Rite Aid closing at least 63 stores

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buckguy
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Re: Rite Aid closing at least 63 stores

Post by buckguy »

ClownLoach wrote: January 22nd, 2022, 4:51 pm
storewanderer wrote: January 22nd, 2022, 11:44 am Here is a strange closure. 24 hour store, busy area in NYC. New logo applied outside. Looking at the photos of the store this is easily the nicest looking Rite Aid I've ever seen. It has the later Wellness package but has upgraded tile flooring and just looks really, really good. I am assuming some of the very high shelves with cabinets on the top shelf are for product storage which certainly looks better than a bunch of random stuff on the top shelf visible. Also interesting is the store's rating on Google Maps- 4.4/5. Not sure I've ever seen a chain drugstore with such high customer ratings on Google.
https://www.nydailynews.com/new-york/ny ... story.html
The story said it opened in 1996 - wonder if it's really a lease issue where they ran out of term and the landlord wants way too much for a new lease? And on top of that something must have happened nearby, probably a new competitor that took too large a bite out of the local market. Most stores with large seasonal departments have a peak kick out on their lease where they can decide not to renew and stay in place month to month for up to 90 days after Christmas. Back in 1996 drugstores generally had more seasonal merchandise than they do today and would get those kinds of leases (craft stores and discounters like Big Lots also have those terms). It is odd that it received the ultra deluxe Wellness package with the premium floors - those are few and far between - they wouldn't have given that level of remodel to anything less than a top volume store. The overhead storage also indicates high volume.
Manhattan is overstored with drug stores. For awhile, it was a local joke that any empty space would be come a Duane Reade (local chain bought by Walgreen) or a bank branch. Now, Walgreen is closing stores there and in the outer boroughs and, at the very least, CVS has stopped its own very aggressive expansion. Many of these stores are relatively large for Manhattan and probably have very high rental costs. Rite-Aid is a small factor with just a few stores and I'm guessing that they haven't been able to make a go of it there with the overstored competition. They blame shoplifting, but they wouldn't have invested so much in a store only to say that theft led to its closing. There's still a lot of foot traffic in that area but I'd imagine that they depended a lot on the tourist trade, which was just starting to rebound before Omicron. A number of hotels have opened in that area over the past decade and some older places have had major renovations. It may be that a variety of factors have driven up costs. OTOH, it will be interesting to see if they just quietly exit Manhattan altogether.
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

buckguy wrote: January 23rd, 2022, 6:37 am

Manhattan is overstored with drug stores. For awhile, it was a local joke that any empty space would be come a Duane Reade (local chain bought by Walgreen) or a bank branch. Now, Walgreen is closing stores there and in the outer boroughs and, at the very least, CVS has stopped its own very aggressive expansion. Many of these stores are relatively large for Manhattan and probably have very high rental costs. Rite-Aid is a small factor with just a few stores and I'm guessing that they haven't been able to make a go of it there with the overstored competition. They blame shoplifting, but they wouldn't have invested so much in a store only to say that theft led to its closing. There's still a lot of foot traffic in that area but I'd imagine that they depended a lot on the tourist trade, which was just starting to rebound before Omicron. A number of hotels have opened in that area over the past decade and some older places have had major renovations. It may be that a variety of factors have driven up costs. OTOH, it will be interesting to see if they just quietly exit Manhattan altogether.
The part I find most interesting is that it is a 24 hour store. If you have theft issues and/or volume issues, one of the first things you'd do is quit operating the store 24 hours. Unless they have a lease stipulation requiring 24 hour operation (never heard of that before).

Rite Aid runs very few 24 hour stores.
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Re: Rite Aid closing at least 63 stores

Post by ClownLoach »

storewanderer wrote: January 23rd, 2022, 10:40 am
buckguy wrote: January 23rd, 2022, 6:37 am

Manhattan is overstored with drug stores. For awhile, it was a local joke that any empty space would be come a Duane Reade (local chain bought by Walgreen) or a bank branch. Now, Walgreen is closing stores there and in the outer boroughs and, at the very least, CVS has stopped its own very aggressive expansion. Many of these stores are relatively large for Manhattan and probably have very high rental costs. Rite-Aid is a small factor with just a few stores and I'm guessing that they haven't been able to make a go of it there with the overstored competition. They blame shoplifting, but they wouldn't have invested so much in a store only to say that theft led to its closing. There's still a lot of foot traffic in that area but I'd imagine that they depended a lot on the tourist trade, which was just starting to rebound before Omicron. A number of hotels have opened in that area over the past decade and some older places have had major renovations. It may be that a variety of factors have driven up costs. OTOH, it will be interesting to see if they just quietly exit Manhattan altogether.
The part I find most interesting is that it is a 24 hour store. If you have theft issues and/or volume issues, one of the first things you'd do is quit operating the store 24 hours. Unless they have a lease stipulation requiring 24 hour operation (never heard of that before).

