In the 2000s, the growing ubiquity of bank branches was one of America’s great retailing puzzles. Online banking was on the rise and the industry was consolidating, but branches kept popping up seemingly everywhere — if you define “everywhere” as the reasonably affluent parts of cities and suburbs.
That ended with the financial crisis. The number of bank branches in the US has fallen 12% since
2009 even as the population has grown 8%.
The growing ubiquity of chain drugstores during the same period was less of a puzzle. An aging US population meant more prescriptions to fill, plus the major drugstore chains were buying smaller competitors and expanding into new areas of healthcare provision. But that boom seems to have ended now, too, with the number of locations for the three biggest chains down 6% since 2017.
“Big Three” is a little misleading, since grocer Kroger Co has almost as many in-store pharmacies as Rite Aid has drugstores, and Walmart Inc significantly more. But neither Kroger nor Walmart has been increasing its US store numbers either, and with CVS Health Corp just announcing plans to close 900 US drugstores over the next three years and Walgreens Boots Alliance Inc in a store-closing mood as well, it does look like we’ve passed peak chain drugstore in the US.
Given how much complaining there used to be about the surfeit of banks and drugstores, at least here in New York City, you’d think people would be celebrating in the streets. Instead, they’re complaining about the rapid-delivery grocery startups that have been gobbling up retail space lately. There’s also legitimate concern that places that never really saw the boom — rural areas and poorer parts of cities — are going to end up even more deprived of the products and services that banks and drugstores provide. While most of these can be provided digitally for banks, and most drugstore products can at least be ordered online, older and poorer consumers are less able to avail themselves of those options.
With banking there seems to be a pretty obvious policy response: allow some form of postal banking, which Bloomberg’s Editorial Board has endorsed from time to time. The banking industry has consistently fought against this, but as banks keep shuttering branches this opposition seems less and less tenable. With drugstores, it’s not so clear that retrenchment by the chains will mean less availability. The number of independent pharmacies in the US actually grew from 20,427 in 2010 to 23,061 in 2019, more than making up for the slight decline in the number of chain pharmacies (from 39,156 to 39,084) over that period.