Walgreens Close To Buying Rite Aid

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Re: Walgreens Close To Buying Rite Aid

Post by pseudo3d » June 30th, 2017, 8:43 am

wnetmacman wrote:Interesting that they're only keeping 4 of the 52 stores in Louisiana. All of these stores (or their immediate predecessors) were purchased 20 years ago from K&B out of New Orleans. K&B had over 100 locations when they were bought out, and Rite Aid slowly killed them off one by one. Many of these stores were the old locations, with the purple-tinted paneling and purple trim, along with the terazzo flooring. When Rite Aid took them over, New Orleans treated it like the end of life.

There is still a term for one aspect of K&B even 20 years later: K&B Purple. At the outset, when K&B was still Katz & Besthoff, they got a shipment of purple paper cheap to wrap items in for delivery. It caught on, so they kept it. All the stores and even their logo were colored with it, and it stuck.

In some aspects, I'm sad to see them go, but in others, they badly tarnished the reputation that K&B had built. I live in Lafayette; when I moved here in 2000, there were 6 Rite Aid stores and 2 Walgreens. Now, there are 9 Walgreens, and the 2 remaining Rite Aid stores may soon become Walgreens, as both are just out of the way from a competing Walgreens store. One closed about 6 months ago across the street from a popular Walgreens. I kind of figured out the strategy then.


It's going to be surreal seeing former Eckerd stores in Louisiana operating not as CVS like the ones in Texas are, but as Walgreens.

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Re: Walgreens Close To Buying Rite Aid

Post by wnetmacman » June 30th, 2017, 1:00 pm

pseudo3d wrote:
wnetmacman wrote:Interesting that they're only keeping 4 of the 52 stores in Louisiana. All of these stores (or their immediate predecessors) were purchased 20 years ago from K&B out of New Orleans. K&B had over 100 locations when they were bought out, and Rite Aid slowly killed them off one by one. Many of these stores were the old locations, with the purple-tinted paneling and purple trim, along with the terazzo flooring. When Rite Aid took them over, New Orleans treated it like the end of life.

There is still a term for one aspect of K&B even 20 years later: K&B Purple. At the outset, when K&B was still Katz & Besthoff, they got a shipment of purple paper cheap to wrap items in for delivery. It caught on, so they kept it. All the stores and even their logo were colored with it, and it stuck.

In some aspects, I'm sad to see them go, but in others, they badly tarnished the reputation that K&B had built. I live in Lafayette; when I moved here in 2000, there were 6 Rite Aid stores and 2 Walgreens. Now, there are 9 Walgreens, and the 2 remaining Rite Aid stores may soon become Walgreens, as both are just out of the way from a competing Walgreens store. One closed about 6 months ago across the street from a popular Walgreens. I kind of figured out the strategy then.


It's going to be surreal seeing former Eckerd stores in Louisiana operating not as CVS like the ones in Texas are, but as Walgreens.


No, because none of the Rite Aid stores here were ever Eckerd. All the former Eckerd stores here converted to CVS in 2005, just like Texas, Oklahoma, Mississippi, Alabama, Georgia and Florida.

Former Eckerd-turned CVS in Lafayette, LA
Another Eckerd-turned CVS in Lafayette, LA

It will be odd seeing former K&B stores with a Walgreens sign on them.

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Re: Walgreens Close To Buying Rite Aid

Post by pseudo3d » June 30th, 2017, 1:58 pm

wnetmacman wrote:
pseudo3d wrote:
wnetmacman wrote:Interesting that they're only keeping 4 of the 52 stores in Louisiana. All of these stores (or their immediate predecessors) were purchased 20 years ago from K&B out of New Orleans. K&B had over 100 locations when they were bought out, and Rite Aid slowly killed them off one by one. Many of these stores were the old locations, with the purple-tinted paneling and purple trim, along with the terazzo flooring. When Rite Aid took them over, New Orleans treated it like the end of life.

There is still a term for one aspect of K&B even 20 years later: K&B Purple. At the outset, when K&B was still Katz & Besthoff, they got a shipment of purple paper cheap to wrap items in for delivery. It caught on, so they kept it. All the stores and even their logo were colored with it, and it stuck.

