Walmart Inc. (NYSE: WMT) announced on Tuesday that it will begin offering Pharmacy Delivery services for both new prescriptions and medication refills, intensifying competition in the pharmacy retail space.
The Details: Walmart is rolling out Pharmacy Delivery in six states and expects the new service to expand to 49 states by the end of January 2025. Walmart+ members will receive free delivery on Pharmacy Delivery, and non-Walmart+ members will pay the standard delivery charge of $9.95.
"Our extensive footprint across the nation combined with our deep expertise in pharmacy uniquely positions us to make a profound impact in the communities we serve," said Kevin Host, senior vice president of Pharmacy at Walmart U.S.
Why It Matters: Walmart's Pharmacy Delivery is another blow to struggling pharmacy retailers CVS Health Corp. (NYSE: CVS) and Walgreens Boots Alliance, Inc. (NASDAQ: WBA) who offer comparable delivery services. The retail giant's move into prescription delivery could lead to market share losses for CVS and Walgreens who already compete with Amazon.com, Inc.'s (NASDAQ: AMZN) same-day prescription delivery in some areas. Amazon has plans to expand its pharmacy delivery to 20 more U.S. cities by 2025.
CVS and Walgreens have said they are struggling with falling reimbursement rates for prescription drugs. Both retail chains have shuttered store locations and announced cost-cutting measures as part of corporate turnaround strategies.
The stores may face increased pressure on profit margins and staffing needs due to increased competition from Walmart. Both retailers have already reduced pharmacy hours in response to staffing challenges, which have been partly driven by the need to support delivery services.
WMT, CVS, WBA, AMZN Price Action: According to Benzinga Pro, Walmart shares are up 0.67% at $81.35, CVS shares are down 1.74% at $57.16, Walgreens shares are down 4.64% at $9.96 and Amazon shares are up 0.42% at $189.87 at the time of publication Tuesday.