Rite Aid closing at least 63 stores

[norcalriteaidclerk]

It's something like 2.5% of their store count. Not enough to read too much into it.

Good point, but closings are closings, and could be notable depending on the locations.

Might be some redundant locations in WA with the Bartell purchase.

Rite Aid has been closing locations for years and done quite a bit of pruning. I'm not sure why they even felt the need to announce they are in the middle of closing 63 locations as buckguy points out this is 2.5% of the store base and they have closed this many stores in other years without making an announcement like this. This isn't a 900 store closure program like CVS (10% of the store base, more if you take away the Target units before coming up with a percent).

I don't think a logo change means much as from the best I can tell they put that new logo on every single store. It is too bad they didn't take that money and build some new stores instead.

Not sure how the Rite Aid at 900 Sunrise in Roseville survives. Still has Longs interior and never any traffic. I figured that was a real dog of a store for Longs to offer it up back during that store trade where Longs gave Rite Aid OR/WA stores/files in exchange for the 6 Reno area Rite Aid units. Probably could be pretty nice with a remodel inside.... exterior looks modern.

Other significant coverage hole for Rite Aid is no store in Fairfield or Vacaville.

To tell you the truth first hand,5409 Sunrise hasn't exactly gotten any more love and care than 900 Sunrise from a capital expenditure standpoint(last remodeled in 2003 and that was into the Rite Choice decor package,not long after 900 Sunrise was opened by Longs,not to mention the somewhat deteriorating physical state of my store inside and out).While my store saw initial windfall from the 7900 Arcadia closure it did level off within a year,and nowadays customer traffic can be erratic(while there are its 'mad rush' moments certain days and/or hours aren't as busy as it seems).Apparently,we've been promised a remodel into their 'store of the future' format,but given the lack of a timetable I'm wary that it may be lip service to make the store look better than it really is(7900 Arcadia was promised a 2016 Wellness format remodel before the 2015 holidays,it obviously never materialized).While conventional wisdom states at least one location out of the 2 will survive(maybe both,knock on wood),it's entirely possible both 900 Sunrise and 5409 Sunrise could get axed(especially since news reports cite that 'additional closures beyond the announced 63 are possible')though especially in the case of the latter I obviously prefer it doesn't happen especially since it's still too soon after 7900 Arcadia(the 2018-2019 Sacramento closures did claim locations close to each other and created gaping coverage holes:both El Camino locations closed within months of each another in the first half of 2018 though neither was in a good neighborhood,3 of the 5 Elk Grove/Vineyard locations closed in February 2019 despite most being in a high growth area with EGF/Calvine citing 'anemic prescription volume' having the misfortune of competitors on every corner even factoring the Bel Air's pharmacy according to an old 7900 Arcadia colleague;even in southern California Canoga Park lost both RAD locations within months of each other around the same time).

As for Solano County,Rite Aid had a Vacaville location(1975-era PayLess on Nut Tree/Elmira which was never remodeled by RAD and maybe used half of its sales floor)until early 2009 and never had a Fairfield location(PayLess closed in the early-1990's before the merger with Thrifty).Only locations in the county are Benicia,Suisun City,and Vallejo.

[storewanderer]

To tell you the truth first hand,5409 Sunrise hasn't exactly gotten any more love and care than 900 Sunrise from a capital expenditure standpoint(last remodeled in 2003 and that was into the Rite Choice decor package,not long after 900 Sunrise was opened by Longs,not to mention the somewhat deteriorating physical state of my store inside and out).While my store saw initial windfall from the 7900 Arcadia closure it did level off within a year,and nowadays customer traffic can be erratic(while there are its 'mad rush' moments certain days and/or hours aren't as busy as it seems).Apparently,we've been promised a remodel into their 'store of the future' format,but given the lack of a timetable I'm wary that it may be lip service to make the store look better than it really is(7900 Arcadia was promised a 2016 Wellness format remodel before the 2015 holidays,it obviously never materialized).While conventional wisdom states at least one location out of the 2 will survive(maybe both,knock on wood),it's entirely possible both 900 Sunrise and 5409 Sunrise could get axed(especially since news reports cite that 'additional closures beyond the announced 63 are possible')though especially in the case of the latter I obviously prefer it doesn't happen especially since it's still too soon after 7900 Arcadia(the 2018-2019 Sacramento closures did claim locations close to each other and created gaping coverage holes:both El Camino locations closed within months of each another in the first half of 2018 though neither was in a good neighborhood,3 of the 5 Elk Grove/Vineyard locations closed in February 2019 despite most being in a high growth area with EGF/Calvine citing 'anemic prescription volume' having the misfortune of competitors on every corner even factoring the Bel Air's pharmacy according to an old 7900 Arcadia colleague;even in southern California Canoga Park lost both RAD locations within months of each other around the same time).