Rite Aid runs very few 24 hour stores.
I've found that all recent shopping center leases dictate minimum hours of operation, but those are adjustable "down" by the landlord. They are typically something like "minimum operating hours Monday through Saturday 10am to 7pm" but generally nobody is really looking at this. I think it is more to give cause to the landlord to break the lease if a tenant closes a store and wants to try to pay dead rent to keep a competitor out. I think a 24 hour requirement is possibly something that could be on a lease for various reasons but I am not an expert on New York City. I have seen oddball setups in NYC where the lobby to apartments is accessed through a retail space which forces the 24 hour requirement but usually this is in low end neighborhoods and the store is like a convenience store.

I do wonder if the grocery delivery business is growing in NYC. There isn't really any warehouse space in the city for the type of delivery hubs Amazon or others would use to reduce costly tunnel/bridge tolls plus I believe that larger trucks are limited to overnight. That would make expansion of deliveries difficult for new players in the market, and same day deliveries very unlikely.

The lack of conventional discount stores used to make these drugstores operate like the Target or Walmart of their neighborhood for household goods. And the prices weren't cheap. So if enough people are having their laundry soap and toilet paper delivered by Amazon or others then it would not bode well for the massive overdensity of drugstores there. Delivery was happening in all of these stores before e-commerce existed due to the overall lack of automobiles on the island. Most stores have courier services where for what used to be a nominal charge they would deliver your purchase in three or four hours allowing you to get home on the subway or bus. But the free shipping of Amazon, or Walmart+, or Target through whatever their requirements are would leave most Manhattan residents better off to do their primary shops online now and use the local stores just for convenience and/or fresh items only.
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Re: Rite Aid closing at least 63 stores

Post by buckguy »

The overbuilding of the drug store chains came fairly recently and their niche has more competition with Target, Trader Joe's and concentrations of big boxes. They probably didn't benefit from the demise of A&P (which had been slowly shrinking) and there are signs of life in Gristede's (the local grocery chain people like to hate) which has a store near this one and post-bankruptcy Fairway. NYC used to have quite a few variety stores including the local Lamston's, but they also have home grown no-frills discount places like Jack's.

My guess is that Rite-Aid simply didn't succeed---they don't have a big presence overall and there are plenty of Walgreen and CVS stores around---there are 2 Duane Reades and a CVS within a few blocks of this store. This one is kind of isolated from the other Rite-Aids---they have a concentration downtown where there's a lot of recent development and in parts of Manhattan that are very residential and don't get tourists, including quite a few in the far upper West side, where CVS doesn't have any. I've been to this store and it's pretty forgettable---part of a redeveloped block which makes me think that the rent must be very high.
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Re: Rite Aid closing at least 63 stores

Post by luckysaver »

Vacant Whittier Santa Fe Springs Rite Aid (corner of Washington Blvd and Norwalk Blvd) to become Pic N Save. Yes Pic n Save IS BACK!!!! - the owner of the new Anaheim location (and an outlet shop near Ontario Mills Mall) bought the rights to the name from Big Lots - he used to be in upper level managment at the original Pic n Save/MacFrugals corporate office in Carson and was close to the original chain founder Bill Zimmerman.

https://pnsbargains.com/pages/about-us
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Re: Rite Aid closing at least 63 stores

Post by ClownLoach »

luckysaver wrote: January 24th, 2022, 2:53 am Vacant Whittier Santa Fe Springs Rite Aid (corner of Washington Blvd and Norwalk Blvd) to become Pic N Save. Yes Pic n Save IS BACK!!!! - the owner of the new Anaheim location (and an outlet shop near Ontario Mills Mall) bought the rights to the name from Big Lots - he used to be in upper level managment at the original Pic n Save/MacFrugals corporate office in Carson and was close to the original chain founder Bill Zimmerman.

https://pnsbargains.com/pages/about-us
The Anaheim operation is legitimate brand use - but it is not connected to the Ontario one. I believe that the Ontario operator is trying to usurp the trademark because it wasn't being used. It is probably only a matter of time before these two are on opposite sides of a courtroom. I just hope that such a battle doesn't cause the whole revival to implode. Legal fees are not cheap.

The Anaheim store is small, it is a closed mini size Staples with an unusual layout of entrances on two sides of a strip mall. Everything did appear to be a good bargain, but selection was very limited due to the store size. For this to succeed it is going to need to be a bigger store size with more merchandise to choose from. Store decor, cleanliness, operations were excellent and it didn't feel like it was a standalone store - the branding and signage was good enough to make you feel like you were shopping in a chain of a thousand stores.
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

It seems the Rite Aid closure is being blamed on theft, things sounding not unlike what is happening in San Francisco.

