In September, on an earnings call with investors, Rite Aid’s executive vice president of retail, Andre Persaud, floated an idea to improve the chain’s performance in New York City: turn the drugstore into one giant vending machine in order to fight shoplifting. “We’re looking at literally putting everything behind showcases to ensure the products are there for customers to buy,” Persaud said.
Does that sound familiar? Many big-city pharmacy chains are halfway there, with plexiglass cases that have mushroomed over even low-priced household goods like shampoo and deodorant—to say nothing of laundry detergent, razor blades, and baby formula. It’s like shopping at a pharmacy 100 years ago, with a white-aproned clerk pushing around a ladder to grab your tinctures and tonics, except now it’s a minimum-wage cashier with a key ring. These days, you press a red button and a loudspeaker tells the store that you have a foot fungus. In July, a Manhattan Duane Reade made international news when it placed a can of Spam—Spam!—in a theft-deterrent plastic case.
It’s a fundamental change for a business that transformed urban life with its breakneck expansion in the first decades of the 21st century. And it comes alongside an industrywide retrenchment, as that exuberant overbuilding spree comes face to face with remote work and e-commerce. Contrary to the claims of law-and-order conservatives, big-city chain pharmacies are not closing because of shoplifting. But they are closing. Nationally, chain pharmacies declined by 6 percent between 2017 and 2021. Then came post-pandemic closures this year, and CVS’ announcement that it would shutter 900 stores over the next three years, reducing “store density in certain locations” in order to respond to “changes in population, consumer buying patterns, and future health needs.”
It’s the end of an era: Decried by historic preservationists and independent merchants, the big chain drugstore took urban neighborhoods by storm as big-city populations rebounded in the 1990s and 2000s. They weren’t just drugstores; they sold everything, seemingly everywhere, at all hours. For people without cars, they were a godsend. They were as convenient as a corner store, and what they lacked in friendly felines they made up for in huge selections and low prices. One such store was the colossal Walgreens that opened in Center City Philadelphia in 2013, offering Starbucks coffee and cut fruit over 26,000 brightly lit square feet. It was pitched as a “flagship for the pharmacy chain’s pivot into American urban centers,” wrote the Philadelphia Inquirer, and won over skeptics. The store closed in February.
The plastic cases for merchandise have become a symbol of a society in decline, even if the precise shape of the problem isn’t exactly transparent. Shoplifting is definitely cutting into store margins. Rite Aid says the problem cost it $5 million last quarter in New York City; Walgreens claimed to have closed stores in San Francisco as a result. You can be skeptical of companies playing the blame game, but retail experts are certain: If shoplifting weren’t chipping into profits, you wouldn’t see plastic cases at all. “It’s a solution of last resort,” says Joe Budano, whose company sells the cases to retailers. “As soon as you lock something up, you’re going to see a 5 to 25 percent reduction in sales.” Big pharmacy is a data-driven business, and if enough product disappears from the store, that product goes in a case.
What’s driving shoplifting? Take your pick: social dislocation, unemployment, and desperation from the pandemic, blocked-up court systems letting the sticky-fingered go free, lenient district attorneys, new standards for felony charges, big city police work stoppages, the expectation that shoppers cover their nose and mouth like bank robbers. Shoplifting has been used to justify a resurgent law-and-order politics that has energized GOP campaigns over the past couple of years, with the head of the California Republican Party claiming Walgreens closing five locations in San Francisco was evidence that “Democratic policies have created a crime spike.”
Stop the presses: Republicans want to get tough on crime. The National Association of Chain Drug Stores, however, pointed me toward a different solution: a federal bill that would require online marketplaces to verify the identity of third-party sellers. If shoplifting is indeed worse at some stores, it’s because thieves are reselling those products on Amazon and eBay.
Viral videos of mayhem have been deployed to exaggerate the problem. As Amanda Mull wrote in the Atlantic last year, statistics on shoplifting are garbled; if anything, they pointed to a decline from prepandemic numbers last year. According to the National Retail Security Survey, published in September by an industry group, the average “shrink” rate in 2021 was 1.44 percent, a decrease from the previous two years and in line with the five-year average.
And the relationship to store closings is tenuous. In the case of the San Francisco Walgreens, for example, data from the San Francisco Police Department showed few shoplifting incidents (though, of course, not all thefts are reported). Other drugstores have not cited shoplifting as a rationale for closing branches. Writing earlier this year in Curbed, Jack Denton made a convincing case that—whatever the New York Post would have you believe—a 15 percent rise in New York City retail theft complaints is not what’s driving store closures. Fundamentals are.