As for Solano County,Rite Aid had a Vacaville location(1975-era PayLess on Nut Tree/Elmira which was never remodeled by RAD and maybe used half of its sales floor)until early 2009 and never had a Fairfield location(PayLess closed in the early-1990's before the merger with Thrifty).Only locations in the county are Benicia,Suisun City,and Vallejo.

The 5409 Sunrise is such a busy intersection it doesn't seem like a good location to give up. Seems like a prime candidate to be downsized though in conjunction with a major remodel. I think after the robbery someone wanted 7900 Arcadia gone, also I think there were some theft issues with that location for some reason almost like it became targeted, this was back around 2010-2012 (not sure why... isn't a bad area). 7900 Arcadia while freestanding was not very visible; it was probably a real estate mistake in the first place; the Thrifty it replaced at 7000 Sunrise was in a busy shopping center and had better visibility.

900 Sunrise seems like its traffic could somewhat easily move over to Roseville Square. Still no idea why Rite Aid wanted that store or why Longs offered it up. I wish Rite Aid had kept one of the Reno/Sparks stores they traded away to Longs and passed on 900 Sunrise.

That group of closures in Elk Grove puzzled me also J Street and S? Street were disappointing given they were newer stores. At least F Street survives. The two El Camino closures were not a surprise, one was an outright scary store and the other just didn't seem to have much traffic though 99 Only was busy next to it. I think the high share of Kaiser around Sacramento messes with pharmacy volumes at the major chains to some extent. Walgreens has also closed a surprising number of stores around Sacramento.

I am a little surprised they do not yet have a recent remodel anywhere around Sacramento. I think despite the closures it is still an important market for them, the Rio Linda store was built not that long ago. Basically every management team Rite Aid has had, has built some new stores around Sacramento, even during the years they hardly open any stores.

[norcalriteaidclerk]

To tell you the truth first hand,5409 Sunrise hasn't exactly gotten any more love and care than 900 Sunrise from a capital expenditure standpoint(last remodeled in 2003 and that was into the Rite Choice decor package,not long after 900 Sunrise was opened by Longs,not to mention the somewhat deteriorating physical state of my store inside and out).While my store saw initial windfall from the 7900 Arcadia closure it did level off within a year,and nowadays customer traffic can be erratic(while there are its 'mad rush' moments certain days and/or hours aren't as busy as it seems).Apparently,we've been promised a remodel into their 'store of the future' format,but given the lack of a timetable I'm wary that it may be lip service to make the store look better than it really is(7900 Arcadia was promised a 2016 Wellness format remodel before the 2015 holidays,it obviously never materialized).While conventional wisdom states at least one location out of the 2 will survive(maybe both,knock on wood),it's entirely possible both 900 Sunrise and 5409 Sunrise could get axed(especially since news reports cite that 'additional closures beyond the announced 63 are possible')though especially in the case of the latter I obviously prefer it doesn't happen especially since it's still too soon after 7900 Arcadia(the 2018-2019 Sacramento closures did claim locations close to each other and created gaping coverage holes:both El Camino locations closed within months of each another in the first half of 2018 though neither was in a good neighborhood,3 of the 5 Elk Grove/Vineyard locations closed in February 2019 despite most being in a high growth area with EGF/Calvine citing 'anemic prescription volume' having the misfortune of competitors on every corner even factoring the Bel Air's pharmacy according to an old 7900 Arcadia colleague;even in southern California Canoga Park lost both RAD locations within months of each other around the same time).

