Walgreens Close To Buying Rite Aid

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Re: Walgreens Close To Buying Rite Aid

Post by BillyGr »

In at least one article it mentioned that Rite Aid would be operated as a subsidiary of Walgreens, rather than combining the two chains and eliminating one name.

After all, this is basically what they've done in NYC, they continue to use the Duane Reade name on those stores rather than changing everything to Walgreens.

It seems that the only concern would be in a town where the only two existing stores are Walgreens and Rite Aid - in a case like that they might require one of them be sold off to someone else (this happened in a couple places when Rite Aid bought out Eckerd, one that comes to mind is Lake Placid (NY) where they sold the Eckerd to Kinney (a small chain local to northern NY and VT)).

In terms of these two, that may be much more common in some parts of the US but in this area (NY and surrounding) Walgreens has only opened stores recently so they have a limited number.
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Re: Walgreens Close To Buying Rite Aid

Post by Super S »

BillyGr wrote:
It seems that the only concern would be in a town where the only two existing stores are Walgreens and Rite Aid - in a case like that they might require one of them be sold off to someone else (this happened in a couple places when Rite Aid bought out Eckerd, one that comes to mind is Lake Placid (NY) where they sold the Eckerd to Kinney (a small chain local to northern NY and VT)).
There are many towns in the Pacific Northwest where Walgreens and Rite Aid are the only traditional drugstores, the other pharmacies are Walmart, Fred Meyer, Target, as well as the various supermarket pharmacies. The few remaining independents tend to be in the really small towns that the chains mostly avoid.

CVS is largely absent from the Pacific Northwest. While they will soon be taking over Target's pharmacy operations, it is only recently that they have been opening stores in this area, and right now they are only in the Seattle area, where you also have Bartell Drug. But outside of Seattle, there aren't really any major regional drugstore chains unless you count Hi-School Pharmacy.
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Re: Walgreens Close To Buying Rite Aid

Post by norcalriteaidclerk »

I tried to abstain from this hot-button issue,but...

Being a 17-year RAD veteran who could be adversely impacted this long rumored yet finally announced merger,I rightfully find this worrisome:Outside of rare loan shifts,I've worked exclusively at a suburban NE Sac(Citrus Heights)location(originally a former Thrifty that relocated a year into my tenure)in an area where all 3 chains operate within a couple blocks of each other.This location(RA-1)could potentially shutter if the merger gets the green light as it is sandwiched in between 2 existing extended-hour Walgreens locations along the same main drag,and I fear that this could be my home store's final Christmas.While I've read that they may lack long-term capital expenditure funds following the Safeway acquisition to consider doing so,I've seriously wondered if Albertsons would ever at least consider re-entering the stand-alone drugstore business:They still own the Sav-on/Osco trademarks and still use them for their pre-Safeway merger supermarket pharmacies(both ABS and ASC legacy chains)even though the original standalone pharmacies were sold off to CVS a decade ago during the restructuring/short-lived division of the original Albertsons company which was since reunified.Just in the 916 alone,there are many areas where RAD and WAG operate within half-mile from one another;and some but not all of those concentrations are in CVS-less deserts where the nearest such location is over a mile away(Longs still had coverage holes upon merging with CVS even though they were a spirited regional challenger to RAD while independent).While at least 95% of the California RAD locations are unionized(including mine),this will understandably be a challenge to the various relevant UFCW/SEIU locals as well as the FTC;and I'm very aware on the Haggen quagmire... :?
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Re: Walgreens Close To Buying Rite Aid

Post by pseudo3d »

I don't think seeing Sav-on/Osco pharmacies again are out of the realm of possibility. Here's an article that I found that mentions about Sav-on Pharmacy opening inside a hospital in 2013. (link)
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Re: Walgreens Close To Buying Rite Aid

Post by storewanderer »

I think this might actually be very possible. In AZ/NM, the LLC Stores have kept the old "Osco" departments with a full drug mix, ongoing promotions (% off full lines of vitamins, cosmetics, etc. very similar to the old Osco/Sav-On freestanding store promotions), etc.

The drugstores were good performers for the old Albertsons and were a good compliment to the rest of the operation. As long as they get drug people in to run them and don't have Safeway people trying to run them (who wouldn't have a clue what to do) they should do fine.
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Re: Walgreens Close To Buying Rite Aid

Post by Alpha8472 »

Safeway does not know how to run a successful pharmacy. Their pharmacies in California are low volume. They simply don't attract customers like they should, and the over the counter medication assortment is dismal. Safeway needs to expand their over the counter medication section to match those of Albertsons stores. Whatever happened to the full Equaline over the counter medication assortment? Signature Care which was formerly Safeway Care health items is not enough.

Pharmacies can be very profitable for supermarkets as they draw in customers who fill prescriptions and shop at the same time. The key is not accepting unprofitable insurance plans such as the various state Medicaid and county Medicaid programs which don't pay pharmacies enough money.

Stand alone pharmacies might be profitable if they are located near hospitals and are in good locations such as major street corners near freeways. The problem is that when you have a stand alone drugstore there are issues with bad locations such as high theft urban locations. Preferably a pharmacy inside of a hospital or medical clinic would be very profitable, but once you have a drugstore on its own there are problems. Most of the profit comes from the pharmacy. Then there is the front end which could be the part that loses money if it is poorly run.

