CVS 2000 Annual Report Download - page 13

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result, when we open a new store or enter a new
market, we can be confident in the potential of the
investments we are making and their ability to
deliver an attractive return on invested capital over
the long term.
We remain committed to carefully controlled
and managed growth and, in that regard, the vast
majority of new market stores will be delivered
through our highly successful preferred developer
program.These arrangements afford us maximum
flexibility and have greatly mitigated occupancy
costs, as the pricing of these transactions reflects
our superior credit worthiness.
We currently operate stores in 59 of the top 100
U.S. markets. In 34 of those markets, we are the #1
drugstore chain.The 41 top markets we are not in
represent enormous untapped potential for two
reasons: their populations are growing and they are
underserved. In 2001, we expect more than one third
of all new CVS stores will be in new markets. Our
growth plan is structured to allow us to achieve this
goal while sustaining strong earnings growth.
New High-Growth Markets
In 2000, we entered four new markets: Chicago,
Illinois; Grand Rapids, Michigan; and Tampa and
Orlando, Florida. Chicago is the 2nd largest drugstore
market in the U.S., and our expansion here supports
our strategy to grow in high-quality markets with
substantial potential. Our early results suggest that
these stores will exceed our expectations.
We also launched an aggressive growth initiative
in Florida. During 2000, we opened stores in Tampa,
the 16th largest market in the U.S., and in Orlando,
the 27th largest market, and we have plans to enter
Fort Lauderdale, the 23rd largest market, in 2001.
These are especially promising markets for CVS; the
population in these Florida locations is expected to
grow at a rate three times that of the population in
our most successful markets. Our strong name recog-
nition precedes us among thousands of people who
have migrated to Florida from northern cities where
CVS already has a strong presence.
Our entry into the Grand Rapids market was a
Through sophisticated analysis, CVS is able to pinpoint prime locations for new stores, such as our new
store in Orlando pictured below, which will deliver attractive returns on invested capital over the long term.