Rite Aid closing at least 63 stores

[ClownLoach]

Going back to the recent Furness acquisition in Kelso, WA for a minute. The store was already closed on December 1st, with no closing sale of any kind, and the store sat there, fully stocked, for almost two weeks. Greeting cards were among the items visible from outside. It has been only in the last week that the store has finally been emptied out, and since I did not see the process, can't say if the merchandise ended up at Rite Aid, Hi-School Pharmacy (who was operating the store previously) or if it was sold or thrown out. I did find it very odd though that they did not at least hold a closing sale, but the store might not have had enough non-pharmacy foot traffic to justify it.

I do know a couple friends who used Furness for prescriptions that plan to switch to either Safeway or Walmart though, as they are not happy with how Rite Aid is handling this and one commented on the empty shelves he saw at the Kelso Rite Aid store, and questioned the future of the area stores.

These empty shelves.... they have got to do something... it is really making customer confidence nosedive.

Typically when you do a file buy you do some things to make the store especially appealing/welcoming for the new customers coming through. Brighten it up, give the floors a good wax, throw a table near pharmacy with some pill holders, magnets, brochures about vaccines/services offered other than prescriptions, etc.

I am guessing the items ended up with Hi School Pharmacy to move elsewhere or sell to some salvage operator/donate.

This is what I was saying as well. Considering it's a planned bankruptcy and they did a good job lining up the key creditors who could derail the exit, they have taken a very hands off approach to marketing. They should be advertising that there is a "bright future ahead at Rite Aid" (especially in stores where they know they're staying open), and doing all the customer outreach you're describing. It is obvious that they are trying to pretend that the bankruptcy filing didn't even happen and releasing small batches of closures in an effort to diminish news headlines, but look at the stink it's causing in Seattle where every time there's so much as a lost Bartell cart they're making headlines. They definitely need to make sure go forward stores/go forward markets are fully stocked and stores looking fabulous.

[storewanderer]

This is what I was saying as well. Considering it's a planned bankruptcy and they did a good job lining up the key creditors who could derail the exit, they have taken a very hands off approach to marketing. They should be advertising that there is a "bright future ahead at Rite Aid" (especially in stores where they know they're staying open), and doing all the customer outreach you're describing. It is obvious that they are trying to pretend that the bankruptcy filing didn't even happen and releasing small batches of closures in an effort to diminish news headlines, but look at the stink it's causing in Seattle where every time there's so much as a lost Bartell cart they're making headlines. They definitely need to make sure go forward stores/go forward markets are fully stocked and stores looking fabulous.

I'd like to see better retention efforts at the closing stores. It is sticky because they are in so many cases selling prescriptions to competitors. I think they may be legally barred from, in a store where they sell prescriptions to CVS/Walgreens, posting a sign "the next nearest Rite Aid is at..." or doing coupons etc. to direct people to the next nearest Rite Aid (Walgreens did a lot of that when they closed hundreds of Rite Aid units- printed/issued coupons to the nearest Walgreens).

My view is they are not handling things particularly well. Employees are concerned about the future and communication does not appear to be as good as it should be. I expect but this is pure conjecture on my part that at the regional level they are going to be doing some restructuring, given how some districts have been gutted of store count (like the district with the stores that used to be around me- I think now 9 stores have closed or been announced to close in that district). So at this point I don't think anyone really knows what the future holds.

I think Bartell is a sticky topic. In hindsight, that acquisition was an error. Not a fatal error but an unnecessary distraction.

[BillyGr]

They should be advertising that there is a "bright future ahead at Rite Aid" (especially in stores where they know they're staying open), and doing all the customer outreach you're describing.

There might be a couple issues with that.

One being stores that they were negotiating on and not sure that they will or won't keep, depending on how the negotiations go.

Two being that if they advertise as such for the stores they know they want to keep no matter what the negotiations bring, that would tip off the landlords and they could simply not offer anything, knowing that the store will stay no matter what.

So, it would only work in stores that have already undergone negotiations and settled on a new, better deal, though we don't really know if that is a few or a large amount.