In 1999, as the pharmacy chain Duane Reade was making plans to double its footprint in New York City, CEO Anthony Cuti outlined a theory of selling to New Yorkers: “You rarely see a Manhattanite go out and do a $200 grocery shopping,” he told the New York Times. “They don’t have the time. They don’t have the space. There isn’t enough food in a Manhattanite’s apartment to feed any more than one person for about four hours.”
Cuti was exaggerating; every Manhattanite has an emergency ration of leftover Chinese food in the fridge. But his observation gets to the reason Duane Reade, Rite Aid, CVS, and Walgreens embarked on a huge urban expansion campaign starting around the turn of the millennium. They weren’t just drugstores anymore: As Target and Walmart developed pharmacies, pharmacies sought to round out their offerings to include toys, groceries, and beer. By 2017, the year of peak chain pharmacy, CVS had a 4 percent share of the country’s grocery market. Walgreens—which bought Duane Reade in 2010 and 2,000 Rite Aid stores in 2017—had 2.4 percent—as much as Whole Foods and Trader Joe’s combined.
And they weren’t just in the suburbs. “Our expansion strategy has moved more and more away from strip malls,” Suzanne Mead, a Rite Aid executive, said in 1997. “We want to bring neighborhood drugstore services closer to the communities that benefit from them. And often that means building a store at Main and Main.” Walgreens planned to expand in food deserts.
The growth was particularly dramatic in New York City, long a stronghold of mom ’n’ pop pharmacists. Duane Reade grew from 59 locations in 1996 to 322 in 2010. CVS grew from 47 to 110 in the same time frame. They adapted to New Yorkers’ needs—carrying more umbrellas, for instance—and to the urban landscape, abandoning a quest for free-standing stores with ample parking that had prompted a 1999 showdown with the National Trust for Historic Preservation over the chains’ deleterious effect on the urban fabric.
Instead, as the architect Michael Sorkin wrote, “The city has been infused with a nearly ubiquitous infrastructure of multinational commerce, which has, to a remarkable degree, fitted itself to existing commercial settings, spatial scales, and ethnic and class organization.” Drugstores breathed new life into old bank branches and settled on the ground floor of residential towers. On some corners rival pharmacies faced off like fluorescent sentinels. They were the embodiment of the cookie-cutter chain retail that has given city blocks the homogenous, self-similar quality of the suburbs. But they were so damn convenient. The measure of a city, an Angeleno once told me, is that you can buy toothpaste without getting in the car.
Love ’em or hate ’em, that trend has now reversed. Not only have chain pharmacies been in decline for five years, according to a study in the Journal of the American Medical Association, the risk of a pharmacy closing was “significantly greater” in urban areas and in low-income neighborhoods (though it was also greater for independent shops than chains), leaving more Americans in danger of living in a prescription desert. Residents of Rochester, Baltimore, and Boston who came to depend on their local Walgreens have found the relationship was not mutual, as the company closes inner-city locations this month despite protests from local elected leaders.
In New York City, outlets of Duane Reade, CVS, and Rite Aid reduced their footprint by 20 percent between 2014 and 2021, according to data provided by the Center for an Urban Future, a New York think tank. Over the past three years, the decline has been steepest in Manhattan—but numbers are also down by 10 percent in Brooklyn, Queens, and the Bronx. Jonathan Bowles, the center’s executive director, said those declines tracked with retail jobs in New York at large, which have also fallen 10 percent since the start of the pandemic. “Theft may be a contributing factor, but the far bigger issue is they’ve been hit hard by online shopping,” he said. Add to that the declining urban foot traffic brought about by remote work, a period of aggressive expansion, competition, and consolidation, and some pharmacy-business headwinds, and you have a recipe for downsizing.
The stores that remain, meanwhile, are losing some of the qualities that endeared them to New Yorkers in the first place. When Walgreens first decided to let customers roam the stores and pick items themselves, in the early 1950s, it meant redesigning shops, spicing up packaging, and posting price tags on every single item. Customers sometimes made mistakes. A retired Walgreens staffer told a company biographer of a time a dissatisfied customer placed a bottle of foil-wrapped suppositories on the counter of a Chicago store and said, “These are just too hard to swallow.” Mostly, though, they appreciated the same things most of us have come to love about chain drugstores: wide selection, low prices, speed, and privacy.
On the last two fronts, chains aren’t what they used to be. Far from being “frictionless,” to use a word retailers love, the experience is a grating series of interactions with harried staff who run from locked shelf to locked shelf—when they’re not helping customers handle self-checkout scanners. Joe Budano, of Indyme Solutions, says that will change soon: Indyme is debuting a Freedom Case, “the world’s first self-service locked case.” Now you can unlock your foot cream with face ID. It’s better than asking for help, but is it better than ordering online?
