Rite Aid's Future

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Re: Rite Aid's Future

Post by Super S »

Not far from my former house in Vancouver, WA, there was also a PayLess similar to the one I mentioned. It replaced an old store nearby, which is now a Bi-Mart. It had the pharmacy and photo departments up front. However, this one had straight aisles. Rite Aid never remodeled it and it closed a couple years ago with no replacement store. It is still vacant.

This same strip mall had other problems. Albertsons vacated a store they built here (which also relocated from the same shopping center as PayLess) and was less than ten years old and built a new store nearby on Padden Parkway. The old one became Jo-Ann Fabrics and Petco. Also, a Home Base sat vacant for many years before being demolished to build Sportsman's Warehouse.

Back to the topic at hand. The Rite Aid on Division is not far from another Rite Aid, also on Division, which I also assume to be a former PayLess as it is in a strip mall with Albertsons. Rite Aid has built a few new stores in the Portland area over the last few years, but they have done virtually nothing as far as updates with the former PayLess stores in Portland except replace a few signs.
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Re: Rite Aid's Future

Post by storewanderer »

The number of new Rite Aids in NorCal is getting more and more noticeable. I was in yet another of their new builds today in Cameron Park. I guess it opened sometime last year. Also, new build in Stockton is open now.

Meanwhile I was in a couple of the San Francisco former Rite Aids that are now Walgreens. Walgreens remodeled them inside but kept the Rite Aid shelves (gray) and the Rite Aid floors (the white/blue). Oddly, these are the best looking Walgreens Stores I've seen. They have Walgreens new decor, but I've seen that new decor on Walgreens standard white floor/beige shelf store and not thought much of it, and it really looked good with some added color on the floor and added color on the shelves.
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Re: Rite Aid's Future

Post by krogerclerk »

Rite Aid closed their Newnan, GA distribution center in September. The DC was and Eckerd DC. The Tuscaloosa(Cottondale), AL DC and the Charlotte, NC DC will primarily pick up the 194 stores that the GA DC service. Charlotte was and Eckerd DC and Cottondale was Harco Drugs old DC. Rite Aid's presence in Georgia prior to merging with Eckerds was spotty and sporadic and had waxed and waned. Over 40 Rite Aids, mostly former Eckerd Drugs have closed since 2006, and very few overlapped with Rite Aid. Most were poor performing stores devoid of customers.

Earlier in the year another former Eckerd DC closed, Bohemia, NY. Its functions were split between the Philadelphia DC and Rome, NY DC. This was an area that had a great deal of overlap between Rite Aid and Eckerd(including former banners Fay, Genovese, and Thrift).

Most of the 117 stores that are to close throughout this year are scattered across the companies operating area with the exception of the 7 San Francisco and 5 Idaho stores that were sold to Walgreens. The chain is virtually gone from Nevada with only one store in Gardnerville, but could return as CVS integrates Longs and the ensuing fallout occurs with store closings, though it would be in Northern Nevada and not to Las Vegas.

Wall Street continues to punish Rite Aid IMO for the previous regimes problems and mistakes that resulted in 3 former executives being indicted for securities and financial fraud early in this decade. Much of the current corporate leadership includes Brooks Eckerd and Jean Coutu Group executives with no connection to the previous leadership. The newest store prototypes are more appealing than CVS and Walgreens and overall the chain is price competitive with both chains in the pharmacy, OTC and HBC, but higher than the discount chains and most grocery pharmacies which have adopted $4 30 day and $10 90 day generics in response to Walmart.

