The US drugstore channel is undergoing a major transition as it loses shoppers and sales.
The drugstore shopper base declined 10% in 2024, with shopper traffic falling every month compared with 2023, according to ShopperScape® data from January-December 2023 and 2024. At the same time, rising shrink, locked inventory, and elevated prices have dented sales in key front-store categories, putting pressure on the format to evolve.
In response, CVS and Walgreens have taken bold steps to reconfigure their footprints. CVS is in the process of closing 900 stores over three years. Walgreens plans to close 500 stores in 2025 alone, a number that may reach 1,300 by 2027. The closures aim to sharpen the retailers’ focus and improve their long-term viability, but fewer stores also mean fewer chances to connect with health-minded shoppers.
Who’s Gaining the Drug Channel Shopper?
Drug channel shoppers are gravitating to Walmart and Amazon.
Walmart is now the top retailer for health and wellness, while Amazon has climbed into a tie for third, surpassing even supermarkets, according to ShopperScape® data from 2021-24. What sets them apart? Stronger value perception, streamlined digital experiences, and wider assortments in categories the drug channel once dominated.
Amazon is especially transforming how people shop for health. Amazon Pharmacy plans to expand same-day prescription delivery to 20 more US cities in 2025. The expansion means that by the end of this year, 45% of US customers will be able to get their prescriptions on the same day. Amazon is also investing heavily in at-home care, digital health services, and AI tools that streamline medication management and empower consumers to take control of their health.
What can CPG brands do to win in this new health landscape? Here are five strategic pivots.
1. Follow the shopper, not the shelf.
Shopper behavior is shifting fast. The drug channel lost shoppers in key front-store categories like OTC medications and beauty, according to ShopperScape® data from February/May/August/November 2023 and 2024. Amazon, Walmart Neighborhood Market, and Costco gained share, according to January-December 2023 and 2024 ShopperScape® data.
CPGs must rebalance retail strategies to meet consumers where they are spending, not just where products have traditionally been shelved.
2. Activate retail media where it delivers ROI.
Retail media is about influence at the digital shelf. Amazon Ads and Walmart Connect allow brands to target by mission, behavior, and purchase history. With front-store traffic softening at many drugstores, diverting more spend into high ROI, digital-first retail media ecosystems can protect share and build loyalty where it counts.
3. Treat Amazon like a strategic health partner.
Amazon is building a vertically integrated healthcare ecosystem. With digital health, AI-powered prescription fulfillment, and preventive care initiatives, Amazon is positioning itself as a next-generation health destination.
CPGs should align their innovation pipelines with Amazon’s healthcare ambitions, including OTC formats, wellness tech partnerships, and replenishable pack options.
4. Lean into the value + wellness equation.
According to a November 2024 McKinsey report, 82% of US consumers say wellness is a top priority, and price sensitivity is rising across all demographics.
CPG brands that succeed will combine clear health benefits with clear value. This means the right pack sizes, clean labels, and channel-specific exclusives designed for Walmart and Amazon shoppers who seek both better-for-you and budget-friendly options.
5. Reimagine the drug channel, but don’t abandon it.
While the drug channel is under pressure, it still plays a critical role in healthcare, especially for prescriptions, vaccinations, and urgent care. Shoppers still see CVS and Walgreens as valuable for their efficient pharmacy services and health expertise, according to data from the January 2025 ShopperScape® Drug Deep Dive.
CPGs have an opportunity to lean into healthcare trip missions, partner on loyalty programs, and support new drugstore formats.
The traditional drugstore experience is evolving, not disappearing. However, the days of relying solely on front-store placement to drive category growth are over.
Today’s health shoppers are omnichannel, driven by experience, and looking for value. Whether they are picking up Tylenol from Amazon, grabbing collagen water at Walmart, or visiting a CVS HealthHub, they expect more, as in more convenience, more curation, and more control.
For CPG brands in key categories like beauty, OTC medications, skin care, and personal care, now is the time to rebalance, reinvent, and reinvest where growth is happening. Amazon and Walmart offer a new engine for health and wellness growth. The drug channel still matters, but only if your strategy reflects today’s reality, not yesterday’s routine.
For more insights, see our Shopping for Health and Wellness Deep Dive. And if you’ll be attending the 2025 National Association of Chain Drug Stores Annual Meeting, connect with us.