Rite Aid closing at least 63 stores

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Re: Rite Aid closing at least 63 stores

Post by storewanderer »

Saw that earnings report... amazing. This cat has 99 lives.

Only 86 of 145 stores closed so far...

Opening 20 new "rural" stores in NY, VA, and IN. I thought they exited IN but I may be confused. Sounds like these stores will basically be pharmacy only and supplied by McKesson not Rite Aid warehouses on what little merchandise they will sell. It also sounds like McKesson may have more involvement in these than a typical store but the CEO comments were a little unclear.
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Re: Rite Aid closing at least 63 stores

Post by Romr123 »

They have exited IN, but wonder if they see an opening along the IN/MI and IN/OH borders...Angola/Auburn/east of Fort Wayne/Muncie.
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Re: Rite Aid closing at least 63 stores

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Romr123 wrote: June 23rd, 2022, 3:15 pm They have exited IN, but wonder if they see an opening along the IN/MI and IN/OH borders...Angola/Auburn/east of Fort Wayne/Muncie.
I am somewhat encouraged by this earnings report. I am a little shocked based on what I have been seeing in the stores but they obviously managed costs to get results that were to exceed the (low) expectations.

This CFO Matt Schroeder who has worked for Rite Aid since 2000 is probably who is really behind the finance side and being able to keep this thing going like this after the various years of many choppy waters.

I mean yes they are still losing money and there are obviously problems but I really thought today would be doom.
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Re: Rite Aid closing at least 63 stores

Post by norcalriteaidclerk »

storewanderer wrote:
Romr123 wrote: June 23rd, 2022, 3:15 pm They have exited IN, but wonder if they see an opening along the IN/MI and IN/OH borders...Angola/Auburn/east of Fort Wayne/Muncie.
I am somewhat encouraged by this earnings report. I am a little shocked based on what I have been seeing in the stores but they obviously managed costs to get results that were to exceed the (low) expectations.

This CFO Matt Schroeder who has worked for Rite Aid since 2000 is probably who is really behind the finance side and being able to keep this thing going like this after the various years of many choppy waters.

I mean yes they are still losing money and there are obviously problems but I really thought today would be doom.
Their prior Indiana presence was focused on the southern tip(an extension of the the presence they had in Louisville, Kentucky opposite the Ohio River)and missed the major population centers elsewhere in the state.

As for the lower loss than forecast,it was due to the stores being systematically pillaged of sorely needed resources (labor hours cut, supplies and merchandise slower to come in, facilities maintenance/store remodels being deferred).

I first had the impression that the 145 planned closures we're closer to done already,as only 86 stores closed amounts to roughly 60% of what was planned;and on top of that the California closures that have occurred already amount to nearly half of the total closures in progress.This may mean that some of the closures in both the core Mid-Atlantic operating region and the the 2 Great lakes states where RAD has an anchor presence (Michigan and Ohio) occurred between October 2020(the last time the official RAD store locator pruned closed stores from its database). It's entirely possible that even some West Coast locations thought to have been among the first closures among those announced in December may have actually closed earlier in 2021(Seattle Belltown may have actually closed earlier in 2021 based on the final Yelp review,and possibly Buena Park since it was the last California closure to occur during the 2021 calendar year, Visalia Mooney and downtown Ontario were the actual first California locations to close after New years day this year). Even some NYC stores may have closed earlier in 2021.Of course it doesn't help my analytics research that the official RAD locator last pruned long-closed locations from the database in September/October 2020 before the last Colorado locations closed (all three in Grand junction) which potentially gave me a false impression that the closure round was basically complete.I did read in a feature article on Yahoo finance that Heyward Donigan stated that no further closures are anticipated beyond the 145 total announced in phases over the last 2 quarterly earnings calls.I'll believe it if we can go at least a couple more months without more closures being reported on mainstream and/or social media, considering that I was buffeted into a false sense of security by an outdated official store locator.

At least the earnings beat was another own goal scored by a Deutsche Bank 'expert analyst' that shall remain nameless.

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For your life,Thrifty and Payless have got it.
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Re: Rite Aid closing at least 63 stores

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norcalriteaidclerk wrote: June 24th, 2022, 7:18 pm Their prior Indiana presence was focused on the southern tip(an extension of the the presence they had in Louisville, Kentucky opposite the Ohio River)and missed the major population centers elsewhere in the state.

As for the lower loss than forecast,it was due to the stores being systematically pillaged of sorely needed resources (labor hours cut, supplies and merchandise slower to come in, facilities maintenance/store remodels being deferred).

