As Retail Woes Continue, CVS Among Few Firms Expanding
- Feb 06, 2009
With retailers across the country closing stores and filing for bankruptcy in the face of a weakening economy, CVS pharmacy is among the few bucking that trend. The firm is making plans to accommodate growing distribution demands with the development of a new 750,000-square-foot facility in Chemung, N.Y. The project carries a price tag of $90 million to $100 million. Circuit City, KB Toys, Linens ’n Things and Mervyns are among the many retail companies that have had to shut their doors as the economy continues its tailspin. As per a report by Marcus & Millichap Real Estate Investment Services, about 4,630 store closures were announced during the first three quarters of 2008 alone, with the food and beverage industry accounting for over one-third of the total. And most chains that are still in business are losing business. According to an International Council of Shopping Centers index, department stores, apparel chains, and luxury stores all suffered a decrease in same store sales from 2007 to 2008. However, a select few retail types are thriving–discount stores, wholesale clubs and, drugstore chains like CVS. The very tiny group of businesses that are expanding includes supermarket chain Harris Teeter, which announced in late January that it will construct a $101 million distribution center in King George County, Va. Final approvals from various state and local agencies are still pending, but if all goes as expected, CVS will erect the distribution center on a 311-acre site off White Wagon Rd. The retail pharmacy giant anticipates closing on the property acquisition by the close of the first quarter. With a location just off I-86 in the southern part of the state, about 100 miles south of Syracuse, the new facility will allow CVS to serve 350 of its stores in the northeast. “This project is a result of extensive evaluation of our current and future capacity to service our growing Northeast market,” a CVS spokesperson told CPN. “Our current distribution centers in this region are at, or close to, full capacity and this new facility will complement our current distribution network to ensure we continue to provide best-in-class service to our stores.” Ground is on target to break on the building this spring for a scheduled completion in 2011. About 600 new jobs will be created with the distribution center’s opening.