As for Solano County,Rite Aid had a Vacaville location(1975-era PayLess on Nut Tree/Elmira which was never remodeled by RAD and maybe used half of its sales floor)until early 2009 and never had a Fairfield location(PayLess closed in the early-1990's before the merger with Thrifty).Only locations in the county are Benicia,Suisun City,and Vallejo.

The 5409 Sunrise is such a busy intersection it doesn't seem like a good location to give up. Seems like a prime candidate to be downsized though in conjunction with a major remodel. I think after the robbery someone wanted 7900 Arcadia gone, also I think there were some theft issues with that location for some reason almost like it became targeted, this was back around 2010-2012 (not sure why... isn't a bad area). 7900 Arcadia while freestanding was not very visible; it was probably a real estate mistake in the first place; the Thrifty it replaced at 7000 Sunrise was in a busy shopping center and had better visibility.

900 Sunrise seems like its traffic could somewhat easily move over to Roseville Square. Still no idea why Rite Aid wanted that store or why Longs offered it up. I wish Rite Aid had kept one of the Reno/Sparks stores they traded away to Longs and passed on 900 Sunrise.

That group of closures in Elk Grove puzzled me also J Street and S? Street were disappointing given they were newer stores. At least F Street survives. The two El Camino closures were not a surprise, one was an outright scary store and the other just didn't seem to have much traffic though 99 Only was busy next to it. I think the high share of Kaiser around Sacramento messes with pharmacy volumes at the major chains to some extent. Walgreens has also closed a surprising number of stores around Sacramento.

I am a little surprised they do not yet have a recent remodel anywhere around Sacramento. I think despite the closures it is still an important market for them, the Rio Linda store was built not that long ago. Basically every management team Rite Aid has had, has built some new stores around Sacramento, even during the years they hardly open any stores.

Actually,both Sacramento units housed in 1950-era Cardinal/Lucky/Albertsons units(2211 F Street and 4830 J Street)remain open(may have confused the latter with recently closed 2801 K Street #100 which was the pharmacy-only unit in a medical office building opposite Sutter General and opposite the Cap City Freeway from 1125 Alhambra which is reasonably lucrative though somewhat rough).7900 Arcadia was indeed planned by the ill-fated Martin Grass regime though is far from their only real estate misfire(3709 Decoto in Fremont,since converted to a bank,didn't even last 5 years).

As it stands right now,California has 531 active Rite Aid locations though the official locator still lists 4 closed locations and marks them as such:the midtown Sac pharmacy-only location that was only open on weekdays and 3 Southern California locations(Franklin/Western in East Hollywood which is rumored for conversion to a grocery store,West Covina,and a location in the downtown of the LA suburb of Alhambra which is not to be confused with the midtown Sacro street home to a strong performing Rite Aid).The Golden State will likely lose at least a dozen locations once the official corporate review is completed;but if there was a silver lining,SoCal has generally seen more closures the past couple of years than NorCal and will likely account for most of the California closures as they still have locations closer to each other(dating back to the Thrifty days)than in the north state(there may not be many dog stores left to close in the Bay Area event though Castro Valley and Hayward have yet to be remodeled out of their respective Payless and Thrifty decors).Fewer than 20 locations chainwide have closed within the past couple years under the Heyward Donigan regime,though the announcement of imminent 2022 closures in conjunction with the Q3 earnings(rather out-of-character given that regardless of CEO regime store closures have traditionally only been announced privately to staff of affected locations)may be a sign that the honeymoon period may be over for the current regime which has been focused on shoring up/reimagining existing stores while avoiding the methodologies of predecessors which have closed higher amounts of locations(John Standley was doing a decent job before both ill-fated merger attempts.).

[storewanderer]

Actually,both Sacramento units housed in 1950-era Cardinal/Lucky/Albertsons units(2211 F Street and 4830 J Street)remain open(may have confused the latter with recently closed 2801 K Street #100 which was the pharmacy-only unit in a medical office building opposite Sutter General and opposite the Cap City Freeway from 1125 Alhambra which is reasonably lucrative though somewhat rough).7900 Arcadia was indeed planned by the ill-fated Martin Grass regime though is far from their only real estate misfire(3709 Decoto in Fremont,since converted to a bank,didn't even last 5 years).

