Rite Aid closing at least 63 stores

[buckguy]

Retail businesses seem very good at limping along for many, many years even if they're obviously shrinking. I think it's because of their ability to generate cash, which is probably what enables them to continue after they run out of working capital and go into bankruptcies. Only when you get really dumb ideas at the top (see BBB) do you get a rapid death sprial and even then you have businesses like Sears and KMart that stick around forever even in their abbreviated form. Rite Aid would be in better shape if it had stuck with the Eastern half of the country, but they seem stuck with where they've eneded up.

[SamSpade]

The Seattle Times has written about another Rite-Aid closure of a Bartell's. Most of the story is recap of the issues customers have encountered post-merger, though no mention of the pharmacy transition issue beyond a cranky customer that moved their prescription business to Costco.

[norcalriteaidclerk]

The Seattle Times has written about another Rite-Aid closure of a Bartell's. Most of the story is recap of the issues customers have encountered post-merger, though no mention of the pharmacy transition issue beyond a cranky customer that moved their prescription business to Costco.

The location in question is in the South Lake Union neighborhood(1001 Mercer),while a corporate spokesperson noted that 'no further Bartell closures are anticipated' that frequently-quoted statement has yet to hold true.That leaves the Bartell chain down to 63 locations on top of 2216 namesake RAD locations(California stands at 475 which is now accurately reflected as there is just a single listing for Winchester French Valley which for some reason had separate listings for store and pharmacy previously,elsewhere a pharmacy-less 24-hour location opened earlier this year in Westminster,Maryland).

Based on a review of their current ad,I noticed the expanded food selection in the Bartell ad(not just Northwest-made product).If the current RAD corporate regime was smart they would expend grocery selection(and even restore at least some previously-discontinued general merchandise product)at their West Coast locations(if not chainwide).Even Walgreens(which traditionally has a smaller average store size than its industry peers)still carries more general merchandise and(to an extent)groceries than the namesake RAD locations.

Earlier today RAD stock hit an all-time low at $1.50 which would be 7.5 cents at pre-reverse split rates.

[storewanderer]

Retail businesses seem very good at limping along for many, many years even if they're obviously shrinking. I think it's because of their ability to generate cash, which is probably what enables them to continue after they run out of working capital and go into bankruptcies. Only when you get really dumb ideas at the top (see BBB) do you get a rapid death sprial and even then you have businesses like Sears and KMart that stick around forever even in their abbreviated form. Rite Aid would be in better shape if it had stuck with the Eastern half of the country, but they seem stuck with where they've eneded up.

West Coast is an excellent region for Rite Aid. Thrifty/Payless was an excellent asset to purchase. Thrifty in particular was a great fit for Rite Aid with perfect 15k-20k square foot stores that didn't have the best reputation but still did good sales volume. Payless was a problem with historically well run/well assorted stores and too big of stores specifically in CA/OR, but a lot of Payless was also actually appropriate sized (many WA Stores were former Pay N Saves which were Thrifty stores; CO/ID/UT were old Oscos that were pretty small). Rite Aid has performed very well in CA, OR, and WA. When you keep in mind that CA/OR/WA was 85%+ of the west coast store base historically, that was the important space for them. UT/ID were few stores and always marginal. NV was largely an unfortunate failed late 90's expansion attempt as Payless brought them 13 NV Stores then they built about 25 new stores and closed/sold them all, and CO did not do well historically but was doing fine when they let Walgreens have it. I do think you are correct that the core east coast operation in PA, MD, VA, NY, etc is/was (before being sold in parts) successful. I think MI is a mix but generally holds its own.

There were also a few other failed late 90's expansion attempts by Rite Aid after buying Thrifty/Payless out west: Colorado Springs, CO was an organic expansion attempt that tanked quickly; San Francisco was an organic expansion attempt that in my view did okay but they still got rid of those stores to Walgreens, and Las Vegas/Reno as I mentioned above.

My view is Rite Aid's problem was the stuff in the South and other middle areas. The stores in places like GA, AL, KY, LA, etc. clearly did not perform well and were deeply troubled. That is why I was so excited when they dumped what I considered to be garbage stores off on Walgreens. I felt like they were left with some of their best stores. Then that new CEO and COO proceeded to take the west coast stores and cut a ton of merchandise out, kill sales, and quit capex of investing in the store base. But they had plenty of money for a stupid new logo. There were much more pressing issues for Rite Aid to address than the logo.

[Romr123]

They do well in MI because they have both store density in multiple metros and wide coverage of the lower peninsula (they were also in the UP but sold most of those off to Walgreens). They acquired reasonably well-run assets (Perry Drug) which were pretty evenly distributed throughout the state.

I'm kind of intrigued by how they seem to also do well in Cleveland, with two additional local drug competitors (CVS/Walgreen/Rite Aid as well as Marc's and Discount Drug Mart, as well as Walmart and Meijer.)


