Rite Aid closing at least 63 stores

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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

The Sacramento closures have been a bloodbath. Fair Lane is in absolutely awful shape. I have photos I probably didn't post here since Kiefer stole the show that day. Fair Lane has so much empty floor space/empty aisles and the way they've done it makes no sense. For instance remove one side of the aisle with laundry detergent (empty shelves on the left, full shelves on the right), same with paper products, and a couple other things. Back wall is mostly empty shelves, some clearance items very creatively spread out. Aside from those negative comments Fair Lane is clean, neat, and well stocked in terms of having SKUs in stock that Rite Aid sells (probably due to lack of customers) and seems to have good employees (both of them). The Big Lots next to Fair Lane did a full remodel though. The center has more traffic now than it did for a while but is still a dead center. It is too bad Rite Aid can't carve down to 8k square feet which is all they need for current mix, and another tenant take their other 32k square feet that would draw more traffic to the center.

Also there seems to be a directive this week to remove some endcaps. Walgreens did this directive about 6 years ago in medium (remove endcaps that face the back wall, keep all others) and low volume stores.

Gardnerville has 100% of empty shelves covered with something- new DSD clothing, big plastic buckets, etc. At least there is something on the shelves.
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Re: Rite Aid closing at least 63 stores

Post by buckguy »

storewanderer wrote: November 16th, 2022, 11:30 pm You have validated my point right there- before COVID, these drugstore chains were still actively opening new stores in big cities. Now they are closing stores. CVS still has hundreds of store closures planned (recall they announced they will be closing 900 stores over a 3 year period and we are somewhere in the middle of that period now).

Were they saturated? Yes. Rite Aid being the lowest market share chain with the least urban exposure is of course the weakest link and is going to be first to go in these types of environments. Rite Aid wanted to sell a lot more stores to Walgreens in NY than they did but they kept quite a few stores due to FTC concerns. It is possible a lot of these closures were stores they planned to sell but then didn't in order to push the deal through.

Those independent drugstores you refer to are usually small operations primarily pharmacy and OTC items. I know this varies and they are all different but they are not moving even close to the front end assortment and volume of any of the chain drugstores.

Those new concepts like Foxtrot further hurt the drugstores as they eat into the convenience food business the drugstores do. And that convenience food business historically has been a very heavy business for big city drugstores. Have you been to a flagship Walgreens? They dedicated a lot of space to prepared food; even had in-store sushi preparation and a lot of bakery/deli items from local vendors. Of course some of those flagship Walgreens have closed too and others way scaled back the fresh food offer.
The three major chains overbuilt in cities and suburbs and have been closing stores in the suburbs----overbuilt retail in the suburbs is kindof an old story at this point. As for the urban part---many central cities grew 2000-2020 with new neighborhoods being created and older ones having their retail districts redeveloped, so there were new opportunities at a time when suburban areas were saturated. In DC, the "new" stores generally opened 10 or more years ago, that was true of CVS, Walgreen, and RiteAid. The only more recent store near me were replacement Rite Aid turned Walgreen, a replacement CVS, and a CVS that consolidated two locations. The much written about Eighth Avenue Rite Aid in NYC was opened almost 10 years ago and that area had filled in with new or renovated hotels, so tourists would have been a big part of their target audience.

Stores like Foxtrot and Streets stock a wider variety of food items, but don't sell the household/cleaning goods that drug stores sell, so the overlap is minimal. A bigger problem for drug stores is that their non-core areas include a lot of stuff that people either don't buy anymore or are buying much less often: greeting cards and office/school supplies, for example. CVS, in particular, has greatly shrunk the space for these. Seasonal items also seem to get less space these days, esp. at CVS. Grocery items like bottled water and detergent get used as promotions to bring people into the store, so I doubt they are making much on those. The "little bit of everything" model of chain drug stores is mostly a series of historical accidents (drug stores being exempt from blue laws, drug stores being among the few chain businesses with late hours, early adoption of refrigeration, etc.). They've had to evolve in different ways but it may be that they will have to junk more of that model and do something very different. In most of the the world, a drug store tends to be a crowded little pharmacy that also sells over the counter medicines and maybe something like sickroom supplies---that model faces competition from hypermarts, especially where many items that require a prescription here don't need one, so drug stores have to deal with threats to their existence elsewhere.

