CVS 2001 Annual Report Download - page 11

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When we relo cate a sto re from an inline sho pping
center to a freestanding co rner lo catio n, the new
sto re usually generates sig nificantly higher sales,
impro ved margins and a better return o n invested
capital than the sto re it replaces.
In 2001, we o pened 248 new and relo cated
sto res. Our net new sto re growth in 2001 to taled
58 sto res, fo r an increase in square fo o tage of
approximately 2% .
Fo r 2002, we plan to o pen 250-275 new o r
relo cated CVS/ pharmacies. At year-end 2001,
approximately 43% o f o ur stores were in freestanding
lo catio ns. Our lo ng-term go al remains to have 70-80%
of o ur stores in freestanding / co nvenient lo catio ns
with drive- thru pharmacies.
We also anno unced we will clo se 229 sto res in
early 2002 where we identified no relo catio n o ption
and limited lo ng- term growth po tential. Mo st of these
sto res became part o f CVS with the 1997 acquisitio n
of Revco . The clo sing o f these lo w-vo lume stores will
elevate the quality of o ur store base and sho uld help
to impro ve o ur same-sto re sales perfo rmance.
Location, Locat ion, Locat ion
The selec tio n of sto re lo catio ns is no simple
task. Our CVS Realty team uses a so phisticated
analytical pro cess that leverages extensive market
research and pro prietary CVS software systems to
identify the prime lo catio ns, right do wn to an
exact co rner o f a given intersectio n.
We use statistical and in-field research, as well
as spatial mo deling, to identify demo graphic and
o ther facto rs that drive custo mer traffic to o ur
sto res. Thus, when we o pen a new sto re o r enter a
new market, we do so with great co nfidence in the
po tential return o n invested capital o ver the
lo ng term.
Our real estate expansio n strateg y—entering new
markets, o pening new sto res in existing markets, and
relo cating sto res to mo re co nvenient lo catio ns—will
co ntinue to be an impo rtant part of o ur lo ng- term
gro wth plan.
Estate Expansion
2001 Annual Report
9
new markets, such as Flo rida, Chicago and Texas, are exceeding o ur expectatio ns.