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.