The Sav-On name is not known in many areas now. Only Southern California has any significant amount of people who remember the Sav-On name. The Sav-On name in other markets was barely even known as something that was once attached to Lucky or Albertsons pharmacies. I doubt adding Sav-On branding to Safeway stores will do anything. A Sav-On drugstore would be unheard of in Northern California. I doubt people would flock to them just for the name.
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Re: Walgreens Close To Buying Rite Aid

Post by pseudo3d »

Equaline was lost to SuperValu, like everything else sadly. Albertsons should probably try to re-launch their drug line or buy Equaline back.
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Re: Walgreens Close To Buying Rite Aid

Post by storewanderer »

I agree Safeway's OTC drug program is terrible. However here in Nevada, Safeway has always done pretty well with pharmacy for some reason. My experiences using their pharmacy have been positive. For quite a few years the Reno Safeway Pharmacy even had extended hours being open until midnight.

Currently in the Albertsons Stores, the Equaline brand is going away and being replaced by "Signature Care." It appears item mix is being cut and prices are actually being increased.

Albertsons continues to run a drug distribution center in Ponca City, OK which is where all of the Equaline stuff was previously coming from. They really should have figured out a way to keep Equaline and ditch the "Signature Care" product line which is terrible. The packages are also difficult to see/identify; too much print and too small. Similar to the "Mom to Mom" baby line which is another poor, small, and extremely overpriced product line. The Supervalu/Albertsons "Baby Basics" line was better, with brighter happier more down to earth packaging, better pricing, and a far better assortment.

If Albertsons was smart they would get back Equaline, Baby Basics, and Wild Harvest from SuperValu and re-launch those lines. Safeway's O Organics is a hard sell and not nearly as successful as Safeway wants everyone to believe. Same for Open Nature. Time to take a write down on the goodwill for those brands.

Under American Stores, the two keys to success for Osco/Sav-On were pharmacy and liquor. They also ran pretty good specials on other front end items and the stores had pretty busy front ends. Sav-On would just get in full pallets of things like paper towels, cat litter, vodka, whiskey (Albertsons or Lucky brand) and sell these items dirt cheap to draw in traffic. Albertsons messed this up a bit but not too badly. People would buy other items in addition; snacks, a seasonal item, pick up soap or some OTC item, etc. I think if they brought this formula back it could be successful again. Walgreens and CVS put little to no focus on the front end; there is money to be made on a drugstore front end if you try. The problem is Walgreens and CVS do not try so there is little action sales-wise and there are just the issues described (theft and outdated products).
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Re: Walgreens Close To Buying Rite Aid

Post by pseudo3d »

storewanderer wrote:I agree Safeway's OTC drug program is terrible. However here in Nevada, Safeway has always done pretty well with pharmacy for some reason. My experiences using their pharmacy have been positive. For quite a few years the Reno Safeway Pharmacy even had extended hours being open until midnight.

Currently in the Albertsons Stores, the Equaline brand is going away and being replaced by "Signature Care." It appears item mix is being cut and prices are actually being increased.

Albertsons continues to run a drug distribution center in Ponca City, OK which is where all of the Equaline stuff was previously coming from. They really should have figured out a way to keep Equaline and ditch the "Signature Care" product line which is terrible. The packages are also difficult to see/identify; too much print and too small. Similar to the "Mom to Mom" baby line which is another poor, small, and extremely overpriced product line. The Supervalu/Albertsons "Baby Basics" line was better, with brighter happier more down to earth packaging, better pricing, and a far better assortment.

If Albertsons was smart they would get back Equaline, Baby Basics, and Wild Harvest from SuperValu and re-launch those lines. Safeway's O Organics is a hard sell and not nearly as successful as Safeway wants everyone to believe. Same for Open Nature. Time to take a write down on the goodwill for those brands.

Under American Stores, the two keys to success for Osco/Sav-On were pharmacy and liquor. They also ran pretty good specials on other front end items and the stores had pretty busy front ends. Sav-On would just get in full pallets of things like paper towels, cat litter, vodka, whiskey (Albertsons or Lucky brand) and sell these items dirt cheap to draw in traffic. Albertsons messed this up a bit but not too badly. People would buy other items in addition; snacks, a seasonal item, pick up soap or some OTC item, etc. I think if they brought this formula back it could be successful again. Walgreens and CVS put little to no focus on the front end; there is money to be made on a drugstore front end if you try. The problem is Walgreens and CVS do not try so there is little action sales-wise and there are just the issues described (theft and outdated products).
The CVS where I used to attend college was a small store and had food right where you walked in. A third of the store had food (always overpriced and dry/frozen products only...no produce or meat, even pre-packaged), a third was cosmetics, and a third was HBA/pharmacy. It did big business, only because it was a dense but underserved area with no supermarkets or pharmacies (and a stone's throw away where a long-defunct Skaggs Albertsons was, which was 24 hours...the CVS isn't).

As for Albertsons, they do need to relaunch a number of brands, either by creating new lines or buying some back.
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Re: Walgreens Close To Buying Rite Aid

Post by norcalriteaidclerk »

http://fortune.com/2015/11/05/walgreens ... -closings/
http://consumerist.com/2015/11/05/if-wa ... ght-close/

No wonder I'm rooting for Albertsonsafeway to revive the standalone Sav-on/Osco chain.If this doesn't have the same outcome/scrutiny as the prior/current attempts to merge Staples and Office Depot/Max,this could at least lead to a prolonged and protracted FTC review as lengthy as that of the ABS/SWY merger if not longer. :shock:
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