I first had the impression that the 145 planned closures we're closer to done already,as only 86 stores closed amounts to roughly 60% of what was planned;and on top of that the California closures that have occurred already amount to nearly half of the total closures in progress.This may mean that some of the closures in both the core Mid-Atlantic operating region and the the 2 Great lakes states where RAD has an anchor presence (Michigan and Ohio) occurred between October 2020(the last time the official RAD store locator pruned closed stores from its database). It's entirely possible that even some West Coast locations thought to have been among the first closures among those announced in December may have actually closed earlier in 2021(Seattle Belltown may have actually closed earlier in 2021 based on the final Yelp review,and possibly Buena Park since it was the last California closure to occur during the 2021 calendar year, Visalia Mooney and downtown Ontario were the actual first California locations to close after New years day this year). Even some NYC stores may have closed earlier in 2021.Of course it doesn't help my analytics research that the official RAD locator last pruned long-closed locations from the database in September/October 2020 before the last Colorado locations closed (all three in Grand junction) which potentially gave me a false impression that the closure round was basically complete.I did read in a feature article on Yahoo finance that Heyward Donigan stated that no further closures are anticipated beyond the 145 total announced in phases over the last 2 quarterly earnings calls.I'll believe it if we can go at least a couple more months without more closures being reported on mainstream and/or social media, considering that I was buffeted into a false sense of security by an outdated official store locator.

At least the earnings beat was another own goal scored by a Deutsche Bank 'expert analyst' that shall remain nameless.

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I too thought the closure round must be nearly complete. I wonder if the remaining closures will just be happening in the coming months as a result of riding out leases. They haven't updated the surplus property listing since May 5, so we don't know what types of lease terms are left on some of these more recent closures.

Maybe the order of closures has been the ones losing the most money first... and that is why so many bigger city type stores got targeted (must have been losing a ton in theft).

Also wonder if they may arrange to sell some additional stores to Walgreens or CVS, perhaps stores they intend to close, or a situation where they have a couple stores in a market with no/limited Walgreens or CVS, and they close one, and it is no longer making sense for them to have just one store.

I'm a bit disappointed that 20 new smaller stores isn't being tried in the west but to be fair they have a pretty good rural presence already in the west. I thought they did in the east, too (they certainly do in PA/MI), but maybe the Walgreens deal messed that up.
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Re: Rite Aid closing at least 63 stores

Post by Romr123 »

I think Michigan still has the confounding factor of both Meijer's blanket and a reasonable infestation of WalMart which is basically about 1.6 the hypermarket density of other parts of the US. This impacts all Rite Aid's merchandise categories that they would put into a small store. RA might be able to (re)-expand in the Upper Peninsula where they transitioned over to Walgreens with small county-seat stores (aping Dollar General); and they don't have quite the coverage in Grand Rapids and Kalamazoo they do elsewhere, but otherwise they're pretty blanket-y.
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Re: Rite Aid closing at least 63 stores

Post by buckguy »

Rite-Aid's strength at least in terms of continuing store counts seems to be concentrated in areas where they were able to acquire a dominant chain: Toledo (Lane's), Pittsburgh (Thrifty), Erie (the original Eckerd) or where they already were established like eastern PA. I think Perry (which they bought) was probably a decent competitor to Arbor (bought by CVS), although Perry had been in a long retreat from its markets outside of Michigan. Gray Drug gave them a strong second position in some Ohio markets which they seem to have lost, and a weak position in DC (some stores spunoff to Walgreen). Rite-Aid still has stores in Baltimore where they had bought the dominant Read's chain, but where Peoples (CVS) also operated. They got lucky for awhile with the Thrifty end of Thrifty Payless in that CVS and Walgreen weren't gaining much traction with their purpose built stores in southern California and Albertson's didn't know what to with Sav-On. The south eastern Eckerd operations probably have been a drag on them as they got the weaker regions (CVS got the stronger ones).
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Re: Rite Aid closing at least 63 stores

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buckguy wrote: June 25th, 2022, 11:10 am Rite-Aid's strength at least in terms of continuing store counts seems to be concentrated in areas where they were able to acquire a dominant chain: Toledo (Lane's), Pittsburgh (Thrifty), Erie (the original Eckerd) or where they already were established like eastern PA. I think Perry (which they bought) was probably a decent competitor to Arbor (bought by CVS), although Perry had been in a long retreat from its markets outside of Michigan. Gray Drug gave them a strong second position in some Ohio markets which they seem to have lost, and a weak position in DC (some stores spunoff to Walgreen). Rite-Aid still has stores in Baltimore where they had bought the dominant Read's chain, but where Peoples (CVS) also operated. They got lucky for awhile with the Thrifty end of Thrifty Payless in that CVS and Walgreen weren't gaining much traction with their purpose built stores in southern California and Albertson's didn't know what to with Sav-On. The south eastern Eckerd operations probably have been a drag on them as they got the weaker regions (CVS got the stronger ones).
Most of the Southeastern Eckerd regions, Rite Aid sold to Walgreens. Also the hard south like AL, GA, LA, etc. From the best I can tell, most of those were dog stores. There may have been some patches of okay stores, but they weren't former Eckerds, and I never saw them. The company's finances should have improved significantly when they got rid of those but for some reason it is just more of the same.

Despite closure activity that may lead one to assume otherwise, Rite Aid's SoCal Stores are quite busy. From a foot traffic perspective, they have much higher foot traffic than any other Rite Aids I've ever seen. They also typically have longer store hours. Thrifty was a good chain in SoCal, it had good locations. Payless was also a very good chain in its time that ran high volume stores (very large stores) but the time for a chain like that has long passed.

