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Are CVS and Rite Aid Getting Out of the Toy Business?
From:
Richard Gottlieb -- Toy Industry Expert Richard Gottlieb -- Toy Industry Expert
For Immediate Release:
Dateline: New York, NY
Tuesday, January 5, 2021

 

An extremely reliable source has informed me that Rite Aid and CVS are not including toys in their remodeled stores. My source tells me that they visited a recently redesigned CVS store and found that the orientation was away from general merchandise in general and toys specifically (they were removed from the permanent planogram). What had increased in space was an on-premises clinic and cosmetics department. The lighting was brighter, some floor areas were made of wood, and as a result the ambiance was softer. They also told me that one of their contacts reported a similar development in a recently redesigned CVS store in their area.

It’s not just CVS. Rite Aid appears to have dropped toys from the current planogram and is currently looking at in and out displays only. Rite Aid has 2464 stores, and CVS has 9967. The potential loss in square footage dedicated to toys in potentially 12,431 outlets. We don’t know that all stores will be affected, but it seems wise to consider why these drug chains are potentially moving away from toys and what the impact will be for the toy industry.

The most likely cause is a perceived need on the part of the drug chains to reinvent themselves as healthcare products and services providers. The addition of clinics plus changing the interiors to provide a softer edge is a straight forward means of differentiating from other providers. Competing with mass merchandisers and supermarkets in the highly competitive retail mosh pit has become progressively less attractive. There is money to be made; however, by engaging families and women (remember the bigger cosmetics areas) in an area that the drug stores can dominate – family health.

The result for the toy industry would be a further decline in the number of bricks and mortar square feet dedicated to toys. As an industry, we have already been hurt by the loss of Toys R Us and independent toy stores that failed to survive 2020.

As my source points out, the reduction in the number of retailers selling toys is not a new problem. Those of us who remember the 1980s and 1990s also remember the literally hundreds of large retail chains (not stores) that no longer exist. Child World, Kiddy City, Ames, Bradlees, Caldor, Shopko, Zayre, Best Products, Service Merchandise, Cotter, M.W. Kasch, and so many more have gone to retail heaven (or in some cases, retail hell).

Two thoughts come to mind. The first one is: Is this a good idea? Remember that Sears and JC Penney removed their toy departments, only later to put them back. They forgot that parents and children shop together, and a toy department will not just draw the child but the family.

My second thought is that, should these drug chains remove their toy departments in all stores, there will be more zip codes without toys (toy deserts). If that is the case, other retailers will find opportunities to provide toys, a product category that has proved to be recession and even
coronavirus resistant.

Richard Gottlieb

Global Toy Experts / Global Toy News

646 675 3019

richard@globaltoyexperts.com

 

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Name: Richard Gottlieb
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Group: Richard Gottlieb and Associates, LLC
Dateline: New York, NY United States
Cell Phone: 646-675-3019
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