The three major U.S. drugstore chains have benefited from their designation as essential retailers during the COVID-19 pandemic, and could stand to gain longer term as more consumers seek alternative settings for medical care.

While on Thursday Rite Aid joined rivals in reporting a boost from spending in recent months, it maintains a disadvantage compared to them. Both CVS and to a lesser extent Walgreens in recent years have moved to shore up their health care operations with many more clinics and expanded services. 

The strengths, weaknesses and potential all showed up in recent quarterly earnings reports. CVS Health, which two years ago acquired health insurer Aetna as part of its health care play, in its most recent quarter saw total revenue rise 8.3% to $66.8 billion (including proceeds from its Aetna insurance and health care benefits operations). Walgreens revenue rose 3.7% to $35.8 billion. And Rite Aid on Thursday said revenue rose 12.2% to $6.03 billion.

The health care opportunity is significant, according to UBS analysts. In a June 23 note on what they term the "consumerization of healthcare," the UBS team led by Michael Lasser called out clinics run by retailers, notably Walmart and CVS, as the reason they are among four key sectors poised to gain as consumers take firmer control of their medical care costs and options. Those retailers are among a group of "favorably positioned" companies that also include tech giants like Salesforce, Alphabet and Apple. Electronics retailer Best Buy is also in that mix, presumably thanks to its acquisition two years ago of health services company GreatCall.

Where all drugstores have struggled is in their retail operations, leading to losses in market share in categories like beauty that could be mainstays. Even with stores open these last few months, which did provide some benefit, front-of-store sales depended greatly on health- or wellness-related products. Still, the pandemic has been bringing shoppers to drugstores for other essentials and that did help bump front-of-store sales.

In the most recent quarter, CVS front-store revenues rose 8.5%, including an 8% increase in same store sales. That growth was "primarily due to strength in consumer health and general merchandise sales, which was primarily driven by COVID-19 related sales," the company said. Walgreens retail sales fell 0.3%, with store comps up 0.6%, "mostly due to strong growth in health and wellness, including a favorable cough, cold and flu season."

Excluding tobacco and e-cigarettes, a dubious segment for a retailer promoting health care, Walgreens store comps rose 1.9%. At Rite Aid, front-end same store sales, (excluding cigarettes and tobacco products,) rose 16%, "driven by increases in general cleaning products, sanitizers, wipes, paper products, liquor, over-the-counter products and summer seasonal items." The company, however, said it expanded its front-end market share by 270 basis points in both dollar and unit sales.

Overall, though, it's CVS that has emerged as a leader in the pandemic quarter, according to GlobalData Retail Managing Director Neil Saunders. The firm's research shows that the retailer's already high levels of trust when it comes to pharmacy and health "have risen quite significantly during the crisis," he said in emailed comments. 

That helped when people came in for everyday household essentials that were often out of stock at grocery stores and mass merchants, he said. But it's not clear that CVS, or its rivals, will capitalize on that momentum.

"Even though the stockpiling seen at the start of this crisis has abated, CVS will remain more of a destination as concerns about the coronavirus linger. This will have a positive knock-on effect to the retail part of the business," he said. "Longer term our view is less optimistic. CVS's retail proposition is still one focused on necessity rather than one focused on excellence. This is a shame and we believe that the benefits of this crisis should persuade CVS to up its game in retail. There is a significant opportunity there, if only CVS would work to seize it."