The flagship Walgreen stores opened about 10 years ago--both are still with us. Neither has ever done big volumes. The one at Union Station does well enough to be outlasting the nearby food court.

As for the "urban hellhole" meme......you'd be surprised how well cities are doing. I was in Chicago last month for a memorial service and the streets were packed on and around Michigan Avenue day and night. There are few vacancies and the area was livelier for a non-holiday period than I would have expected (I've lived in Chicago and visited there a few dozen times). The picture was similar in the Lincoln Park-Lakeview areas and not much different than when I was around there shortly before COVID. As for NYC, I've been there a couple times this year and will be back next month---the tourists have been returning to places like Times Square and neighborhoods like the Upper West Side are doing fine. Vacancies related to COVID in the DC downtown area have been filling up and street life has returned to places like 14th St and Adams Morgan. The two exceptions have been Chinatown, which depends on the convention trade---it's only recently picked up and Georgetown, which depends a lot on foreign tourists in particular---that trade has come back but not so much the higher end foreign travelers.
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

buckguy wrote: November 20th, 2022, 8:11 am
Stores like Foxtrot and Streets stock a wider variety of food items, but don't sell the household/cleaning goods that drug stores sell, so the overlap is minimal. A bigger problem for drug stores is that their non-core areas include a lot of stuff that people either don't buy anymore or are buying much less often: greeting cards and office/school supplies, for example. CVS, in particular, has greatly shrunk the space for these. Seasonal items also seem to get less space these days, esp. at CVS. Grocery items like bottled water and detergent get used as promotions to bring people into the store, so I doubt they are making much on those. The "little bit of everything" model of chain drug stores is mostly a series of historical accidents (drug stores being exempt from blue laws, drug stores being among the few chain businesses with late hours, early adoption of refrigeration, etc.). They've had to evolve in different ways but it may be that they will have to junk more of that model and do something very different. In most of the the world, a drug store tends to be a crowded little pharmacy that also sells over the counter medicines and maybe something like sickroom supplies---that model faces competition from hypermarts, especially where many items that require a prescription here don't need one, so drug stores have to deal with threats to their existence elsewhere.

The flagship Walgreen stores opened about 10 years ago--both are still with us. Neither has ever done big volumes. The one at Union Station does well enough to be outlasting the nearby food court.

As for the "urban hellhole" meme......you'd be surprised how well cities are doing. I was in Chicago last month for a memorial service and the streets were packed on and around Michigan Avenue day and night. There are few vacancies and the area was livelier for a non-holiday period than I would have expected (I've lived in Chicago and visited there a few dozen times). The picture was similar in the Lincoln Park-Lakeview areas and not much different than when I was around there shortly before COVID. As for NYC, I've been there a couple times this year and will be back next month---the tourists have been returning to places like Times Square and neighborhoods like the Upper West Side are doing fine. Vacancies related to COVID in the DC downtown area have been filling up and street life has returned to places like 14th St and Adams Morgan. The two exceptions have been Chinatown, which depends on the convention trade---it's only recently picked up and Georgetown, which depends a lot on foreign tourists in particular---that trade has come back but not so much the higher end foreign travelers.
Go to Seattle, Portland, or San Francisco and tell me how well those cities are doing; recovery is nowhere close. Chicago and NYC are well on the way to full recovery. DC will recover fully once remote work ends and also bringing back student traffic will also help there (trips, interns, etc.).

CVS had an initiative going back 10-15 years to "open stores where the people go." This continued new openings even in recent years/before COVID. This meant tourist type stores, sometimes without a pharmacy, sometimes without running the weekly ad, etc. These stores were segmented to tourists based on their offer, hours, etc. They needed to be within sight of mass transit (be it light rail, a cable car station, whatever) and preferably within sight of a tourist attraction. This was in response to what was a perceived success Walgreens was having with locations that heavily catered to tourists (the success of Walgreens on the Las Vegas Strip is something some CVS management just could never get over and thought they could replicate from San Francisco to Denver to Miami Beach).

