Walgreens Close To Buying Rite Aid

[storewanderer]

Rite Aid is a little weaker in NorCal, especially in the bay area, than in SoCal. They have closed a lot of stores and sold others. Conversely, Rite Aid has built some brand new stores in NorCal (not relocations) in the past 5-10 years. They still have a pretty good presence in Sacramento despite selling many stores there to Longs in 2000, and a presence in almost all rural towns with populations above about 3,000 in NorCal. CVS and Walgreens are few and far between in the rural towns, but CVS does have some presence. Walgreens Stores do very poorly in rural NorCal and generally around Sacramento the Rite Aids seem to be much busier than Walgreens. I have noticed Walgreens price scale in NorCal is very high (a lot higher than here in Nevada); 10-20% above Rite Aid for like items. Rite Aid uses two price scales in NorCal; there is a lower price scale for the rural stores, and a higher one for Sacramento/bay area. Auburn is on the lower price scale and so is Olivehurst, but Roseville and Folsom are both on the higher scale. I was once told the scale was due to higher theft in the larger areas. CVS seems to have a ton of price scales in NorCal; I've seen a scale in a rough part of Sacramento (in close proximity to a Walgreens, Target, and other stores) that was the lowest priced CVS I've ever seen, yet I've seen others in Lake Tahoe that are the highest priced CVS I've ever seen. About what you'd expect I guess.

[buckguy]

Walgreens probably wants the stores to fill gaps which actually would help them with the FTC--places like southern California or eastern markets like DC. the stores themselves are a mishmash--the DC stores are in second tier locations (ditto Atlanta) which will pose challenges for them or a third party.

[marshd1000]

More doubt on completion of the merger:

https://www.thestreet.com/story/1409327 ... -deal.html

[submariner]

More doubt on completion of the merger:

https://www.thestreet.com/story/1409327 ... -deal.html

I've moved your post to a more appropriate topic. Thanks!

[Alpha8472]

Fred's doesn't have the money to sustain so many Rite Aid stores. The FTC knows that it could be a Haggen situation all over again.

Taking on so many low performing unwanted Rite Aid stores would kill Fred's.

[marshd1000]

More doubt on completion of the merger:

https://www.thestreet.com/story/1409327 ... -deal.html

I've moved your post to a more appropriate topic. Thanks!

No problem, I had a brain fart!

[mbz321]

Rite Aid is still saying that the merger is still on track, with Fred's to take over 1,200 stores. I can't believe this is still going through.

https://consumerist.com/2017/05/04/rite ... 00-stores/

[pseudo3d]

Rite Aid is still saying that the merger is still on track, with Fred's to take over 1,200 stores. I can't believe this is still going through.

https://consumerist.com/2017/05/04/rite ... 00-stores/

Right, and Eddie Lampert is on the verge of turning around Sears Holdings to profitability.

[storewanderer]

Rite Aid needs to focus on itself and its ongoing operations. The merger is a ripoff to shareholders and to employees. Also, to countless landlords who stand to lose out as a result of the store closures or taking on a tenant like Fred's who is losing money, closed 39 stores last quarter, declining sales, etc.

Walgreens is having A LOT of operational problems at this time. They have pegged about 20% of their stores as "opportunity stores" (losing money in many cases) and are slashing labor, eliminating inventory by removing back endcaps and some aisle space, cutting SKUs in resets, etc. This is not the same Walgreens of 5 years ago or even 2 years ago; the operating environment has changed and not for the better. I actually think Walgreens wanted/wants out of this merger and that is why they lowballed the offer price, thinking Rite Aid would walk. But Rite Aid's management and Board is so focused on the big payoff they personally will get if this deal goes through that of course they are pushing for it. They would have been better off to continue to improve Rite Aid's operations over the past couple years, which they had been doing a great job at doing, and gotten performance bonuses for doing that.

[CalItalian]

Walgreens, Rite Aid To Certify Compliance, Forcing FTC's Hand On Merger Within 60 Days
https://www.forbes.com/sites/brucejapse ... 676ed83f90
Well, we should know shortly if the Feds block it or not. I'm leaning towards they're going to block it.