Theft wasn't a problem before- what changed?

https://nypost.com/2022/01/26/second-sh ... d-emerges/

https://www.dailymail.co.uk/news/articl ... goods.html

https://www.nydailynews.com/new-york/ny ... story.html

Also in one of those articles is a video. I see what looks like about 5 self checkouts against the front wall. If there is a theft problem- why do you have self checkout? Why is the store open 24 hours?

Something doesn't add up.
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Re: Rite Aid closing at least 63 stores

Post by ClownLoach »

storewanderer wrote: January 26th, 2022, 9:02 pm It seems the Rite Aid closure is being blamed on theft, things sounding not unlike what is happening in San Francisco.

Theft wasn't a problem before- what changed?

https://nypost.com/2022/01/26/second-sh ... d-emerges/

https://www.dailymail.co.uk/news/articl ... goods.html

https://www.nydailynews.com/new-york/ny ... story.html

Also in one of those articles is a video. I see what looks like about 5 self checkouts against the front wall. If there is a theft problem- why do you have self checkout? Why is the store open 24 hours?

Something doesn't add up.
And Rite Aid is denying it and speaking generically about how they evaluate the business trends of each store etc. Basically the same problem that has been happening in retail for years. Publicly traded retailers usually wind up being forced to invest in their own stock to prop up declining earnings. Then they report on the 10-Q that they had theft losses of $X million over budget. Wall Street considers it all to be preventable loss as in their Ivory Towers they think if anything gets stolen it must be due to bad management. Stock price plummets and causes a drop of 20X the $X million in theft over budget. When a shoplifter takes a cart load of product out the door every day - the media finds out - the stock price drops harming the retailer that invested in itself - now the stock price drop causes enough financial loss that its like they stole an entire 53' trailer of product instead.

I have lived through this - I worked for a now defunct company that had repurchased a few billion of their stock - they reported that $20M of the quarterly earnings miss was shrink - and the stock drop by the end of the week wiped out $400M of the company's equity in itself. Obviously next quarter earnings miss was $400M plus whatever else they lost. That was the last straw that forced that company into Chapter 11.

This is why retailers say that externally "we don't talk about shrink". And this is why they're encouraged not to even report it to the police, even if they do prosecute in that area, unless the loss is so large it is worth reporting. They don't even want the public records of theft to exist. They have to assume that if the public heard of a $10,000 theft the impact to stock will cause the company to lose $200,000 more. They can't report theft.

Until the National Retail Federation and other such industry groups go drive the reality of theft through the thick skulls of the worthless Wall Street analysts, most of whom have never worked a day of retail in their lives and would be fired halfway through their first shift on a cash register. These morons have to understand that the industry is losing hundreds of billions of dollars and that unless they stop criticizing retailers that speak out and want the problem fixed the issue will never go away.

This store has made national attention this month, like the San Francisco Walgreens did last year. RAD stock is down 17% since the story broke couple weeks ago. CVS stock is flat in same time period. Walgreens stock is down single digit in same time period. No earnings announcements in the time period to affect stock prices. This shows again that the stock market does punish retailers when they hear publicly about shrink. How much more would they be down if they publicly confirmed what is obviously happening instead of the PR speak?
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

ClownLoach wrote: January 27th, 2022, 2:52 pm

And Rite Aid is denying it and speaking generically about how they evaluate the business trends of each store etc. Basically the same problem that has been happening in retail for years. Publicly traded retailers usually wind up being forced to invest in their own stock to prop up declining earnings. Then they report on the 10-Q that they had theft losses of $X million over budget. Wall Street considers it all to be preventable loss as in their Ivory Towers they think if anything gets stolen it must be due to bad management. Stock price plummets and causes a drop of 20X the $X million in theft over budget. When a shoplifter takes a cart load of product out the door every day - the media finds out - the stock price drops harming the retailer that invested in itself - now the stock price drop causes enough financial loss that its like they stole an entire 53' trailer of product instead.

I have lived through this - I worked for a now defunct company that had repurchased a few billion of their stock - they reported that $20M of the quarterly earnings miss was shrink - and the stock drop by the end of the week wiped out $400M of the company's equity in itself. Obviously next quarter earnings miss was $400M plus whatever else they lost. That was the last straw that forced that company into Chapter 11.

This is why retailers say that externally "we don't talk about shrink". And this is why they're encouraged not to even report it to the police, even if they do prosecute in that area, unless the loss is so large it is worth reporting. They don't even want the public records of theft to exist. They have to assume that if the public heard of a $10,000 theft the impact to stock will cause the company to lose $200,000 more. They can't report theft.

