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Walmart, Target, CVS, and Walgreens will loan space for coronavirus test centers

March 13, 2020, 10:27 PM UTC

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Walmart, Target, and pharmacy giants Walgreens and CVS Health will play a central role in the U.S. government’s plan to make COVID-19 tests accessible across the country as the outbreak of the illness worsens.

The CEOs of the four retailers, along with their peers from a number of healthcare companies, stood on Friday afternoon in the Rose Garden as President Trump announced a plan to widely expand the availability of tests for the coronavirus.

Trump pledged that there would be 500,000 more novel coronavirus tests available by early next week, and 5 million within a month. As the virus has spread through the United States, the Trump administration has been criticized for being too slow in making the test available. Trump also declared a coronavirus-related state of emergency on Friday.

The administration recruited a number of health companies to produce more tests at a faster pace, and, thanks to their massive store fleets across the country, the four retailers as test centers.

Walmart, which operates some 4,600 stores in the United States, will make parts of some of its parking lots available for drive-through testing. Walmart CEO Doug McMillon said his company would add more of its parking lots as the availability of the test grows. Walmart’s lots have often served as staging areas during emergencies, most notably after Hurricane Katrina in 2005.

Target, which has 1,800 stores, will do the same.

“Normally you could view us as competitors,” Target CEO Brian Cornell said during the press conference, “but today we are focused on a common competitor,” he added in reference to the coronavirus. (Cornell did not waste the opportunity to plug Target during his short address, noting that stores are open and selling food and other essentials.)

CVS Pharmacy and Walgreens, which operate about 10,000 locations across the U.S. will also take part.

Beyond any points for good corporate citizenship, the four retailers all stand to benefit from the move.

Walmart, already one of the top four pharmacy operators in the U.S., could burnish its health credentials at a time it is experimenting with health care clinics.

It opened the first Walmart Health clinic in Georgia last year, offering primary care, lab work, imaging, dental, and counseling services at lower prices than many doctor’s clinics. The largest retailer in the U.S. stated clearly last September that its ambition was to become America’s “neighborhood health destination” though it has not said how quickly or widely it would expand the health clinic format.

That will bring it into more direct competition with CVS, which is looking to reduce its reliance on traditional retail, like selling toothpaste and soda, with a new format, called HealthHUB, where 20% of its store space is allocated to health services. The goal is eventually to have 1,500 CVS stores become HealthHUBs.

A few years ago Target sold its pharmacy business to CVS, which now operates small pharmacies inside Target stores. And helping out with the coronavirus testing could help drum up store visits at a time when, after two very strong years, Target’s growth is expected to cool. What’s more, Target has also made a big push into wellness and healthier foods so it stands to benefit as a retailer associated with health services.

CVS and Walgreens have both struggled with retail sales in the last few years, though both are seeing improvement in their pharmacy businesses. General merchandise has not picked up at either chain. Some of that is because more customers are choosing to pick up prescriptions at drive-throughs rather than inside the stores. But both chains, similarly to Walmart, Target, and Costco have been big destinations in the last week for shoppers stocking up on essentials, so the drive-up testing is a natural fit and could also generate more store visits.

The retailers’ contributions to the coronavirus fight is consistent with their traditional place in shoppers’ minds in times of national emergencies, when, as Walgreens president Richard Ashworth put it, “our stores are beacons of the community.”

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