Something is causing all of these drugstores to close. If it isn't Foxtrot/like formats taking food business away, theft, and these cities are doing so well, what is it? They just saturated the areas?

Rite Aid has cut a ton of SKUs in those non core categories you refer to. At this point in non core categories like office supply, hardware, toys, and such, they have less SKU depth than CVS has and WAY less than Walgreens (though Rite Aid does have more SKUs in pet than the other two, by far). Walgreens has never been interested in the pet category.

Based on what you are saying it sounds like Rite Aid may be doing all of the right things. Or at least responding to market conditions for drugstores. They've cut non-core categories out significantly and in some cases entirely. They are moving to a small model (albeit only in rural towns so far) that is much like drugstores overseas with a pharmacy counter and a few aisles of core OTC/Vitamin/First Aid items.
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Re: Rite Aid closing at least 63 stores

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Truckee Rite Aid continues to be very neat inside and well stocked. It is still only open 9-6 every day and pharmacy is closed on weekends. They have basically run off most of the customers from this store, it used to be very busy, now it only has a few customers at a time. I only saw one employee working who appeared to be a clerk, so there must be a manager somewhere else.

Safeway and CVS Pharmacies in Truckee are open 7 days a week, and have lines of customers when Rite Aid is closed.

This time I decided to go over to Truckee CVS. I really hate to say all of this. But I have to be objective here. Truckee CVS, is open until 11 PM. It is very clean, and very well stocked for a CVS. It is run by a former Sav-On District Manager and Store Manager. It has more general merchandise like fishing items, home appliance items, toys, and expanded cosmetics that most CVS do not have. It has more liquor than a typical CVS. The store is well staffed with friendly employees on the front end (pharmacy looked short staffed and with a slow line). Truckee is a place with high front end sales potential so front end is important in locations like these.

Rite Aid used to be the busier of the two stores in Truckee. Rite Aid continuing to close at 6 PM daily, continuing to have pharmacy closed on Saturday and Sunday, when both Safeway and CVS can open pharmacy on Sunday, I don't know. It starts to feel like the Rite Aid building is a waste of space and something better or more useful could go into that building that would better serve the community. Perhaps Rite Aid could relocate to a 5k square foot strip mall space (there are some open right next to their current store) and continue with this Monday-Friday pharmacy that closes early.
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Re: Rite Aid closing at least 63 stores

Post by norcalriteaidclerk »

The aisle markers in the Craigsville test store are very similar to the remodeled 136 North 63rd store in Philly which itself otherwise has a similar interior scheme as the various test remodeled concept stores(first ones being in etters,pa and in Littleton, NH).So far the only California appearance of the 'whole health' concept format is in Camarillo which downside relocated within the same center (http://www.camarillovillagesquare.com) from a later(80's-ish) payless building, however online photos remain lacking other than the thrifty counter which has something that I've never seen at any of their hand dip departments (counter seating).I'm still skeptical whether the Craigsville test format(just 3k square feet)will work anywhere out West.

As of today,half our laundry detergent is now in a locked case.

In any event,it would be interesting to see how the fy2022q3 fiscal report (expected the week preceding Christmas)turns out to say the least.

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Re: Rite Aid closing at least 63 stores

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norcalriteaidclerk wrote: November 25th, 2022, 7:00 pm The aisle markers in the Craigsville test store are very similar to the remodeled 136 North 63rd store in Philly which itself otherwise has a similar interior scheme as the various test remodeled concept stores(first ones being in etters,pa and in Littleton, NH).So far the only California appearance of the 'whole health' concept format is in Camarillo which downside relocated within the same center (http://www.camarillovillagesquare.com) from a later(80's-ish) payless building, however online photos remain lacking other than the thrifty counter which has something that I've never seen at any of their hand dip departments (counter seating).I'm still skeptical whether the Craigsville test format(just 3k square feet)will work anywhere out West.

As of today,half our laundry detergent is now in a locked case.

In any event,it would be interesting to see how the fy2022q3 fiscal report (expected the week preceding Christmas)turns out to say the least.