Until the National Retail Federation and other such industry groups go drive the reality of theft through the thick skulls of the worthless Wall Street analysts, most of whom have never worked a day of retail in their lives and would be fired halfway through their first shift on a cash register. These morons have to understand that the industry is losing hundreds of billions of dollars and that unless they stop criticizing retailers that speak out and want the problem fixed the issue will never go away.

This store has made national attention this month, like the San Francisco Walgreens did last year. RAD stock is down 17% since the story broke couple weeks ago. CVS stock is flat in same time period. Walgreens stock is down single digit in same time period. No earnings announcements in the time period to affect stock prices. This shows again that the stock market does punish retailers when they hear publicly about shrink. How much more would they be down if they publicly confirmed what is obviously happening instead of the PR speak?
I think the theft thing is going to reach an ugly head soon. These drugstores are low enough volume that they simply can't shoulder cartfulls going out the door. It seems some of these large cities have made multiple bad policies that encourage theft or make it easier for thieves, from the DAs who won't prosecute, to the environmentalists who normalize reusable bags (a vector for theft). We can say well the stores will just close. If the stores close, this will convert to additional theft of freight (as we got a preview of in the Los Angeles railyard) from other channels; there are many. It may get to a point it is not even safe for a USPS or FedEx delivery driver to be making deliveries. What happens then? Will that finally be enough for something to be done? Or will everyone have to go pick up packages at their nearby USPS or the 20 miles away FedEx or UPS depot? It will be too late.

CVS won't talk about theft because their tracking isn't great. There is zero accountability for what comes into the stores on those totes from the warehouse. The stores have the supposed on hand quantity based on what the system says and shrink is measured at the store level but there is no recourse for if the warehouse shorts the store, the store basically eats it. Nobody talks much about external theft at CVS. Their concern is internal theft, writing up cashiers for using the "price verify" button (yet they have a scanner for the customer to do a self serve price check, or the clerk can price check on their handhelds), writing up supervisors for not doing a "bag check" on the female pharmacy manager as she exits the store with her transparent purse for the night, and that sort of thing.
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Re: Rite Aid closing at least 63 stores

Post by veteran+ »

ClownLoach wrote: January 27th, 2022, 2:52 pm
storewanderer wrote: January 26th, 2022, 9:02 pm It seems the Rite Aid closure is being blamed on theft, things sounding not unlike what is happening in San Francisco.

Theft wasn't a problem before- what changed?

https://nypost.com/2022/01/26/second-sh ... d-emerges/

https://www.dailymail.co.uk/news/articl ... goods.html

https://www.nydailynews.com/new-york/ny ... story.html

Also in one of those articles is a video. I see what looks like about 5 self checkouts against the front wall. If there is a theft problem- why do you have self checkout? Why is the store open 24 hours?

Something doesn't add up.
And Rite Aid is denying it and speaking generically about how they evaluate the business trends of each store etc. Basically the same problem that has been happening in retail for years. Publicly traded retailers usually wind up being forced to invest in their own stock to prop up declining earnings. Then they report on the 10-Q that they had theft losses of $X million over budget. Wall Street considers it all to be preventable loss as in their Ivory Towers they think if anything gets stolen it must be due to bad management. Stock price plummets and causes a drop of 20X the $X million in theft over budget. When a shoplifter takes a cart load of product out the door every day - the media finds out - the stock price drops harming the retailer that invested in itself - now the stock price drop causes enough financial loss that its like they stole an entire 53' trailer of product instead.

I have lived through this - I worked for a now defunct company that had repurchased a few billion of their stock - they reported that $20M of the quarterly earnings miss was shrink - and the stock drop by the end of the week wiped out $400M of the company's equity in itself. Obviously next quarter earnings miss was $400M plus whatever else they lost. That was the last straw that forced that company into Chapter 11.

This is why retailers say that externally "we don't talk about shrink". And this is why they're encouraged not to even report it to the police, even if they do prosecute in that area, unless the loss is so large it is worth reporting. They don't even want the public records of theft to exist. They have to assume that if the public heard of a $10,000 theft the impact to stock will cause the company to lose $200,000 more. They can't report theft.

Until the National Retail Federation and other such industry groups go drive the reality of theft through the thick skulls of the worthless Wall Street analysts, most of whom have never worked a day of retail in their lives and would be fired halfway through their first shift on a cash register. These morons have to understand that the industry is losing hundreds of billions of dollars and that unless they stop criticizing retailers that speak out and want the problem fixed the issue will never go away.

This store has made national attention this month, like the San Francisco Walgreens did last year. RAD stock is down 17% since the story broke couple weeks ago. CVS stock is flat in same time period. Walgreens stock is down single digit in same time period. No earnings announcements in the time period to affect stock prices. This shows again that the stock market does punish retailers when they hear publicly about shrink. How much more would they be down if they publicly confirmed what is obviously happening instead of the PR speak?
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