I wonder if Meijer's strength in Michigan further expands the mind of consumers here into where to shop (moves the customer away from "only two choices-duopoly-thinking (CVS/Walgreen; Walmart/Kroger) into a more multilateral thought process (groceries---Meijer/Kroger/Spartan; drugs CVS/Walgreen/Rite Aid/WM/Kroger/Meijer) etc etc. CVS seems to get more than its share of business in metro Detroit(doubtless from Caremark ), but they have minimal penetration north of M59.

[BillyGr]

I do think you are correct that the core east coast operation in PA, MD, VA, NY, etc is/was (before being sold in parts) successful. I think MI is a mix but generally holds its own.

The eastern (or northeastern) areas got a fairly large boost in stores when Rite Aid took over a big chunk of Eckerd and all of Brooks (since they had bought those Eckerd stores from JC Penney, while others more southern were sold to CVS).

They obviously closed a number of them at that time, since there were some that overlapped (like across the street from each other), but Rite Aid did keep many of the Eckerd stores (and even more of the Brooks, as some of those states had no existing Rite Aid stores).

The selling off to Walgreens, on the other hand, made somewhat less sense. For instance, in one area there were 4 Rite Aid stores within a few miles of each other. They sold 3 of them (which are all on the same road), but kept one on a different road as Rite Aid, so now that is one of (I believe) only 2 in the county - both on different sides of the same city. Seems it would have made more sense to keep 2 and sell 2, or something similar, but then again...

[storewanderer]

They do well in MI because they have both store density in multiple metros and wide coverage of the lower peninsula (they were also in the UP but sold most of those off to Walgreens). They acquired reasonably well-run assets (Perry Drug) which were pretty evenly distributed throughout the state.

I'm kind of intrigued by how they seem to also do well in Cleveland, with two additional local drug competitors (CVS/Walgreen/Rite Aid as well as Marc's and Discount Drug Mart, as well as Walmart and Meijer.)


I wonder if Meijer's strength in Michigan further expands the mind of consumers here into where to shop (moves the customer away from "only two choices-duopoly-thinking (CVS/Walgreen; Walmart/Kroger) into a more multilateral thought process (groceries---Meijer/Kroger/Spartan; drugs CVS/Walgreen/Rite Aid/WM/Kroger/Meijer) etc etc. CVS seems to get more than its share of business in metro Detroit(doubtless from Caremark ), but they have minimal penetration north of M59.

I think Cleveland was a store swap involving CVS back in the 90's where CVS left Cleveland and Rite Aid left some other metro. This may be my imagination.

The more competition and choices, the better, for consumers. Embracing that thought in MI will make it a good environment for consumers for years to come.

The Duopoly thing is never a good thing.

[buckguy]

They do well in MI because they have both store density in multiple metros and wide coverage of the lower peninsula (they were also in the UP but sold most of those off to Walgreens). They acquired reasonably well-run assets (Perry Drug) which were pretty evenly distributed throughout the state.

I'm kind of intrigued by how they seem to also do well in Cleveland, with two additional local drug competitors (CVS/Walgreen/Rite Aid as well as Marc's and Discount Drug Mart, as well as Walmart and Meijer.)


I wonder if Meijer's strength in Michigan further expands the mind of consumers here into where to shop (moves the customer away from "only two choices-duopoly-thinking (CVS/Walgreen; Walmart/Kroger) into a more multilateral thought process (groceries---Meijer/Kroger/Spartan; drugs CVS/Walgreen/Rite Aid/WM/Kroger/Meijer) etc etc. CVS seems to get more than its share of business in metro Detroit(doubtless from Caremark ), but they have minimal penetration north of M59.

I think Cleveland was a store swap involving CVS back in the 90's where CVS left Cleveland and Rite Aid left some other metro. This may be my imagination.

The more competition and choices, the better, for consumers. Embracing that thought in MI will make it a good environment for consumers for years to come.

The Duopoly thing is never a good thing.

CVS came to Cleveland via its sundry stores in malls in the 70s, as they did in many places. They merged with Revco (HQed there) in the 90s. Revco earlier had tried to merge with RiteAid. Instead, RiteAid bought Gray Drug (also HQed in Cleveland) which owned DrugFair in DC. Revco was saddled with debt from an unsuccessful leveraged buyout. Gray was owned by Sherwin-Williams which had engineered a friednly buyout to avoid takeover by an outside investor. CVS got stuck with the debt but also gained a farflung footprint--Revco had many stores in teh Southeast and Southwest.

Lane Drug, HQed in Toledo owned People's Drug in the DC area. People's was spunoff to a Canadian subsidiary of BATUS (which owned US retailers including Saks, Gimbels, and Marshall Field) and later sold to CVS. Lane was bought by RiteAid. There probably were overlaps between the former Gray and Lane operations---both had sizable numbers of stores in the smaller NE Ohio cities like Canton and Youngstown, while Gray was a small factor in Toledo. Revco was a minor factor in both of those regions, too.

