Rite Aid's Future

[romleys]

Yes that San Pablo location is a mess. I feel like Walgreens has it pretty good though with their store locations more or less the same size along with the bland interior decor. The Payless locations truly put the burden on Rite Aid since the store size on average was so big...

[storewanderer]

Rite Aid made a lot of screw ups on the west coast in the late 90s. Attempting to cut the merchandise mix in the Payless locations, taking merchandising control away from the store managers (which has since been re-granted in the large stores), very poor systems conversion, cutting the weekly ad circular to every other week (quickly switched to weekly ads within a few months of that bonehead move), Rite Rewards Card rolled out in Northwest markets where people had spoken loudly that they did not like loyalty cards when Safeway rolled one out there previously, etc.

I really don't see the current Rite Aid as being much different from the old Thrifty. Thrifty wasn't exactly known to be a five star operation. My basic memories of Thrifty involved old, dirty stores, high pricing, stores with few customers, and messy stores. I'm sure there were some good Thriftys out there...

[romleys]

If Rite Aid simply made a deal where they could've acquired the Thrifty stores they wouldve likely been MUCH better off. I remember Thrifty having very messy and outdated stores as well. It was one of those places where some shelves were never cleaned and if you touched them you would get this sticky and dusty feeling on your fingers. Remember how Rite Aid only carried Pepsi-Cola until 1999 or so when they decided to stock both Pepsi and Coca-Cola...?

[Brian Lutz]

As far as Walgreens expanding in the Pacific Northwest, they have a major problem in that those stores are supplied from the Woodland, CA distribution center. There are a lot of supply issues as a result of that. Walgreens needs a distribution center up there to support that group of stores. I suspect Bartell will end up in the hands of Walgreens and a blank check is sitting on the desk of the current owners of that little chain from Walgreens that says to "name your price."

I tend to disagree with this (although I suspect I could end up being proven wrong.) For one thing, Bartell Drugs is prominent in the Seattle metro area, but has never really expanded much beyond that (and they have a total of only 56 stores, with a lot of those fairly close to each other.) For another thing, the ownership is still within the Bartell family (three generations now,) and will probably remain so. Third, if Rite Aid were to disappear from the Seattle market they would probably be in the best position to benefit from it, since Walgreens has a very limited presence in this area.

I think Walgreen's would be far more likely to pursue taking over Rite Aid stores here if they became available, if for no other reason than the fact that there's much more expansion potential there than they'd get out of Bartell Drugs.

[storewanderer]

Actually it had been the opposite on the soda. As I understand it, the East Coast Rite Aids only sold Coke (no Pepsi). The in the late 90's Pepsi supposedly outbid Coke for an exclusive at Rite Aid, so all Rite Aids discontinued Coke (nationwide) and went with Pepsi only. This was another decision made by the same management team involved with the Accounting irregularities. They were also allowed to carry secondary brands like those delivered by 7-Up or other vendors, but no Coke handled product was allowed. I understand this move of discontinuing Coke went over even worse down in the South where Rite Aid had purchased K&B/Harco, than it did in the west.

As you recall, by 2000 or 2001, under new management, Rite Aid reversed course on this and started to carry Coke again (and also started to offer a private label Soda, Big Fizz, that came in less than professional looking containers and tasted worse than the containers looked).

I really think Bartell would be attractive for either Walgreens or CVS. That's where my blank check comment comes from. I hope they don't sell out and just continue with their current operation. CVS has expanded some in Montana after getting some Oscos there by buying someone who had some smaller stores spread around there. I think there are just a few Walgreens in Montana, if that many.

What type of store sizes are seen on those Rite Aids in Seattle? The ones I went to in Spokane were all Thrifty-sized (20,000 square feet) and I assume former Pay N Saves or former Oscos.

[Alpha8472]

I remember the Big Fizz soda bottles. When I first saw them, I thought that they were the biggest soda bottles ever! I bought them, and they were terrible tasting. They still carry Big Fizz, but the bottles have shrunk down to normal looking 2 liter bottles.

I looked on Google Street view. There are many different sizes of Rite Aid stores in Seattle. Generally they are quite small. I saw some with very tiny store fronts in urban locations. A few of them were larger, but I would say no bigger than a Walgreens.

[Brian Lutz]

As far as I am aware, almost every Rite Aid store in the area here can be traced back to Pay 'n Save. The ones that are newer are generally freestanding stores built to replace older Pay 'n Save stores.

[Alpha8472]

I saw a few newer style Rite Aids. They looked like typical new Rite Aid builds. They were small stores located on street corners with the typical Rite Aid little square windows. Most of the other stores were store fronts in urban areas. I saw one converted movie theater that preserved the lighted theater marquee with neon.

[buckhead]

Obviously Rite Aid is hurting. Their acquisition of the Brooks and Eckerd locations probably did not yield all the benefits they wanted. There recent decision to quit several markets is not unusual for a retailer that sees too many negatives in remaining in certain markets. Still, I just wonder where they are really heading and what management of the company is realistically expecting to do in coming months.

Here in Atlanta Rite Aid has remodeled most of the stores it plans to keep, but some still need attention. Eckerd was a major player here at one time, but lost focus. Many new Eckerd locations were built during the JCPenny days and during the early days of the Brooks/Eckerd combination. Unfortunately quite a number of these locations were not placed well and ended up being dogs that were subsequently sold. Some of these stores were poorly place with respect to traffic flow/access and competition from other pharmacies. Some were subject to high shrinkage rates as a result of shoplifting and other merchandise diversion. After the Brooks/Eckerd combination, stores generally got minor facelifts at best. Since the acquistion by Rite Aid the reamining stores finally got new permanent signs are either minor or major interior redesigns for the most part. However, I am not aware of a single new-build location in the area (or elsewhere in North Georgia). I was expecting at least a few replacement standalone units for some of the aging Eckerd stores, but have seen none. In fact, Rite Aid continues to close units, often on very short notice (2 weeks or so), probably only after selling the prescription records. One location near me never got the interior rework, and the employees only found out about the closing about two weeks before the place shut down. Many of these closings have left fairly large holes in neighborhood coverage in a metro area that was once prime territory for Eckerd. Now it is much easier to shop the competition than seek out a Rite Aid location in many suburban communities. It is almost as if they are dismantling their coverage bit by bit and driving customers away in the process. Add to that the fact that many advertised items are not in stock for the sale and rebate offers, some stores capriciously ignore their own posted hours of operation, and the overall inadequate merchandise stocking at some locations and one can see why customer interest is waning. As a rule, I've not encountered unusually bad behavior on the part of employees, but I am sure morale is down for them.

So I'm just wondering, is this a typical pattern in other former Brooks/Eckerd areas or a general trend for Rite Aid everywhere? With the money crunch, is Rite Aid preparing other major markets for disposal?

[lasvegasmike]

[quote][/quote]As far as Walgreens expanding in the Pacific Northwest, they have a major problem in that those stores are supplied from the Woodland, CA distribution center. There are a lot of supply issues as a result of that. Walgreens needs a distribution center up there to support that group of stores. I suspect Bartell will end up in the hands of Walgreens and a blank check is sitting on the desk of the current owners of that little chain from Walgreens that says to "name your price."



If walgreens or cvs were to buy rite aid stores in the northwest they would have a warehouse already in place, rite aid has a d.c. in wilsonville oregon , near portland. The problem that the wilsonville d.c. had was that they were the highest paid of all warehouses. At one time the northwest stores were all for sale but there were no takers. There days are numbered.