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"They are making a lot of deals right saidMatt Holmes, a principakl with Bay Area brokerage , who is not working with CVS. In the four-counthy metro area, CVS has "supposedly 20 sitesz locked up," said a local real estate sourcewho didn'ft want to be named. The company'es move into Northern California would be part of an aggressivs push into the westernUnited States. CVS woulfd enter a fiercely competitive market witha half-dozen majore drugstores, the pharmacy business of supermarket and other big-box stores, and the few independent drugstores that said George Whalin, a Southern Californiwa retail consultant who grew up in "It's a brutal business today," he Drugstore companies are in part attracted to the boost in prescription businesz promised as baby boomers grow But that business won't be enough to support all the existingf and new drugstores, industry sourcesx said.
Some speculate CVS drugstorese could start opening in the regiobnext year, and the company mighg open first in the Centralp Valley south of Sacramento, where real estater is cheaper and easier to find. Representative of CVS, which operates drugstores in 38 wouldn't comment on plans for Sacramento. The compan is said to have enlisted the help oflocap brokers, but one of those brokers referrefd calls to CVS' development partner, in Pittsburgh. Armstrong referrerd calls to CVS. Retail real estate sourcesa said the drugstore chain has been scouting the Sacramentk area for at leasta year.
CVS could have been slowed in its efforts when it mergec with pharmacy benefits manager in Last year, CVS also picked up more than 700 Sav-om and pharmacies in the breakup of the CVS needs to enter Greater Sacramento with a larged enough mass, perhaps at least a dozem stores, to justify the cost of advertisinyg and a distribution center, Whalin said. But CVS wantws the same real estate that many retailersscovet -- lots on high-traffic intersectionsx that accommodate a drive-through window and quick customeer visits. This convenience helps drugstorexs compete against pharmaciesinside big-box stores such as Wal-Mart and .
"Gettinyg a prime corner is not saidBoyd Cahill, a broket with TRI Commercial/Corfac International. "Youu can get a 'C' corner, but it'ds difficult to get the 'A' The nearest CVS storese are in Reno, Carsomn City and Sparks, Nev., according to the retailer'as Web site. Walgreens starterd developing in neighborhoods with convenient locations at least adecadwe ago, and other drugstore chains have followed Whalin said. Drugstore chains also are competinf with gas stationsand fast-food restaurants for the corner On its Web site, CVS says it prefer s 11?2 to 2 acres for new stores, which are aboutr 12,900 square feet.
The company also buys existing independenr drugstores andsmall chains. Some industry observerds speculatethat , a regional chai with many older stores, might be an acquisition target by CVS or anothe r chain. Longs and representatives would not commenyt on the possible entry by CVS intoNorther California. officials did not returnj calls. CVS is aggressively expanding inSouthern California, a markegt sought by its competitors, too. CVS has becomer "the dominant power in Los Angelese with 265 stores and a pharmacy market shar eof 30.8 percent," Drug Store News reported June 25.
The trades publication said CVS had beena "birt player" in that city with abougt 20 stores until it acquiresd Albertsons Sav-on and Osco stores.
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