Updates in 4th paragraph that Target now has 80 clinic locations in seven states.
At around $61, Walgreen shares are up 6% for the year to date. CVS stock, at around $79, is up nearly 11% for the same period. But the fight isn't just between these companies: Both are also feeling the heat of increasing competition from discount retailers Wal-Mart (WMT) and Target (TGT) .
Why? Because thanks to the Affordable Care Act there are now millions of consumers whose coverage for preventive care is now paid for by insurance. While the clinics don't replace the family doctor, they can be expected to draw those who need the services provided by the clinics' licensed nurse practitioners, including treating common minor ailments and offering some screenings and vaccinations, among others. That, in turn, drives traffic into the stores.
These clinics have been very successful for CVS, which has 836 of its "MinuteClinics" in 28 states and the District of Columbia. Walgreen, by contrast, has about 400 in 19 states. Wal-Mart has 102 clinics in 19 states. Target has over 80 locations in seven states, according to a company representative.
There's still plenty of room for growth for Walgreen, and the company has plans to add more clinics. "Although our current health care clinic business does not reach the level required to disclose its revenue, we intend to continue growing the business. We will open approximately 40 more clinics in the next 12 months," said Walgreen's spokesman Michael Polzin.
Recently, Walgreen released the results of a study that highlighted the dramatic increase in U.S. of patients relying on nurse practitioners at retail clinics to provide chronic and preventive health services, jumping to 17% in 2013 from 4% in 2007.
CVS still has nearly 90% of its locations without health clinics and Walgreen's more than 95%. Neither Wal-Mart nor Target have clinics in more than 100 of the many stores each entity operates.
CVS is winning the race for providing the most health care clinics in the U.S. with Walgreen a distant second. Currently only 33% of Americans live within 10 minutes of a Walgreen Healthcare Clinic, according to estimates provided by both the company and the Convenient Care Association.