Sav-On always performed well for Albertsons. It was never a poorly performing asset. Using the grocery approach on the drugstores was always solid as it drove foot traffic, plus Sav-On had excellent locations. While Albertsons may have been tough on labor in their stores, pharmacy was one part of the stores where they never made a bunch of rapid and sudden labor cuts. Sav-On was also a very high volume retailer of liquor and the liquor program is one that Albertsons never messed with, it really drove traffic to have the assortment and pricing on liquor that Sav-On had. CVS has basically given that up; they have liquor, but nobody is buying it unless out of convenience.
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Re: Rite Aid closing at least 63 stores

Post by retailfanmitchell019 »

storewanderer wrote: June 25th, 2022, 11:21 am Sav-On always performed well for Albertsons. It was never a poorly performing asset. Using the grocery approach on the drugstores was always solid as it drove foot traffic, plus Sav-On had excellent locations. While Albertsons may have been tough on labor in their stores, pharmacy was one part of the stores where they never made a bunch of rapid and sudden labor cuts. Sav-On was also a very high volume retailer of liquor and the liquor program is one that Albertsons never messed with, it really drove traffic to have the assortment and pricing on liquor that Sav-On had. CVS has basically given that up; they have liquor, but nobody is buying it unless out of convenience.
Albertsons used the drug stores for their dual-branding (Albertsons/Sav-on or Albertsons/Osco) format. This format was first done in Reno, Arizona, then Omaha. To me, this was the best idea from the Larry-era ABS. I'm surprised Montana (Osco had a few stores there) and SoCal never got the dual-branding format early on.
I don't know why they added Sav-on branding to pharmacies in the Acme or Florida divisions.
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Re: Rite Aid closing at least 63 stores

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retailfanmitchell019 wrote: June 25th, 2022, 11:41 am
storewanderer wrote: June 25th, 2022, 11:21 am Sav-On always performed well for Albertsons. It was never a poorly performing asset. Using the grocery approach on the drugstores was always solid as it drove foot traffic, plus Sav-On had excellent locations. While Albertsons may have been tough on labor in their stores, pharmacy was one part of the stores where they never made a bunch of rapid and sudden labor cuts. Sav-On was also a very high volume retailer of liquor and the liquor program is one that Albertsons never messed with, it really drove traffic to have the assortment and pricing on liquor that Sav-On had. CVS has basically given that up; they have liquor, but nobody is buying it unless out of convenience.
Albertsons used the drug stores for their dual-branding (Albertsons/Sav-on or Albertsons/Osco) format. This format was first done in Reno, Arizona, then Omaha. To me, this was the best idea from the Larry-era ABS. I'm surprised Montana (Osco had a few stores there) and SoCal never got the dual-branding format early on.
I don't know why they added Sav-on branding to pharmacies in the Acme or Florida divisions.
Behind the paper, SoCal (and NorCal) still had dual branded stores because the large Lucky Sav-On Stores that got converted to Albertsons retained their giant drug mix as if they were still a dual branded store. I did not see NM in the early 00's but suspect it was the same story there. What they didn't keep doing was running Sav-On ads/promotions...

El Paso had dual branded stores too.

The dual branded format in Reno basically shifted the drug side of the store to drug's mix and drug's shelf tags, and brought in one hour photo. It also put video rental, liquor, and candy under drug's control. Since the stores (all but 2 at the time) had the horizontal aisles it was really easy to split off the stores and give the vertical aisles to grocery and the horizontal aisles to drug (and that is largely what they did, save for a couple horizontal aisles that houses pet and paper which were part of food). In Sparks (Oddie) there was one Albertsons with no pharmacy (lease restriction, smaller store that had a terrible expansion in the late 90's) and when the dual brand concept came to Reno, despite not having the dual branding, the drug aisles in that store were shifted to Sav-On mix, shelf tags, and ran the Sav-On ad. Save Mart closed that store after a couple years of operation, it basically lost all of its business as Save Mart due to how awful Save Mart was. This was one of those situations where Albertsons was able to perform relatively well even in a lower income area.

There was a lot of marketing around the dual brand concept when it was done in Reno and at the time Albertsons was largely holding its own in Reno against Wal Mart Supercenter opening multiple stores over a few years. Scolaris, Smiths, and Safeway were getting absolutely killed (many store closures followed). I think the concept did not get them any extra customers but the marketing surrounding it may have helped them keep some traffic that may have otherwise moved to Wal Mart. Also Intermountain had a price compete program that they put into place at one store where they had a Sav-On next door that they closed in the combo store conversion process (Reno-N. McCarran) when Wal Mart opened across the street and it got the prices in the store down drastically and combined with aggressive ads and the combo store program that store stayed as busy as ever after Wal Mart opened (Safeway lost 20-40% of its volume across the street doing absolutely nothing to compete). Albertsons also imported a manager from Jewel Osco to run that store. Someone really wanted that store to make a big splash (but not enough to remodel it out of blue gray decor). When the Reno Albertsons moved to NorCal division that price cut program was eliminated on the grocery side but it stayed in place on the drug side up until the company dissolved and business at the store really fell off without the aggressive promotions and price cut program. That store is still open as Save Mart, unremodeled and hardly does any business.
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