While drugstores now carry everything from Tylenol and tights to tuna rolls (although CVS said earlier this year it will no longer sell cigarettes), it’s rare that their offerings are cheaper than the same items at big-box and grocery stores — and that includes the drugs, experts say.
But that hasn’t stopped people from pouring their hard-earned dollars into buying goodies at these stores. On Tuesday, CVS Caremark announced that its second quarter earnings rose 11 percent to $34.6 billion, thanks, in part, to growth in its services and retail divisions; the company also boosted its earnings guidance for the year. Walgreens’ latest earnings statement was also good: In June, the company reported that its third quarter net earnings jumped more than 15 percent from the same quarter a year ago — and the company announced Monday the hiring of a new CFO, Kraft Foods’ Timothy McLevish, which experts say might be a move to further lower Walgreens’ tax rate. Also in June, Rite Aid announced a 2.7 percent revenue increase over the same quarter in June. Together, these three drugstores make up roughly two-thirds of the pharmacy and drugstore market in the U.S. What’s more, the pharmacy and drugstore industry is expected to grow at an annual rate of 2.6 percent from 2014 to 2019, compared with its 2.2 percent annual growth rate from 2009 to 2014, according to a report by IBISWorld.
But those cushy revenue numbers may be coming at a great expense to consumers. Indeed, pricing surveys from Consumer Reports and ConsumerWorld.org, as well as MarketWatch price checks, all reveal that drugstore prices can be higher than prices at grocery stores and big box retailers (such as Costco, Kmart, Target and Wal-Mart) on many commonly bought items. “Anything and everything can be expensive at the drugstore,” says Sally Greenberg, the executive director of the National Consumers League. “You have to be careful with drugstore shopping,” Greenberg says.
To be sure, drugstore prices vary widely from chain to chain and even at different stores in the same chain, according to an NCL analysis. And drugstores offer some items that are routinely cheaper than at big-box or grocery stores and they give plenty of deals to shoppers. “The rewards programs at the big drugstores are generous, and they often send emails with deals that are among the most usable and generous I see,” says Trae Bodge, senior editor at coupon site RetailMeNot.com. Plus, drugstores are convenient and many offer price-matching if you find the same product at another retailer for less, says Greenberg. A spokesperson for CVS says “we provide our customers with an unbeatable combination of value, selection, service and access” and a spokesperson for Walgreens says that “we focus on ensuring each of our stores is competitive within its trade area” and mentions that buyers can take advantage of its weekly sales and loyalty program. Rite Aid did not respond to a request for comment in time for publication.
But that doesn’t mean drugstores are the place to do much of your shopping. Here are some of the things that are often more expensive at drugstores.
Despite the name, drugstores might not be the best place to buy certain drugs, according to a study released in 2013 by Consumer Reports. The company sent secret shoppers out to 200 pharmacies throughout the country and asked them to find out prices for a month’s supply of five blockbuster drugs that recently became available as generic: Actos (pioglitazone), for diabetes; Lexapro (escitalopram), an antidepressant; Lipitor (atorvastatin), for high cholesterol; Plavix (clopidogrel), a blood thinner; and Singulair (montelukast), for asthma. Costco, the study found, is the cheapest place to buy drugs, while CVS has the highest prices and Rite Aid has the second highest. Walgreens was also more expensive than Costco, Wal-Mart and Kmart. A CVS spokesperson told Consumer Reports that its retail drug prices reflect other services offered by the chain, like drive-through windows and 24-hour pharmacies.
What’s more, prices for over-the-counter medications like Advil, Motrin and Aleve were also lower at Wal-Mart and Target than at the big drugstores, another Consumer Reports analysis found.
While many drugstores have expanded their food selections in recent years, “in general, the drugstore is not the best place to buy food,” says Seth Barnes, the director of marketing at Savings.com—though, he adds, drugstores do sometimes have special food promotions that make items cheaper than at most grocery stores. “You’ll pay convenience-store prices,” says Greenberg.
Consumer education website ConsumerWorld.org did a study comparing the prices of 25 grocery items ranging from cereal to milk to ice cream and found that, in general, grocery stores offered much better prices than drugstores on food. The average price for a pint of Ben & Jerry’s was $5.52 at drugstores, while it averaged just $4.42 at grocery stores—a 25 percent average difference in price; the price of a gallon of whole milk at drugstores averaged $3.69, while it was less than $2.99 at grocery stores; the price of Double Stuf Oreos was $4.52 at the drugstore but just $3.09 at the grocery store. “Every item we looked at was more expensive at the drugstore,” says consumer attorney Edgar Dworsky, the founder of ConsumerWorld.org.
What’s more, Dworsky says that while this study was done in the Boston area, he expects that drugstores in other areas would likewise charge higher prices for grocery items. He adds, however, that this doesn’t mean groceries are always more expensive at convenience stores.
While experts have long touted drugstores as the place to get makeup, in some cases it’s more expensive to buy it there than at a big box retailer. In February, MarketWatch compared prices for a handful of popular makeup products and found that some drugstores tended to have more expensive prices than both Target and Wal-Mart (which tended to have similar prices). A search online comparing prices for the popular Maybelline Great Lash mascara revealed it was priced at $4.49 at Target.com and $4.44 at Wal-Mart.com, but it was more expensive, by sometimes $1 or more, at CVS.com and Walgreens.com. The roughly $1 difference in price was also found with Covergirl Cheekers blush: At Target and Wal-Mart, the product ran $3.74, while it cost roughly $4.79 at the drugstores. (While Rite Aid’s prices on Friday were higher than Target and Wal-Mart’s for these products, on Monday they were similar to the big box competitor’s prices.) Almay Smart Shade Smart Balance Pressed Powder retails for a little under $10 at Wal-Mart and Target, while it costs nearly $14 at CVS, more than $14 at Walgreens and nearly $10 at Rite Aid. And Neutrogena’s Skin Clearing Concealer retailed for under $9 at Target and Wal-Mart, while it cost nearly $10 at CVS and Walgreens, though it was cheapest at Rite Aid, at around $8.
To be sure, this was not a scientific study and it was done online rather than in stores, but nonetheless, for the above and a handful of other products, some of the drugstores, on average, charged more.
There are a handful of other items that some drugstores tend to charge more for than grocery stores. For example, the ConsumerWorld.org study found that, in general, drugstores charged more for cleaning supplies, including laundry detergent, dishwashing detergent and spray cleaners than did area grocery stores. For a bottle of Formula 409, for example, the drugstores charged an average price of $4.69, while the supermarkets charged an average of $3.21. And for a 100-ounce container of Tide, the drugstores averaged $16.25, while the grocery stores averaged just $11.99.
Office and Gift Supplies
Other items you may want to consider buying elsewhere are gift wrap and greetings cards — consumer advocate Andrea Woroch says that “you are looking at 50 percent to 70 percent savings” if you buy these at the dollar store, as well as photo prints, which she says tend to be cheaper at Snapfish and Shutterfly. Finally, she says, “office supplies are generally not a good deal unless they’re on sale.” Instead, she recommends going to an office supply store or a discount big-box retailer for items like pens, pencils, notebooks and other office and school supplies.
Catey Hill covers personal finance and travel for MarketWatch in New York. Follow her on Twitter @CateyHill. This article originally appeared on MarketWatch.com and is reprinted by permission from Marketwatch.com, ©2014 Dow Jones & Co. Inc. All rights reserved.