Is CVS Playing Hardball?
Wednesday, June 27th, 2007Sources say CVS is clamping down on large beauty manufacturers, demanding more to keep their merchandise at the front of the store. This trend has been underway for some time, say sources, but the costs are escalating.
If a makeup vendor wants a wall display with its name at the front of the store, these sources say they’ll have to pay 100 percent. CVS will help brands that are either exclusives or niche products, say sources. Drug chains say they do not want to compete with Wal-Mart, Target, Kmart or dollar stores where national brands are discounted.
The drug chain industry is dominated by Walgreen and CVS, and both chains have been expanding their product offerings at the expense of national beauty brands. While Rite-Aid has a large group of stores, vendors still are concerned if the acquisitions can be properly integrated. At a recent visit to Walgreen at 23rd Street and Park Avenue in New York City, niche brands gained as did apparel in the prime spot allocated on the street level.