I've been trying to figure out of if I think CVS is a well-run company or not. Mainly because since CVS is so ubiquitous that I visit one every day or two. (For the record, there are 7,200 CVS retail outlets in the U.S. and last year, CVS Caremark had $96.4 billion in net revenue.)
I've noticed that they have been buying progressively smaller plastic bags over the last several months. These bags are seriously so small that they're barely functional. But maybe that's a sign that CVS is saving money this way and that's smart. And certainly, they're not paying a penny more for labor than they have to. The workers at the CVS near my apartment have to be the slowest, most incompetent retail employees I have ever encountered. Again, maybe that's a sign they're holding their costs down appropriately. It's not like the terrible service stops me from going there.
I did a bit of Googlework on the company, and here's what I found out. From their last annual report: in 2010, CVS shares returned 7.9% to shareholders, vs. a 12.8% return average for the S&P 500. So, not a great return. In their annual report, the letter from the CEO and president say that that result is "unacceptable." On the other hand, they led the industry in same-store sales growth in 2010 (+2.1%)
On a sidenote, I always think it's interesting to compare pharmacies in the U.S. vs. pharmacies in Canada. In the U.S., pharmacies like CVS seem to have expanded to compete against convenience stores like 7-Eleven. The Canadian pharmacy chains, like Shoppers Drug Mart or London Drugs, followed a different model. They have a more upscale feel than U.S. pharmacies - SDM usually has a perfume counter, like at a department store, and London drug sells high-end electronics.
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