Walgreens Close To Buying Rite Aid

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Alpha8472
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Walgreens Close To Buying Rite Aid

Post by Alpha8472 » October 27th, 2015, 11:54 am

Bloomberg reports that Walgreens is close to buying Rite Aid. This is a tragedy as Rite Aid has been remodeling their stores into a very nice look. I would hate to see these stores made into ugly Walgreens stores. Walgreens is the highest priced drugstore. Rite Aid generally was lowest overall in my area. If Walgreens takes over it could mean the end of Thrifty Ice Cream counters and Thrifty Ice Cream once and for all.

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Re: Walgreens Close To Buying Rite Aid

Post by marshd1000 » October 27th, 2015, 3:23 pm

Here is what Chain Store Age says about it!

http://www.chainstoreage.com/article/re ... %2F27%2F15

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Re: Walgreens Close To Buying Rite Aid

Post by marshd1000 » October 27th, 2015, 3:34 pm

I hope the FTC makes them divest a bit of their stores. Here in Washington, Rite Aid is quite dominant and Walgreens is huge too. I see opportunity for CVS to greatly expand beyond the 3 stores it has here already. Bartell Drugs should take advantage of this and expand beyond the King, Pierce and Snohomish County markets. I don't want to see them do a Haggen, but they would probably do well to cover the I-5 corridor and Central Washington areas that are part of the Seattle television market. Nationally speaking, I wonder if Loblaws would want to expand Shopper's Drug Mart into the U.S.?

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Re: Walgreens Close To Buying Rite Aid

Post by Super S » October 27th, 2015, 6:19 pm

marshd1000 wrote:I hope the FTC makes them divest a bit of their stores. Here in Washington, Rite Aid is quite dominant and Walgreens is huge too. I see opportunity for CVS to greatly expand beyond the 3 stores it has here already. Bartell Drugs should take advantage of this and expand beyond the King, Pierce and Snohomish County markets. I don't want to see them do a Haggen, but they would probably do well to cover the I-5 corridor and Central Washington areas that are part of the Seattle television market. Nationally speaking, I wonder if Loblaws would want to expand Shopper's Drug Mart into the U.S.?
I will be surprised if there aren't some closures or divesting. If this goes through, Walgreens will end up being the only traditional drugstore left in many Pacific Northwest towns as there aren't many independents left where the chains operate. There are also areas where the older Rite Aid stores that were acquired from Thrifty/PayLess are very close to a much newer Walgreens and these could be among the first to go. Then again, this could get interesting as Rite Aid has been making a big effort to remodel their older stores here lately.

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Re: Walgreens Close To Buying Rite Aid

Post by steps » October 27th, 2015, 8:25 pm

If this does goes through, it will be inevitable, that Walgreens and CVS will battle to acquire each other in the future. I don't know of any major drug store chains besides Walgreens, Riteaid and CVS. Would the FTC even allow this acquisition since that would only leave 2 major drug store chains?

Mom and Pop stores have become increasing popular lately, this might cause a consumer revolt (maybe...)

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Re: Walgreens Close To Buying Rite Aid

Post by wnetmacman » October 27th, 2015, 8:37 pm

Apparently, it's now official. $17.2 Billion.

CNN Article

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Re: Walgreens Close To Buying Rite Aid

Post by reymann » October 27th, 2015, 8:58 pm

there will likely be a lot of closures looming in california because of this merger!! it will get walgreens into the central coast region for the first time.

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Re: Walgreens Close To Buying Rite Aid

Post by storewanderer » October 27th, 2015, 11:30 pm

This is so disappointing. I felt like the current Rite Aid management was doing all of the right things operationally and the company was finally showing some profitability.

I do not like Walgreens or CVS much; poor selection, usually poor specials, and not an interesting place to shop. Both have been cutting selection like crazy over the years and it is to the point where many grocers have a larger product mix on the drugstore categories. Rite Aid had far better selection, tended to have some better specials, and the stores in the west were much nicer than what Walgreens or CVS operates. I also felt Rite Aid has better service in its stores. I do think Rite Aid has some pretty beat up stores in the east and south that are a worse shopping experience than the typical modern Walgreens or CVS, though.

In past drugstore mergers, stores were not divested, but rather, prescription records were divested. I see no reason why it will be any different this time. I expect we will see Safeway/Albertsons purchase many of these pharmacies that need to be divested.

One I can think of immediately:

Susanville, CA has Walgreens freestanding just down the road from a Rite Aid/Safeway strip mall. The Safeway has no pharmacy.

Gardnerville, NV has a strip mall Rite Aid directly across the street from a freestanding Walgreens. Grass Valley, CA has a freestanding Rite Aid across from a freestanding Walgreens and there is also a Safeway at that intersection with no pharmacy (however the Safeway is in a center with CVS and I think there is a lease restriction against them having a pharmacy there). That Rite Aid is one of the busiest in the chain.

I also wonder what happens to Thrifty Ice Cream. Based on how Walgreens has handled its own ice cream brand which they used to promote fairly heavily (even though it wasn't even a very good product) up until 5-10 years ago, I have a bad feeling...

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Re: Walgreens Close To Buying Rite Aid

Post by wnetmacman » October 28th, 2015, 6:05 am

I'm not really confident that this will go through.

Rite Aid and Walgreens compete too closely in the Northeast, West and South. To me, there is way too much overlap to make this merger successful. Thousands of divestitures would be required, and to who? CVS would be the most likely target.

As far as the Thrifty Ice Cream; when Walgreens acquired Duane Reade, they pushed that brand out to the entire chain, so I don't see why that couldn't happen here. Rite Aid kept that on the west coast; during their K&B acquisition in Louisiana, they sold the K&B ice cream for a while, then killed it when Rite Aid stores there didn't keep up the same business as K&B ever did.

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Re: Walgreens Close To Buying Rite Aid

Post by Super S » October 28th, 2015, 9:49 am

http://www.retailwatchers.com/viewtopic.php?f=19&t=937

The timing of this is interesting in Vancouver, WA as Hi-School Pharmacy recently returned to one of the locations sold to Walgreens. There are a couple stores Walgreens still operates that are former Hi-School stores, one on Mill Plain which is directly across from a standalone Rite Aid built in the mid-90s, and another on 162nd Ave. just down the road from a newer standalone Rite Aid. Hi-School Pharmacy has hinted at possibly opening a few more locations.

As for the Portland area, there are numerous locations where Rite Aid operates in strip malls (former PayLess stores) that are very close to newer standalone Walgreens stores. I would expect the strip mall stores in close vicinity to be closed/sold.

But having two stores close together doesn't necessarily mean anything. I know of two cases in Southwest Washington where Albertsons and Safeway are still operating stores a mile or less apart after they merged. As well as Office Depot and OfficeMax. Maybe by keeping separate names on selected stores they can somehow get away with it.

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