As it stands right now,California has 531 active Rite Aid locations though the official locator still lists 4 closed locations and marks them as such:the midtown Sac pharmacy-only location that was only open on weekdays and 3 Southern California locations(Franklin/Western in East Hollywood which is rumored for conversion to a grocery store,West Covina,and a location in the downtown of the LA suburb of Alhambra which is not to be confused with the midtown Sacro street home to a strong performing Rite Aid).The Golden State will likely lose at least a dozen locations once the official corporate review is completed;but if there was a silver lining,SoCal has generally seen more closures the past couple of years than NorCal and will likely account for most of the California closures as they still have locations closer to each other(dating back to the Thrifty days)than in the north state(there may not be many dog stores left to close in the Bay Area event though Castro Valley and Hayward have yet to be remodeled out of their respective Payless and Thrifty decors).Fewer than 20 locations chainwide have closed within the past couple years under the Heyward Donigan regime,though the announcement of imminent 2022 closures in conjunction with the Q3 earnings(rather out-of-character given that regardless of CEO regime store closures have traditionally only been announced privately to staff of affected locations)may be a sign that the honeymoon period may be over for the current regime which has been focused on shoring up/reimagining existing stores while avoiding the methodologies of predecessors which have closed higher amounts of locations(John Standley was doing a decent job before both ill-fated merger attempts.).

That is good J Street is still open, not sure why I thought it closed.

I think they've pretty well gutted the bay area of locations. San Jose still has decent penetration but the rest of the bay area the chain is sort of few and far between. At this point any losses in the bay area are going to be due to not coming to terms on leases or shopping center redevelopments causing the space to be lost.

I think the reason they announced closures this way is because CVS just did the same thing. There is some twisted mindset in Wall Street that thinks it is a sign of strength when a chain says it is closing stores. Sure it is a sign of strength to close stores as you need to close them (some locations of stores will eventually fail over time for so many reasons) but when you hear companies do things like say "we close the bottom 10% of stores every year" or some other type of metric like that, assuming the stores are profitable, it kind of feels like you are just closing stores to make it look like you are "doing something."

It is going to be more difficult than usual to judge store performance for 2020 and 2021. Take South Lake Tahoe- in 2020 the area was practically shut down for months and nobody was there; the store volume was way off. Then in 2021 the area had the big fire evacuation and again the place emptied out for weeks. Also for a number of months the store is short staffed and only open 10 AM to 6 PM. Not sure if they resolved that; it was still that way in October. Store condition and in-stock even in remaining core drug/HBA categories is embarrassingly bad and has been for much of 2020 and 2021. What has historically been a high volume store over the years, due to these factors in 2020 and 2021 I would expect is showing steep losses in traffic.

[veteran+]

It's about cutting expenses and maximizing profits for short term fruition. It has nothing to do with long term "health".

Low yield has to go and high yield needs the juice to be squeezed out.

Money in the pocket NOW!

If you can't monetize the hell out of every inch of the company, it's gotta go.

Just look at the shennanigans at all of the parts of the gasoline industry and the cluster xxxxxx THAT is.

[storewanderer]

It's about cutting expenses and maximizing profits for short term fruition. It has nothing to do with long term "health".

Low yield has to go and high yield needs the juice to be squeezed out.

Money in the pocket NOW!

If you can't monetize the hell out of every inch of the company, it's gotta go.

Just look at the shennanigans at all of the parts of the gasoline industry and the cluster xxxxxx THAT is.

If you are closing the store and able to walk from it (no lease obligation after you close) then it is a clean clear expense cut.

But often when we see chains do this sort of thing ("close 900 stores" or "close 63 stores") you have a variety of real estate situations and in a number of cases you have a vacant store you are paying rent on. Unless the store is a complete dog (and I think Rite Aid got rid of most of those type of stores to Walgreens) it seems like it makes sense to continue operating it as long as it isn't cash flow negative.