In some aspects, I'm sad to see them go, but in others, they badly tarnished the reputation that K&B had built. I live in Lafayette; when I moved here in 2000, there were 6 Rite Aid stores and 2 Walgreens. Now, there are 9 Walgreens, and the 2 remaining Rite Aid stores may soon become Walgreens, as both are just out of the way from a competing Walgreens store. One closed about 6 months ago across the street from a popular Walgreens. I kind of figured out the strategy then.


It's going to be surreal seeing former Eckerd stores in Louisiana operating not as CVS like the ones in Texas are, but as Walgreens.


No, because none of the Rite Aid stores here were ever Eckerd. All the former Eckerd stores here converted to CVS in 2005, just like Texas, Oklahoma, Mississippi, Alabama, Georgia and Florida.

Former Eckerd-turned CVS in Lafayette, LA
Another Eckerd-turned CVS in Lafayette, LA

It will be odd seeing former K&B stores with a Walgreens sign on them.


I distinctly remember driving around Baton Rouge in 2007 and seeing banners promising that Eckerd would convert into Rite Aid, but upon second thought I knew I was also in New Jersey that year, so maybe I'm thinking Baton Rouge but actually NJ. I scanned through old Eckerd locations in Baton Rouge and found some Eckerd buildings that are CVS now, so maybe it was NJ all along. Shucks.

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Re: Walgreens Close To Buying Rite Aid

Post by wnetmacman » June 30th, 2017, 2:13 pm

pseudo3d wrote:I distinctly remember driving around Baton Rouge in 2007 and seeing banners promising that Eckerd would convert into Rite Aid, but upon second thought I knew I was also in New Jersey that year, so maybe I'm thinking Baton Rouge but actually NJ. I scanned through old Eckerd locations in Baton Rouge and found some Eckerd buildings that are CVS now, so maybe it was NJ all along. Shucks.


Yeah, because by 2007, Eckerd had been gone from Louisiana for two years. CVS converted the stores quickly, removing everything that even remotely appeared Eckerd-like. It wasn't as unpopular as the change from K&B to Rite Aid, however, as CVS continues to add stores here.

When I moved to Lafayette in 2000, there were 7 total Eckerd stores:
    Moss at Willow
    Moss at Pont Des Mouton
    Cameron near University
    Scott
    Johnston at Camellia
    Kaliste Saloom, near Martial
    Pinhook at Southpark

There were 6 Rite Aid stores:
    Northgate Mall
    Congress at Theater
    Pinhook at Kaliste Saloom
    Johnston, near the mall
    Ambassador Caffrey at Kaliste Saloom
    Ambassador Caffrey at Dulles

And there were two Walgreens:
    Johnston at S. College
    Moss at Pont Des Mouton

Now we have the following. First CVS (* denotes true former Eckerd):
    Moss at Willow*
    Moss at Pont Des Mouton*
    Congress at Bertrand (replacement for Cameron near University)
    Scott (relocated across street)
    Johston at Camellia*
    Kaliste Saloom at Camellia (Camellia was extended, and the store moved across from the old Kaliste Saloom store)
    Pinhook at Southpark (relocated from a shopping center next door)
    Johnston at E. Broussard Road
    Pinhook at Bendel
    Youngsville

Rite Aid:
    Johnston, near the mall
    Ambassador at Dulles

Walgreens:
    Johnston at S. College
    Moss at Pont Des Mouton
    Ambassador at Kaliste Saloom
    Kaliste Saloom at Pinhook
    Ambassador at Congress
    Carencro
    Scott
    Youngsville
    Broussard

So, if you read these lists correctly, Walgreens and CVS are winning the area more than Rite Aid. It's a good decision for WBA and RAD, but it could hurt CVS

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Re: Walgreens Close To Buying Rite Aid

Post by BillyGr » June 30th, 2017, 5:45 pm

One other thing with the states they are keeping stores vs. selling them - you'll notice many of the states where most are being sold are further south (excepting the couple New England states) and those where they are keeping more stores are north (MI, NY, PA, NJ, DE for instance).