Domination of often large markets by one or two drug store chains is nothing new and predates all the consolidation---Thrifty & SavOn in LA, Walgreen's and Osco in Chicago (with Osco being one of the few true successes of a supermarket-based chain), Duane Reade in NYC, Thrift and Sun in Pittsburgh, People's (a true juggernaut) and Drug Fair in DC, Hook and Hague in Indianapolis, Lane dominated Toledo with the a few outsiders like Gray and Revco having peripheral operations----it's not hard to compile a list. Indies were a bigger factor in the old days but they began to fade in the 70s and even before then had gone for niches ignored by chains like delivery or compounding. A truly robust competitive environment where you had more than two large chains and some successful smaller ones was more of a rarity than you'd imagine. DC had a successful thrid chain in Dart which was owned by the Haft family, but they sold it after it had spawned more profitable ventures like Trak Auto.

[BillyGr]

Domination of often large markets by one or two drug store chains is nothing new and predates all the consolidation---Thrifty & SavOn in LA, Walgreen's and Osco in Chicago (with Osco being one of the few true successes of a supermarket-based chain), Duane Reade in NYC, Thrift and Sun in Pittsburgh, People's (a true juggernaut) and Drug Fair in DC, Hook and Hague in Indianapolis, Lane dominated Toledo with the a few outsiders like Gray and Revco having peripheral operations----it's not hard to compile a list. Indies were a bigger factor in the old days but they began to fade in the 70s and even before then had gone for niches ignored by chains like delivery or compounding. A truly robust competitive environment where you had more than two large chains and some successful smaller ones was more of a rarity than you'd imagine. DC had a successful thrid chain in Dart which was owned by the Haft family, but they sold it after it had spawned more profitable ventures like Trak Auto.

Basically, the only difference is instead of having two (or maybe three) different chains in each area, now it's the same two (or three) chains in most areas.
No real difference in the competitiveness, just the names used

[norcalriteaidclerk]

They do well in MI because they have both store density in multiple metros and wide coverage of the lower peninsula (they were also in the UP but sold most of those off to Walgreens). They acquired reasonably well-run assets (Perry Drug) which were pretty evenly distributed throughout the state.

I'm kind of intrigued by how they seem to also do well in Cleveland, with two additional local drug competitors (CVS/Walgreen/Rite Aid as well as Marc's and Discount Drug Mart, as well as Walmart and Meijer.)


I wonder if Meijer's strength in Michigan further expands the mind of consumers here into where to shop (moves the customer away from "only two choices-duopoly-thinking (CVS/Walgreen; Walmart/Kroger) into a more multilateral thought process (groceries---Meijer/Kroger/Spartan; drugs CVS/Walgreen/Rite Aid/WM/Kroger/Meijer) etc etc. CVS seems to get more than its share of business in metro Detroit(doubtless from Caremark ), but they have minimal penetration north of M59.

I think Cleveland was a store swap involving CVS back in the 90's where CVS left Cleveland and Rite Aid left some other metro. This may be my imagination.

The more competition and choices, the better, for consumers. Embracing that thought in MI will make it a good environment for consumers for years to come.

The Duopoly thing is never a good thing.

That midwest store swap(happened around 2000-2001 IIRC)involved RAD exiting Cincinnati and Columbus(RAD did keep a Middletown location until last year's mass closures)and CVS exiting Toledo(which they reentered in recent years)as well as other smaller metros in Ohio and/or Michigan(I believe Canton/Akron and/or Flint/Saginaw/Bay City IIRC).

Additionally on top of the company refusing to rule out further closures two more locations quietly bit the dust this past week:In addition to an unidentified closure in Ohio(194 remaining locations in the Buckeye State),California is now down to 474 stores:the loss of 13822 Brookhurst(early 1960's Thrifty based on style of round drop-down air diffuser and intact brick exterior in the back,shares a center with an Asian supermarket and a beauty supply store in a junior anchor space)leaves the city of Garden Grove with two locations remaining(12897 Harbor and 11961 Valley View which itself is also a vintage mid-1960's former Thrifty)which is half as many locations the city had 16 months ago(12491 Valley View closed in April of last year,while another early 1960's former Thrifty at 9661 Chapman closed in early 2010).Of the seven Golden State closures that have occurred halfway through 2023,four are in the Los Angeles media market(so far the only California metro area to suffer multiple 2023 closures which pales in comparison to the November 2021-November 2022 period in which California as a whole lost a sobering 50 RAD locations).

If only RAD can keep both the namesake store count above 2200(and the California store count above 470)and the Bartell store count above 60 when the 2024 calendar year rolls around,then there could be hope of a turnaround.