Now with where we are at unfortunately staffing probably comes into the above equation. You have marginal store A that is a break-even cash flow store. A few miles away you have high volume store B that is highly profitable but understaffed, the employees there are getting stressed out, customers unhappy, etc. Do you give up on store A and move those employees over to store B to try and get it staffed adequately? If store A wasn't real busy the working conditions for the employees may have been pretty good; they may not like store B; they may not even stay at store B if it has too poor of conditions.

I can get gas for 3.39 (with cash) down in Carson City... these are stations run by local business people (a couple are branded Sinclair, the other 3 are unbranded); most I've paid down there in the past six months has been 3.65 (with cash); in Reno most stations over $4. Costco/Sams at 3.62 (Sams 3.67 without membership). Reno has an indexed gas tax to fund new roads which currently adds about .40 per gallon to the price.

[Bagels]

Rite Aid quietly closed a pair of locations near me (South OC). Both had been renovated into the chain’s current decor package within the past few years - at least the second major renovation in the past 10-15 years. One was a 24-hour location.

Meanwhile, the ex-Perry Drug store locations (not the standalone replacement stores built as Rite AIDS) near my parents’ residence still feature mid-1990s decor packages, although some have elements of more current decor packages (very ghetto).

[Romr123]

That's the interesting conundrum. Michigan didn't lose any significant number of stores with the earlier swaps, but there are clearly a mix of stores in SE Michigan which include old inline strip stores from the Cunningham's era along with newly built drivethrough stores. One example is in Birmingham, where there's a location on a retail strip (Maple/Coolidge), and a couple miles away, an old inline store in an old A&P anchored strip center on the edge of downtown (Adams S of Maple) near the post office. Very affluent older area. Stopped in the strip center store last time they did a food clearance and got some nice bargains. Chatted up the checker who'd worked there for 25-ish years. TBH you'd sooner get her to change stores to that busy store than the man in the moon---she's got a cush job with her regular customers, low stress and low hassle. That said, the clientele isn't terribly interested in going all the way (under the railroad tracks which is a goodly psychological barrier) to the other store. There are two CVS on Woodward/Old Woodward (one long-time downtown store, other a recent Sav-On conversion) which are on the other side of Woodward. I imagine there are lots of those kind of decisions going on right now.

[buckguy]

Rite-Aid probably has closed a few hundred already. Whenever I've had a chance to drive through their territory, there seem to be a great many obvious former stores. Walgreen also has given up quite a few, CVS probably proportionately fewer than either of these chains. The reason these are so easy to spot is that they are the freestanding locations these chains have built over the last 20 years and many of them are in locations with few prospects (small declining towns, inner city neighborhoods with no prospects of gentrification). Some of these stores were taken over by Dollar chains---Rite-Aids in particular, which makes me think they must have sold the leases in bundles, but some have no tenant at all. It was pretty obvious that they, in particular, were overbuilding and making odd choices.

CVS seems more willing to be flexible about locations despite opening so many freestanding locations---opening in new mixed use complexes, even in the suburbs. They relocated a store on Rockville Pike from a shopping center undergoing redevelopment to new development with a Whole Foods and condos. I would have expected them to take advantage of the constant churn of properties in that corridor to build a freestanding store. They kept a very old location Solon Ohio in a small office building. They also don't seem to automatically include drive-thrus. I noticed very few people ever using them until COVID.

[BillyGr]

Rite-Aid probably has closed a few hundred already. Whenever I've had a chance to drive through their territory, there seem to be a great many obvious former stores. Walgreen also has given up quite a few, CVS probably proportionately fewer than either of these chains. The reason these are so easy to spot is that they are the freestanding locations these chains have built over the last 20 years and many of them are in locations with few prospects (small declining towns, inner city neighborhoods with no prospects of gentrification). Some of these stores were taken over by Dollar chains---Rite-Aids in particular, which makes me think they must have sold the leases in bundles, but some have no tenant at all. It was pretty obvious that they, in particular, were overbuilding and making odd choices.

Depending on where, it may be hard to know what stores are closed by who.

For instance, in this area you have some that were Rite Aid, then taken over by Walgreens and then closed (so it may look like a closed Rite Aid but is really a closed Walgreens), and you also had closings when Rite Aid took over Eckerd (stores from both chains closed, many times due to being near each other).