Rite Aid's Future

[krogerclerk]

Rite Aid is in dire financial straights, but I would hate to see RA close down, as they are the best chain drug store alternative to Walgreens and CVS.

Rite Aid needs to evaluate which markets would be best to exit and a bankruptcy may be unavoidable in the process, NV has been the only major exit since the merger and now the city of San Francisco. Also many eastern markets particularly in NY,PA, and NJ were RA strongholds prior to the Eckerd merger, creating duplicated stores which RA is slowly closing, apparently as leases expire. The chain is burdened by the debt from acquiring Brooks/Eckerd from Jean Coutu. Also Wall Street has continued to punish the chain for the actions of the previous management regime.

In NE Georgia a stand alone Rite Aid(former Eckerd) was burnt down in an act of arson. It was the only chain drugstore in town, but Walmart Supercenter has a pharmacy nearby. If the store is not rebuilt, it would indicate that RA may not be long for the Atlanta region. Eckerd and Revoc(now CVS) had been the two dominant drug stores in the region since the 80's, but Walgreen's is aggressively expanding in Georgia, though CVS and Rite Aid still have considerably more stores than Walgreens.

[Super S]

Rite Aid, if you judge by the apperance of their stores, is hard to figure out. In the Portland, OR area, Rite Aid has recently built a few new stores. However, there are still many unremodeled former PayLess stores in operation. Some are fully stocked, others have areas walled off. It is also interesting how some stores close down with no replacement and no nearby stores.

I would hate to see Rite Aid completely disappear. However, I don't know if they will survive in this area. Walgreens is really making inroads, and Wal-Mart is still building stores. Target is also adding pharmacy departments as they remodel and build new stores. Rite Aid alienated many people when they took over PayLess, and many of these people have simply moved to the competition. The one consistent thing I have noticed about Rite Aid in general is the lack of customers in the stores I have visited, whether new or old. I sometimes wonder how they stay in business.

[storewanderer]

The CA Rite Aids seem to be pretty busy, generally, at least relative to Rite Aids in other places. The Utah ones also seemed to be kind of busy. Keep in mind by busy, I am meaning there are like 8-12 customers shopping at once.

The Idaho ones were dismal; typically just another customer or two. It was quite sad.

The Reno Rite Aids (since sold to Longs) seemed to do sort of okay; there were usually 6-12 customers shopping at any given time; one of the locations was very slow with a more standard customer count of 2-5 customers. Longs is not doing any better with these stores than Rite Aid did, in fact, I think they may be doing worse.

I too wonder how some of their stores stay in business. In their loss report conference call today, they spent a lot of time talking about initiatives to cut expenses in the "low volume" stores; they said there are 566 low volume stores in the chain I believe. I'm thinking their definition of "low volume" is probably like nothing we see out west... but that is just a guess.

[Alpha8472]

Rite Aid seems to be doing ok right now. Their stock has been over the dollar mark for a while.

I think that they will continue to survive for quite a while. Their stores are ok.

Also, all of the Rite Aid stores in San Francisco are now Walgreens.

[storewanderer]

They have a financial report this coming week. I'm not going to make any predictions, but we know how their financial reports usually go.

I was in the South Lake Tahoe Rite Aid and noticed they installed some silver shelving arranged with imported/gourmet food similar to what Longs has. I was also in the Truckee Rite Aid and they did not have this new gourmet food area present.

[Alpha8472]

Longs Drugs realized that a nice selection of gourmet foods attracted more people into their stores.

Now that CVS is getting rid of most of the gourmet food at Longs, Rite Aid is hoping to gain some of the customers that love the gourmet food. It really depends on the neighborhood. Richer neighborhoods seem to love the gourmet food.

[Super S]

I visited a Rite Aid store today on Division in Portland, in a shopping center shared with a Safeway. This one is also an unremodeled former PayLess, and was one of the last PayLess stores built as it had the pharmacy up front. This store had an area marked "Photo Finishing" which had nothing even related to that. This store apparently does not offer any photo services as there was no counter there or anything, but all the signs are still in place. The rest of this store just seemed odd they way it was set up, it kinda gave me the feeling Rite Aid is just waiting for the lease to run out so they can close it.

[Super S]

That Rite Aid has the same interior as the one in this commercial:

[Alpha8472]

I have indeed seen the Pharmacy at the front format on two stores in my area. One store opened as a Payless around 1996 but had standard aisles instead of the diagonal aisles. It was remodeled by Rite Aid just a few years ago with the late 90s decor. The other store is in Martinez, which was a former Payless, has the store of the future layout. The aisles were originally diagonal and are still in that format today. The current decor is late 90s Rite Aid decor, but the Pharmacy is still near the front of the store on the side.

By having the Pharmacy in the back, people had to walk through the store and be tempted to buy more stuff. The convenience of having a Pharmacy up front is minor.

[storewanderer]

The Gardnerville Payless was like that with pharmacy up front. Rite Aid remodeled that into the late 90s decor around 2000 and kept the old layout, then did a major remodel there a couple years ago so the pharmacy is now along the side wall. There is still a very clear path between entry and pharmacy, but it gets you past most departments (food and liquor excluded).