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I notice locked cases appeared at South Lake Tahoe for a small amount of laundry detergent also (Tide Pods) some months ago, and also a number of other assorted/random items throughout the store. There is no other store in South Lake Tahoe with anything locked up so I don't know what the issue at Rite Aid is. Well I think I know the issue and these locked cases weren't the answer to the issue. I think the issue has already been dealt with. Those have not appeared at most of the other rural stores. I don't understand how bottles/jugs of laundry detergent are getting shoplifted. I know we've seen this locked up at high theft Walgreens and Target Stores over the years too so this is obviously a problem item.

Those earnings reports sure come around quickly... let's see what magic they can work up this report. I am of the observation budgets are being cut across the board on labor (including warehouse) this month and the stores are really suffering. Store conditions are starting to remind me more and more of bad CVS. Messy, unkempt shelves, poorly stocked. This is not how Rite Aid did business until the past couple years. I say bad CVS because CVS seems to have cleaned up in my area and there are only a few locations of what I'd now call "bad CVS." Before, there were only a few locations that I would have called "good CVS." Amazing what a couple replacement stores for dumpy old Sav-Ons, a closure of a terrible former Longs, and some cosmetic remodels to the other stores can do...

I don't know how the tiny 3k square foot format would work out west but this is something they will need to bring up in the union negotiations also how staffing would look in that format. Unless they don't even want to consider bringing it out west. CVS has a small store like that out in Mt. Shasta (bought from some group) and may have a couple others up that way.
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Re: Rite Aid closing at least 63 stores

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So far the only 2 stores I've seen Rite Aid install new pinpads are Gardnerville and Placerville-Fair Lane...

Maybe they are on a test basis or something.

US Post Office has installed the same pinpads very recently.
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Re: Rite Aid closing at least 63 stores

Post by bryceleinan »

storewanderer wrote: November 26th, 2022, 12:32 am I don't know how the tiny 3k square foot format would work out west but this is something they will need to bring up in the union negotiations also how staffing would look in that format. Unless they don't even want to consider bringing it out west. CVS has a small store like that out in Mt. Shasta (bought from some group) and may have a couple others up that way.
Looking at the Mt Shasta CVS (guessing it is one of the old Ranch-style Shell stations that had a service center) and looking at the pictures of the new Rite Aid, that format would work well in places like Dayton and Yerington - small towns that could use an additional pharmacy, yet may not be able to support a full-line store.
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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

bryceleinan wrote: November 27th, 2022, 2:07 pm
storewanderer wrote: November 26th, 2022, 12:32 am I don't know how the tiny 3k square foot format would work out west but this is something they will need to bring up in the union negotiations also how staffing would look in that format. Unless they don't even want to consider bringing it out west. CVS has a small store like that out in Mt. Shasta (bought from some group) and may have a couple others up that way.
Looking at the Mt Shasta CVS (guessing it is one of the old Ranch-style Shell stations that had a service center) and looking at the pictures of the new Rite Aid, that format would work well in places like Dayton and Yerington - small towns that could use an additional pharmacy, yet may not be able to support a full-line store.
Mt. Shasta CVS came from some pharmacy group CVS bought and only retained a few locations. Whoever they were had a store in Susanville as well, but CVS opted to not keep it and those files got sold to Rite Aid.

I think the small format could work but I just wonder is there enough money in it? If you could get a high enough volume pharmacy it could be very lucrative in my opinion. I wonder what breakeven script volume on these small stores would be. Throw it down next to a Dollar General and you basically have all of the bases covered right there.
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Re: Rite Aid closing at least 63 stores

Post by norcalriteaidclerk »

It appears that the installation of new pinpads(apparently paused for now)is being done in random order without regards to store volume(Manzanita makes sense but Placerville Fair Lane?!)in a similar manner to when the exterior signs were changed on most of the stores: Sacramento Watt still had red signs as of at least July while otoh many of the 49 California locations that have closed since Halloween 2021(i.e.,5712 Folsom)did receive new exterior signs.

NYC Manhattan is now officially down to ten open locations remaining with 282 eighth avenue in Chelsea just closed.As it stands right now 481 California RAD locations remain(49 fewer than at this time 14 months ago),and hopefully the ship gets 'rited' in a timely enough manner that the Golden State will still have at least 470 RAD locations at this point twelve months from now.I however do find it interesting that some new items that we began carrying within the past month or two are already going on clearance.



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