I'd like to see better retention efforts at the closing stores. It is sticky because they are in so many cases selling prescriptions to competitors. I think they may be legally barred from, in a store where they sell prescriptions to CVS/Walgreens, posting a sign "the next nearest Rite Aid is at..." or doing coupons etc. to direct people to the next nearest Rite Aid (Walgreens did a lot of that when they closed hundreds of Rite Aid units- printed/issued coupons to the nearest Walgreens).

Might also be a case where the buyer is willing to offer them a higher price for the files, they buy with an agreement that they won't try to "steal back" the customers by directing them to other nearby Rite Aid stores?

If so, the question would be do they get more return from the higher buyout price or from getting some people to stay (hoping that those who stay are the more profitable ones and not those with prescriptions that are money losers or just break-even).

Obviously, in the Walgreens case, they had already bought the Rite Aid files and were just combining those stores into others they already had, so not quite the same issue

[storewanderer]

They should be advertising that there is a "bright future ahead at Rite Aid" (especially in stores where they know they're staying open), and doing all the customer outreach you're describing.

There might be a couple issues with that.

One being stores that they were negotiating on and not sure that they will or won't keep, depending on how the negotiations go.

Two being that if they advertise as such for the stores they know they want to keep no matter what the negotiations bring, that would tip off the landlords and they could simply not offer anything, knowing that the store will stay no matter what.

So, it would only work in stores that have already undergone negotiations and settled on a new, better deal, though we don't really know if that is a few or a large amount.

I'd like to see better retention efforts at the closing stores. It is sticky because they are in so many cases selling prescriptions to competitors. I think they may be legally barred from, in a store where they sell prescriptions to CVS/Walgreens, posting a sign "the next nearest Rite Aid is at..." or doing coupons etc. to direct people to the next nearest Rite Aid (Walgreens did a lot of that when they closed hundreds of Rite Aid units- printed/issued coupons to the nearest Walgreens).

Might also be a case where the buyer is willing to offer them a higher price for the files, they buy with an agreement that they won't try to "steal back" the customers by directing them to other nearby Rite Aid stores?

If so, the question would be do they get more return from the higher buyout price or from getting some people to stay (hoping that those who stay are the more profitable ones and not those with prescriptions that are money losers or just break-even).

Obviously, in the Walgreens case, they had already bought the Rite Aid files and were just combining those stores into others they already had, so not quite the same issue

I am hoping this lease renegotiation program is about to come to an end and they can establish the stores still open as go forward stores and put some better focus on them.

This store closure program the way they are engaging in it, it takes a lot of resources. It is taking a lot of resources to close all of these stores via a self-liquidation/pack up process. Rather than letting the staying open stores focus on handling their needs those stores are getting hit with a ton of pack up merchandise from closed stores that may not necessarily be sellable (expired, damaged, not sold at that store, etc.). Then the regional management is leading the closing sale/pack up process (as opposed to a liquidator) so they are focused on that given the number of stores closing and not having the time to put into staying open stores that those stores should be 100% of focus since they are what is really important. It takes a lot of HR resources to handle the firings of employees who do not transfer to another store or where transfers aren't an option, move employees around, bump less senior employees to make way for more senior employees from closed stores, etc. Then there is the back end side like having the systems people come in and take out all of the registers, pharmacy computers, etc. much of which is relatively new equipment.

So as I see it until they are done with this store closing program their resources are largely tied up in it.

[storewanderer]

Looks like the store closing department had a nice Christmas and is back in action.

Placerville Fair Lane closing January 8
Not a surprising closure. Surprising it stayed open this long.

Martinez closing January 10
Surprising closure.

Interesting two stores remain in Oakdale.

Store count still sits at 1,818 so it does appear they did not close anything the past week.

[bryceleinan]

Well, with the Hermiston, OR store closing, the Bi-Mart pharmacy closure looms larger for Oregon. This leaves Hermiston with Walmart and Safeway.

I'm starting to wonder if Albertsons is going to make another play for whatever remains of RAD if their merger with Kroger gets blocked. It seems that they're starting to close stores in overlapping areas, at least on the West Coast (with the exception of Gardnerville). Not sure if that would be an option, although, I know that the bankruptcy court can order things that seem bizarre (like the whole Haggen deal).

