Howdy folks, Happy New Year, and welcome back to HHR! Today, we have something brand new: the beginning of a CVS experiment in Houston. The skinny on this “CVS Diet” is that it appears to be the first of many planned conversions of CVS stores into Oak Street Health Clinics. The plan’s start in Houston is coincidental, as Walgreens began a similar experiment here in 2019. However, Walgreen’s commitment to the area was more tied to their partner, Village Medical, being based out of Houston (specifically the Memorial Villages area). While this may be a coincidence, the only other CVS in Texas currently set for this conversion is in Arlington, down the street from another Walgreens/Village Medical clinic. Unlike Walgreens, however, it seems that CVS has jumped immediately to the conclusion of dumping everything except for the pharmacy. While Walgreens is testing this out in Houston, their small format stores do not include Village Medical locations. It’s also worth adding that in the case of Village Medical, Walgreens was a minority owner of the company before 2022, when they upped it to a 63% stake. It stands to reason that, at least in some lights, Village Medical is simply a tenant for Walgreens and a way to replace the photo counter and shrink underperforming GM sections. CVS, on the other hand, purchased Oak Street Health outright in early 2023. The remodel of the store, focusing on the clinic and pharmacy, essentially turned this property from a piece of retail into a healthcare facility that just happens to feature a drive-thru pharmacy. CVS is obviously taking this a bit slower than Walgreens did, and with good reason.
In October 2023, months after this conversion work had begun, Walgreens announced that they would be shuttering 60 Village Medical locations within the next few months. The announcement was somewhat surprising as Village Medical seemed to be quite promising for a company that had trouble operating its own in-store clinics. While it’s unlikely that the same fate will befall the Oak Street Health buildings, there are some things to consider. The Oak Street Health Clinics are intended to be primary care offices for seniors and specifically look to work with patients using Medicare. Looking for customers in this specific demographic is not unwise, as they exist, but it limits where CVS can make these conversions work. In areas like Midtown, where CVS recently closed a store that is slated to become a Dollar Tree. Or Sugar Land, where a former store has been sold to Family Dollar. At this point, it’s anyone’s guess as to how these conversions will go over. In 2019, CVS announced they were transitioning to a “full-service healthcare company.” Purchasing insurance provider Aetna and now Oak Street Health shows that they’re following through with that commitment. While some analysts say it’s not impossible, we’ll see CVS-branded hospitals in the future, and this clinic will provide a good insight as to where CVS is headed, at least in the immediate future.
Woah, that is bizarre to see an early-2000’s CVS converted to a clinic! Ironically, I saw a 60 or 90 second ad slot on TV this week touting the Oak Street Health Clinics, but I had no idea the company was owned by CVS. I guess they have plans to move into Georgia as well!
This seems like a really odd choice of locations. The HCA Northwest Medical Center is literally two miles away from it. That is an extensive complex with several clinics, two mid-rise MOBs and a full-service hospital with multiple bed floors. I assume CVS has some demographic data pinpointing this as the ideal location, but I certainly wouldn’t have guessed it based upon my personal and professional knowledge of the area. Then again, maybe they don’t; big corporations do boneheaded things all the time. That’s why I left Corporate America: I couldn’t tolerate the stupid any longer.
Happy New Year!
This is a CVS I’ve been to a few times over the years. In fact, either this one or the one on Hwy. 6 and Huffmeister was probably the first CVS I ever went to. It is a bit of a shame that this one was converted to a pharmacy-only location given that the Huffmeister & Cypress N Houston CVSerd closed not too long ago. There are a couple of other full CVSes around here, but those and full Walgreens are certainly not as plentiful as they once were. I can’t say I’m surprised, it did feel like these things were overbuilt in the 2000s.
The funny thing is the then-brand new Eckerd just down the street from this CVS at FM 1960 W & N. Eldridge closed when CVS bought Eckerd’s operations down here due to the two stores being so close. Now, there is a mini-Walgreens operating out of that Eckerd and now this mini-CVS. I reckon there is a mini-CVS in the Target across from the mini-Walgreens as well, but I’ve never actually been that Target so I can’t say for sure.
There are plenty of medical clinics near that part of FM 1960 W so I don’t know if this clinic will be successful. Maybe CVS paying AARP to use their logo will convince (I’m really wanting to use a different word here, lol) enough seniors to make this a viable experiment, but we’ll see. I suppose this isn’t as strange as the La Michoacana medical clinics in this area!