ST. LOUIS (KMOX) -- Schnucks made the first call, hoping to strike a deal to get out of the pharmacy business. Tuesday, the locally-based grocer announced it would sell to a big national competitor.
CVS is buying all 110 of Schnucks' in-store pharmacies and will operate 99 of them under the CVS brand. The remaining 11 locations will have their records transferred to a nearby CVS.
In the St. Louis metro, only the Kirkwood location's pharmacy will close.
"This transaction is really the best of both worlds for us," Chairman and CEO Todd Schnuck tells KMOX News.
This is the second time CVS has purchased in-store pharmacies from a big retailer. CVS purchased 1,672 pharmacies from Target in 2015 and now operates inside Target stores.
Schnuck says they looked to get out of pharmacy because of industry changes. He says they called CVS because of its track record with the Target transaction.
KMOX asked about Kroger, the nation's largest grocery chain, facing investor pressure over falling margins on its pharmacy side.
"As Kroger pointed out, we wanted to make sure that we kept that customer traffic in our stores and we feel we have done that with this arrangement," Schnuck says.
The deal means Schnucks gets to keep a pharmacy offering to draw people inside the building, but can focus resources more fully on the company's core business selling food.
It "allows us to focus on our future, and we think our future is bright."
Both retailers have eliminated tobacco products in their stores.
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Schnucks-employed pharmacists will have to re-apply for their positions under CVS.
"We see it as a great career opportunity for them to potentially be working for one of the premiere pharmacy retailers in the country," Schnuck says.
United Food and Commercial Workers Local 655 represents about 700 pharmacy technicians that will be directly impacted by the purchase.
Local 655 President David Cook says the union has reached out to representatives of CVS for a meeting. He hopes CVS will want to keep "the high-quality health insurance union members currently have."
Terms of the deal weren't disclosed, but Schnucks CEO was asked by KMOX about his company's plans for the capital this will bring in.
"It will provide some additional funds," Schnuck says. "We will probably remodel over the next three years 40 to 45 stores," adding they'll also continue to invest in digital infrastructure, including rewards and delivery.
Schnuck says CVS will only operate the pharmacy counter itself, and Schnucks will continue to stock health and beauty aisles with its own brands.
Customers won't be able to use the Schnucks app to order prescriptions or earn rewards. Instead, they'll have to download the CVS app.
Schnuck says: "What won't change is it's the same individuals they've come to know and trust. I can't say enough about the quality of our pharmacy teammates. I think that's frankly one of the reasons why CVS was interested."
No word on the length of the receipts.