[babs]

Well, with the Hermiston, OR store closing, the Bi-Mart pharmacy closure looms larger for Oregon. This leaves Hermiston with Walmart and Safeway.

I'm starting to wonder if Albertsons is going to make another play for whatever remains of RAD if their merger with Kroger gets blocked. It seems that they're starting to close stores in overlapping areas, at least on the West Coast (with the exception of Gardnerville). Not sure if that would be an option, although, I know that the bankruptcy court can order things that seem bizarre (like the whole Haggen deal).

I don't see any scenario where Albertsons buys Rite Aid beyond buying pharmacy files.

[storewanderer]

Well, with the Hermiston, OR store closing, the Bi-Mart pharmacy closure looms larger for Oregon. This leaves Hermiston with Walmart and Safeway.

I'm starting to wonder if Albertsons is going to make another play for whatever remains of RAD if their merger with Kroger gets blocked. It seems that they're starting to close stores in overlapping areas, at least on the West Coast (with the exception of Gardnerville). Not sure if that would be an option, although, I know that the bankruptcy court can order things that seem bizarre (like the whole Haggen deal).

Albertsons can't do anything. They are stuck in this merger with Kroger. It is going to take months before they will be "freed" from it if it does not go through.

Cerberus and friends who control Albertsons WANT the merger with Kroger. They want out of Albertsons and want Albertsons sold. This is their decision to sell their company, they aren't going to suddenly throw down more money for Rite Aid. That ship sailed when Bob Miller left Albertsons; he was the one who could have united the two chains as he worked with both of them. However that merger was also a bad idea due to all of the overlap (which is still largely a problem). Now Bob Miller is gone from Albertsons, and helping out competitors like Pattison Group and Save Mart.

Rite Aid does not have months to wait for Albertsons. Rite Aid needs to move forward with its bankruptcy plan and quickly sell itself/emerge. They are burning tons of money every week on advisory/legal fees; once they are through selling off Elixr (which is just about done), closing stores, rejecting leases, and arranging new finances, it is time to emerge; the longer they stay in bankruptcy, the less likely they will survive.

And it is a good thing Albertsons can't do anything because their pricing in the drug category is horrendous even compared to the very high CVS/Rite Aid/Walgreens pricing- the pricing at the drug chains on drug categories looks like giveaway bargains compared to what Safeway charges.

Unfortunately a slice up and divide between Walgreens and CVS would be better for consumers than Albertsons getting Rite Aid. There is still a ton of overlap all over the west.

The problem is places like, say, Quincy, Grass Valley, or Susanville. Yes, you have Rite Aid there with pharmacy and Safeway in those towns with no pharmacy. So in theory you are not reducing pharmacy competition. But what about the rest of the store and the competition the consumer benefits from by having these two competing front end programs, two competing ads every week, two competing sets of liquor sales, etc.? Bring the chains together and the consumer loses that.

[storewanderer]

19 additional closures were announced today:
~ttps://www.reddit.com/r/RiteAid/comments/18se3 ... _closures/

Looks like the last store in the center of downtown Philadelphia, previously a 24 hour store, is closing...

Also the Bartell over by SeaTac Airport that has a Walgreens freestanding in the same parking lot is finally closing. Not sure how that happened. Amazing it lasted this long. There was a situation like that involving a Rite Aid somewhere in Salt Lake City suburbs too; of course that was great when Walgreens took the stores over, that was an easy Rite Aid closure.

[mbz321]

19 additional closures were announced today:
~ttps://www.reddit.com/r/RiteAid/comments/18se3 ... _closures/

Looks like the last store in the center of downtown Philadelphia, previously a 24 hour store, is closing...

Damn, also 11097 in the suburbs which I am familiar with...a very old strip center store that dates back to Thrift Drug ownership, that somehow held on all these years despite a Walgreens directly across the street, a Wegmans pharmacy, and a CVS inside a nearby Target. It seems like all these old strip center stores are getting the axe.