This seems to be the opposite of the Fred's chain (where they have stores in the south but not up north) - perhaps they are keeping open an option for the future to still somehow combine the two (however that might work - could be either buying the other, at that point)?

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Re: Walgreens Close To Buying Rite Aid

Post by storewanderer » July 1st, 2017, 12:33 am

Fred's is not much of an asset. They have a number of no pharmacy stores. Their product mix does not have near the depth of a normal drug store chain. More like a Big Lots with a pharmacy.

I don't see Rite Aid merging with Fred's. First, that would create more debt. Second, it would add money losing operations to their mix. Third, it would give them a thin penetration of stores in markets they just exited. If they were interested in Fred's, it would have made sense for them to keep the stores in the South, not sell them. The average Fred's does even less volume than the average Rite Aid right now. This new Rite Aid needs to continue with store remodels, start to open a few more new stores in their remaining markets, and focus even harder on execution.

I think the new smaller Rite Aid is going to surprise some people, especially analysts and Wall Street, who think Walgreens has the upper hand with this deal and cherry picked the best stores. Based on what I know of the stores, I am sure Walgreens got lots of good stores, but they also got hundreds of total dog stores which I am very surprised they wanted. Add to that Walgreens is having serious operational challenges of their own right now in the stores with lower volume units cutting thousands of SKUs, running on skeleton crews, cutting out cleaning/groundskeeping services, removing endcaps from the back aisle, etc. and the Walgreens today does not look nearly as healthy as the one two years ago did, based on how the stores look. Maybe the financials tell a different story but usually what happens in the stores eventually plays out in the financials too.

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Re: Walgreens Close To Buying Rite Aid

Post by timanny » July 4th, 2017, 8:39 am

Obviously they won't do this, but with the new Rite Aids being clustered on the coasts and nothing in between, might as well change the California stores back to Thrifty. The name recognition is still there, and it might be a boon to business.

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Re: Walgreens Close To Buying Rite Aid

Post by storewanderer » July 4th, 2017, 1:23 pm

At least they are marketing the Thrifty Ice Cream a little more than they once did. On recent remodels in California, it shows up on exterior signage.

Out in Burney, CA they also installed a small Thrifty Ice Cream logo onto the roadside sign.

Walgreens was not the right fit for rural stores like this. My observation of Walgreens in rural Nevada, rural Kansas, and rural NorCal is their stores perform very poorly. They are cold and sterile and do not seem to fit these communities. Their prices are too high. Not offering liquor when they opened also probably did not help. They do things like post 30 minute parking limit signs in the parking lot which are cold and unfriendly and do not belong in a rural community.

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Re: Walgreens Close To Buying Rite Aid

Post by CalItalian » July 6th, 2017, 9:02 am

timanny wrote:Obviously they won't do this, but with the new Rite Aids being clustered on the coasts and nothing in between, might as well change the California stores back to Thrifty. The name recognition is still there, and it might be a boon to business.
Thrifty has been gone for 20 years. That's an entire generation plus that has no clue what a Thrifty is. Makes no more sense than Albertsons returning the store names to Lucky which for Save Mart hasn't helped at all.

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Re: Walgreens Close To Buying Rite Aid

Post by storewanderer » July 6th, 2017, 10:45 pm

What is funny to me is these "Wellness" remodel Rite Aids are a lot like a Thrifty. The difference is they are cleaner and seem to have better product selection in core categories such as vitamins and personal care. They are about the size of a Thrifty and category allocation for many items such as food, liquor, cleaning, pet, etc. is a lot like a Thrifty. Many are even laid out like a Thrifty (most of the locations I am referring to that got remodeled in that manner are former Payless Stores which have straight up and down aisles with splits in the middle; ironically the former Thriftys seem to have gotten re-oriented with some vertical aisles and some horizontal aisles).

I think at this point in California they are doing the right thing with putting the Thrifty ice cream logo on the building signage and now in at least one case also on the roadside signage. As neat as it would be to see the stores rebrand to Thrifty, I am not sure what it would accomplish.

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