Walmart announced Tuesday that it will begin delivering prescriptions directly to consumers' doors in as little as 30 minutes, a move that threatens to further cripple struggling pharmacies like CVS and Walgreens.
The discount retailer has made prescription delivery options available in Arkansas, Missouri, New York, Nevada, South Carolina and Wisconsin, the company said.
Walmart expects this delivery option to be available in 49 states by the end of January, but only North Dakota is excluded due to state law.
If you are a Walmart+ member, shipping is free. All other customers will be charged $9.95.
Walmart hopes people with prescription needs will also buy other items like chicken noodle soup and tissue paper, boosting overall sales.
Nearly 60% of Walmart's annual revenue comes from its grocery division, but health and wellness is a growth category for the company.
The company said in its fiscal year ending Jan. 31 that its U.S. health division accounted for about 12% of its annual sales.
The announcement of Walmart's new expedited delivery system sent CVS and Walgreens stock prices down 2.1% and 6.8%, respectively, on Tuesday, even though both chains offer their own same-day delivery options.
Walmart has a large consumer base, covering more than 86% of U.S. households, the company said.
According to Bloomberg, the company expects a large portion of its existing customers to migrate to home delivery services.
Tom Ward, chief e-commerce officer at Walmart, said: told Bloomberg The company “recognizes the broader picture.” Ward said the new prescription service will allow Walmart to take advantage of faster delivery times and a larger store network.
Walmart said the delivery options are in response to customer demand. According to a recent Walmart study, more than half of Walmart customers said they would like to have their prescriptions delivered along with their groceries in the same online order.
The discount chain has been successful in attracting customers suffering from inflation. Walmart stock has increased 53.5% since the beginning of the year.
Meanwhile, traditional pharmacies like CVS and Walgreens are struggling to survive. CVS stock is down 29.6% since the beginning of the year, and Walgreens is down 63.5% over the same period.
High prices and persistent inflation are causing consumers to cut back on spending. In addition to competition from Amazon and major retailers, low spending is hampering CVS and Walgreens' business.
Both companies are taking steps to cut costs.
CVS fired CEO Karen Lynch this week and replaced her with David Joyner as the company faces increasing pressure from activist investors.
The pharmacy chain unveiled plans to cut costs by $2 billion over several years, including layoffs across its corporate division that will affect about 1% of its workforce, or 2,900 jobs.
CVS is also nearing completion of a three-year plan to close 900 stores. The company had closed 851 stores as of August.
Walgreens announced last week that it will close about 1,200 stores over the next three years, including 500 in the next fiscal year alone.
