Walmart announced on Tuesday it will start delivering prescriptions straight to consumers’ doors in as little as 30 minutes – threatening to further cripple struggling pharmacies like CVS and Walgreens.
The discount retailer has made its prescription delivery option available in Arkansas, Missouri, New York, Nevada, South Carolina and Wisconsin, the company said.
Walmart expects the delivery option will be available in 49 states by the end of January — leaving out only North Dakota due to state laws.
The delivery service is free for Walmart+ members. It will cost all other customers $9.95.
Walmart hopes those needing prescriptions will also to tack on other items, like chicken noodle soup or tissues, to boost overall sales.
Nearly 60% of Walmart’s annual revenue comes from its groceries division, but health and wellness is a growing category for the company.
The health division accounts for about 12% of its annual revenue in the US, the company said in a filing for the fiscal year ended Jan. 31.
The announcement of Walmart’s new speedy delivery system sent shares of CVS and Walgreens down 2.1% and 6.8%, respectively on Tuesday – despite both chains offering their own same-day delivery options.
Walmart has a large consumer base, with coverage of more than 86% of US households, the company said.
It expects the majority of its existing customers will shift over to the delivery service, according to Bloomberg.
Tom Ward, Walmart’s chief e-commerce officer, told Bloomberg the company is “aware of the wider landscape.” Walmart will be able to leverage its fast delivery times and large network of stores with the new prescription service, Ward said.
Walmart said the delivery option is a response to customer demand. More than half of Walmart customers expressed a desire to have their prescriptions delivered along with their groceries in a single online order, according to a recent Walmart survey.
The discount chain has been able to attract inflation-battered customers. Walmart shares are up 53.5% so far this year.
Meanwhile, traditional pharmacies like CVS and Walgreens are struggling to stay afloat. CVS shares are down 29.6% so far this year, and Walgreens shares are down 63.5% in the same period.
Consumers have pulled back on spending due to high prices and long-lasting inflation. Low spending coupled with competition from Amazon and big-box retailers has hampered CVS’ and Walgreens’ business.
Both companies have taken steps to cut costs.
CVS ousted its CEO, Karen Lynch, and replaced her with David Joyner this week as it faces growing pressure from activist investors.
The pharmacy chain unveiled plans to cut $2 billion in expenses over several years, including layoffs across its corporate sector affecting about 1% of its workforce, or 2,900 jobs.
CVS is also close to completing its three-year plan to shutter 900 stores. The company has closed 851 locations as of August.
Last week, Walgreens said it will close about 1,200 stores over the next three years – including 500 in the next fiscal year alone.