retail news in context, analysis with attitude

USA Today reports that the first CVS Pharmacy stores inside Targets are scheduled to open today in the Charlotte, NC, area, the first of "Target’s 1,672 pharmacies in 47 states (that) will be rebranded as CVS Pharmacy within six to eight months as CVS-funded renovations are gradually completed."

For retailers, the story says, "the store-within-a-store concept is enticing because it can generate extra foot traffic for the lessee - Target, in this case - and extra revenue for the lessor. But there are also risks when competitors tie the knot. Loyal customers may defect  or one or both brand identities can get muddied."

Target CEO Brian Cornell says that "Target customers will benefit from access to CVS drugs and clinical services while 'at the same time it allows us to free up our resources' to focus on 'signature categories' such as groceries, baby items and home goods." And while CVS will lose sales of candy, makeup and greeting cards to Target, it believes it can make up the difference on increased pharmacy sales.
KC's View:
I'm not sure how the economics will work out in the long run, but I think these seems like an eminently sensible partnership from a consumer point of view. I'm not sure how much credibility Target has in the pharmacy area, and CVS can only improve it.