Fred's Super Dollar Possible Sale To CVS, Walgreens, Etc.

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Alpha8472
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Fred's Super Dollar Possible Sale To CVS, Walgreens, Etc.

Post by Alpha8472 »

Fred's Super Dollar, a Southeastern dollar store chain, is possibly going to be bid on by CVS, Walgreens, Dollar General, or a private equity firm. The chain not only has dollar stores, but also pharmacies in their stores. This is a strange combination as most dollar stores do not have pharmacies. Dollar stores are small and could be converted easily to drug stores like CVS or Walgreens. The pharmacies inside are also very lucrative and CVS and Walgreens would love to get their hands on these pharmacies.

I don't see Dollar General as being a likely bidder as Dollar General does not want to deal with pharmacies.

It seems like pharmacies are all the rage now. Supermarkets are adding pharmacies and even Walmart is opening small supermarkets that all have pharmacies.

I don't know how CVS or Walgreens would go about running a dollar store. CVS and Walgreens are all about high priced convenience store style items. A dollar store would simply blow their minds. They would probably convert the dollar stores to regular drug stores.
storewanderer
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Re: Fred's Super Dollar Possible Sale To CVS, Walgreens, Etc

Post by storewanderer »

Fred's is more like a west coast drug store. More like a Longs, but lower end. Think Thrifty of 1990. Maybe a little lower end still, but you get the idea.

From what I saw, pricing and merchandising was pretty weak.

Rite Aid would be a better fit than CVS or Walgreens.
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Re: Fred's Super Dollar Possible Sale To CVS, Walgreens, Etc

Post by Alpha8472 »

Speaking of Rite Aid and somewhat dollar-type stores, what ever happened to those Save-A-Lot Rite Aid stores? I think they are still in operation. Rite Aid hasn't rolled out the concept to any other area.

https://save-a-lot.riteaid.com/

Apparently, they are doing enough business to stay open, but it is a not a big money maker for Rite Aid. I actually thought that it would be a good idea for a while. The Save-A-Lot portion of the store would bring in the customers and the pharmacy would get more business from increased customer traffic. However, it turned out that pharmacy sales remained about the same and the Save-A-Lot side wasn't that great of a source of profit. Customer counts increased, but food isn't that profitable compared to over the counter medications.
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Re: Fred's Super Dollar Possible Sale To CVS, Walgreens, Etc

Post by wnetmacman »

Okay, here's my take on this:

I don't see Dollar General (or Family Dollar) being successful in a bid for Fred's on any level. There is just way too much overlap. And they do almost the same thing, minus the pharmacies. If either want a piece of that business, then they could buy Fred's for that. I don't believe the FTC would allow it otherwise.

CVS and Walgreens are pretty much Fred's stores, except that Fred's has become, for lack of a better word, cheap. Very few name brands outside the food section, and not a whole lot there. And customer service is non-existent.

For Fred's to continue as a going concern, they need two things: money, and someone in charge who sees the problems in the stores, and is willing to spend the money to fix them.

I've watched Fred's fall into this hole. We had a new store open in my town in 2010 to much fanfare and celebration. The pharmacy is their shining light; I don't see how the stores without one can operate. There is another store close by in a former K&B/Rite Aid. As is my understanding, there is a deed restriction on that store that does not allow any tenant to operate a pharmacy (because Rite Aid still operates in the town, just not that store). That's a problem; Fred's growth has been through expansions only; same store sales aren't that great.

I'd like to see them continue, but I'm wary of the ability in their current state to do so.
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