CVS Shutters Inner-City Stores
Across several metropolitan areas, CVS has demonstrated a pattern of closing stores in the least affluent areas and in communities of color only to open in more in well-to-do or whiter areas, already saturated with pharmacy options. As a result, CVS’s corporate decisions on store openings and closings in several cities have increased the access gap.
- Over the last five years, CVS has closed three stores in areas of Philadelphia where people of color are a majority while opening only one store in those areas. In majority-white Philadelphia communities, CVS has opened one store for every store it has closed.
- In Greater Los Angeles, CVS has closed stores in lower-income areas and opened them in more affluent communities. The average income in Greater Los Angeles communities where CVS opened new stores last year -- $59,862 -- was 29 percent greater than the $46,578 average income in communities where CVS closed stores in the last four years.
- In Southern Connecticut, CVS has closed eight stores and opened four since 2004. The average median household income of the zip codes where stores closed ($57,798) was more than $7,500 lower than the median household income of the zip codes where CVS opened stores ($65,322) during the same period. In Stamford, exactly one store was closed and another opened during the period. The store CVS closed was located in a lower-income part of town (median household income $38,523) than the area where CVS opened the store, where median household income was $66,150.
When CVS closes stores in low-income neighborhoods, other businesses may not be able to open in the shuttered stores. That is because CVS imposes severe deed restrictions on many of its properties that can last for decades. Also known as ‘restrictive covenants,’ these deed restrictions are clauses written into property deeds that can prohibit a specific type of tenant – for example a rival drugstore chain -- from taking over a retail space once CVS decides to leave.
Deed restrictions caused enough problems that the Chicago City Council barred grocery stores and drug stores from using them. Their concern was “blight caused by stubbornly vacant retail parcels that were designed and best-suited for grocery and drugstores.” According to Peter Skosey, Vice President of External Relations for Chicago’s Metropolitan Planning Council, deed restrictions “rear their ugly heads only after stores go belly-up and close their doors forever, leaving surrounding neighborhoods ‘high and dry’ – stripped…of the legal right to attract similar retailers to the site, sometimes forever.”
CVS has used these clauses in cities from Las Vegas and Mesa, Ariz., to Independence, Mo., and Tampa, Fla. The restrictions can be so tight that they would exclude many kinds of retail stores from opening former CVS locations.
