costs.

Contributor: Hannah Smith

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