Criticisms to the company include the elimination of well know banners such as Eckerd, Brooks, Thrifty and Payless. The Thrifty Payless chain was acquired over 10 years ago and successfully integratedwhile Eckerd was in decline at the purchase and Brooks was geographically limited to New England and parts of Upstate New York. Eckerd itself had eliminated banner after it was purchased by JCPenney and consolidated with Treasury, Thrift, Fay's and Genovese Drugs in the 90's. Perry's, Harco and K&B Drugs were successfully integrated into Rite in the 90's. The biggest hurdle with integrating Eckerd is the overlap in the MidAtlantic states, especially Pennsylvania as Rite Aid originated near Scranton, Thrift in Pittsburgh and one of the Eckerd chains in Erie.
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Re: Rite Aid's Future

Post by Super S »

What Rite Aid stores in Idaho were sold to Walgreens?
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Re: Rite Aid's Future

Post by storewanderer »

Burley, Pocatello, Twin Falls, Idaho Falls... I believe. I don't know which ones Walgreens kept open. I think Burley was kept open for sure while Twin Falls was closed.
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Re: Rite Aid's Future

Post by Alpha8472 »

I was at a Rite Aid in Walnut Creek today. It was doing much better business than I have ever seen. This city is Longs' former hometown, and it seems like people are avoiding CVS. They had to call in more cashiers to handle the customers. I did see the metal shelves with gourmet and organic food products. It is very much like what you used to be able to find at Longs. Rite Aid is certainly gaining more customers due to the loss of Longs.
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Re: Rite Aid's Future

Post by krogerclerk »

The sale of the stores in SF to Walgreens seems inconsistent with their presence around the Bay and NorCal. I know that SF is making it increasingly expensive for chains to do business within the city and given the cash strapped position of RAD, I think that may have been the reason for the sale rather than poor performing stores. It looks like Safeway and Walgreens are the only chains willing to pay the price to comply with the cities ordinances and business fees.
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Re: Rite Aid's Future

Post by steps »

New Rite-Aid article...and it's not a positive one!

From Yahoo! Finance:

"Things haven't been right at Rite Aid (NYSE: RAD) in quite a long time. Rite Aid's biggest problem is that the drug store giant just doesn't make money. Rite Aid has been losing money and is expected to have negative earnings for the foreseeable future. Add in that Rite Aid has only $150 million in cash and more than $6 billion dollars in debt and you can see why the outlook isn't so rosy.

The ill-advised Brooks Eckerd acquisition has buried the company under a mountain of debt. Rite Aid has seen its same store sales decline for nine consecutive months. With Walgreens, CVS and Wal-mart all competing for pharmaceutical sales, it doesn't appear that there is any viable plan that can save Rite Aid."


The only choices I see for Rite-Aid is either sell to a comptetitor (SuperValu would be the best canidate since they have pharmacy experience and could bring back the Thrifty name and Sav-on) or to close down completely. I haven't gone much into a Rite-Aid since they took over Thrifty's. Rite-Aid is/was trying to make their name a "brand" but it doesn't work. They are doing what Macy's did and getting rid of historic brands to replace with their own.
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Re: Rite Aid's Future

Post by submariner »

steps wrote:... (SuperValu would be the best canidate since they have pharmacy experience and could bring back the Thrifty name and Sav-on)...
Tough choice... What do you bring back to Southern California? Sav•On or Thrifty?

I'd like to see both, perhaps SV could keep Sav•On for the grocery branding and Thrifty as the standalone operation?
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Re: Rite Aid's Future

Post by storewanderer »

Although I think Rite Aid is dead chain walking at this point (yeah,I've given up on them), SuperValu doesn't seem to be in the position to buy anything. SuperValu's operating results are terrible, they are selling stuff off right and left (it seems anything that someone wants to buy is for sale), and the new CEO has expressed NO interest in any retail stores other than the Save a Lot format.

Frankly, I think the likelihood of Rite Aid somehow getting to stay in business itself is greater than the chances of SuperValu buying a few hundred or so (or more, or less) Rite Aids and getting back into the freestanding drug business.

SuperValu has also killed the old infrastructure of Osco/Sav-On which was still in use back in Chicago at the Jewel/Osco Stores. They have also eliminated the Osco director position. There are rumors the Osco signage will soon be removed from storefronts and ads.
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