• Walmart said Tuesday that it will start delivering prescriptions to customers' doorsteps.
• The discounter will start with six states, but plans to offer prescription delivery in 49 states by the end of January.
• Walmart's move comes as Walgreens and CVS shutter stores and try to turn around their struggling businesses.

As CVS and Walgreens shutter hundreds of stores nationwide to shore up profits and investor sentiment, Walmart said Tuesday that it is offering a new option for customers: Delivering prescriptions to their doorsteps.

The nation's largest retailer said deliveries are now available in six states: Arkansas, Missouri, New York, Nevada, South Carolina and Wisconsin. The company said in a news release that it expects to deliver prescriptions in 49 states by the end of January. Prescription deliveries will not be available in North Dakota due to state laws, Walmart said.

The prescription delivery service is another example of how Walmart is trying to outmatch competitors on convenience along with low prices. With the new service, customers can get a mix of items dropped off during the same delivery, such as a box of tissues, blanket or chicken noodle soup.

Walmart's new delivery offering could be another blow to drugstore chains, which are falling out of favor with consumers in a trend that has hit their profits and stock prices and forced them to reconsider their strategies. Still, it is unclear how much market share Walmart could win from CVS and Walgreens, both of which offer same-day, one-day and two-day prescription deliveries.

Tom Ward, chief e-commerce officer for Walmart U.S., said the company added pharmacy deliveries because of shopper demand.

"This is actually the number one service requested by our customers," he said.

He said Walmart tested the deliveries in several states and saw that customers took advantage of getting a mix of items, including the prescription, in a single delivery.

Walmart's delivery service will be available for new prescriptions and refills, the company said. It will cost $9.95 for a delivery, the standard price for Walmart doorstep deliveries, but will be free for members of Walmart+, the company's membership program.

Health insurance plans will be applied to the transaction, like they would in the store, the company said.

The deliveries will come with a few more safety steps than Walmart's other deliveries, the company said: Medications will be put into tamper-evident packaging. Customers can track orders in real time through Walmart's app or website and get a photo in the app or by email when the prescription is delivered. And when a customer orders a new prescription and chooses delivery, they are prompted to do a consultation with the pharmacy by phone.

Most of Walmart's annual revenue in the U.S. – nearly 60% – comes from groceries, but health and wellness is a growing category for the company, according to the retailer's most recent annual filing for the fiscal year that ended Jan. 31. Health and wellness accounts for about 12% of its annual revenue in the U.S. It includes pharmacy, over-the-counter drugs and other medical products, optical services and other clinical services.

A new challenge for drugstores

As of Monday's close, shares of Walmart were up around 54% for the year. Meanwhile, shares of CVS were down roughly 26% so far this year, while shares of Walgreens were down nearly 60%.

CVS is the top U.S. pharmacy in terms of prescription drug revenue, holding more than 25% of the market share in 2023, according to Statista data released in March. Walgreens trailed behind with nearly 15% of that share last year, while Walmart held just 5% of that share.

CVS and Walgreens are grappling with falling reimbursement rates for prescription drugs. Inflation, softer consumer spending and competition from Amazon, big-box retailers and grocery stores are making it difficult for them to turn a profit at the front of the store, which carries cleaning supplies, beauty products and pantry staples, among other items.

CVS CEO Karen Lynch left the company and was replaced by David Joyner last week, as CVS faces pressure from Wall Street and, more recently, an activist investor to turn around its business. On top of the leadership shakeup, CVS plans to cut $2 billion in expenses over several years. That includes slashing less than 1% of its workforce, or roughly 2,900 jobs, on the corporate side of its business.

The company is also wrapping up a three-year plan to close 900 of its stores, with 851 locations closed as of August.

Walgreens is similarly cutting costs, announcing last week that it will close roughly 1,200 stores over the next three years, which includes 500 in fiscal 2025 alone. The chain has around 8,700 locations in the U.S., a quarter of which it says are unprofitable.

Walmart has faced its own financial challenges on the health-care side of the business. The discounter planned to bring its low-price spin to health care by opening clinics that offered doctor, dentist and therapy appointments for less.

Yet in the spring, Walmart shuttered all of the clinics, saying in a news release at the time that it couldn't operate a profitable business because of "the challenging reimbursement environment and escalating operating costs."