FrankMoore99 wrote: ↑April 18th, 2024, 10:13 am
How is it that stores that still had the RA1 design continued to exist (or still continue to exist) in 2023 and 2024, while newly remodeled locations get or got shut down before them?? What is the story behind them of why they didn't get remodeled?? Were they going to close, but sales continued to remain steady to this point because the competition didn't bring as much of an impact on the store as they predicted (Walgreens was predicted to eat that store, but it didn't, as in the case of Placerville where Walgreens ended up shutting the store three months after the Fair Lane Rite Aid (which still had the 90s RA1 design), making me think that Rite Aid was still holding its own there especially since it received a new sign and stayed open until 2024). Were they going to get remodeled, but the process took much longer than expected. Or do they want to preserve Rite Aid nostalgia??
https://haydenbusinessblog.blogspot.com ... still.html
It has already been explained elsewhere that chains remodel based on many factors. Store volume, profitability, lease term etc.
Why waste money remodeling a store for example if it only has a few years of lease term left and the relationship with the landlord is bad? Odds are you will spend more money on the remodel than it will deliver if the store has to close because they can't renew the lease. So that store doesn't get remodeled.
A rural store that serves a few thousand customers at best also likely won't be remodeled for decades. Look at Groceteria and you'll see pictures of open, live Safeway and Albertsons stores out in rural areas that are five aisles wide and have 1960s interiors. They operate just fine, have no competitors with nicer stores nearby, and frankly if they had to remodel they'd disrupt business which would upset the customers who depend on them to eat!
There are thousands of legitimate business reasons why one would remodel one store and not another, and very few are going to be publicly determined. No sane company that wants to remain in business will just operate with a first in, first out model for upgrades and remodels. The few that have usually wind up wasting money and sometimes even causing closure of perfectly good stores. Some of the worst business failures have been chains that decided "no matter what" they were going to execute a chain wide remodel to make over their stores into something different and they bankrupted themselves due to unexpected sales impacts from the process. It might surprise you to find that many times remodeled stores
have major sales decreases for months during construction and even after the remodel as customers try to figure out where their items moved to. You have to realize that sometimes these smaller businesses like drugstores might only deliver a bottom line annual profit of a few hundred thousand dollars per store, so if the store had to pay for a multi million dollar remodel it would more than likely push the store into a loss each year while it is amoritized against store profits and result in the store actually closing. That remodel would have to prove to deliver more profits and sales than it costs for the store to receive it.
Nobody on a corporate board gives a hoot about nostalgia or any such thing. They only care about money. That is what makes these decisions.
As far as Rite Aid goes, it has been discussed elsewhere that remodeling is one of the factors that bankrupted the company. They had requirements under their financing that they had to spend millions of dollars a year on store remodeling to maintain the "value of the assets." Even if such remodeling was unnecessary. So in some cases they did remodel stores which caused them to lose money, but they were required to spend it anyway. In the last year prior to bankruptcy, Rite Aid spent all that money on sign replacement instead of interior remodels. So the most likely reason for a Rite Aid store not being remodeled would fall on three factors; 1) Landlord or city wouldn't allow it. 2) Not enough term left on the lease to justify remodel. 3) Potential relocation of the store being considered.
So for example I am aware Chino Hills has some signage regulations and it's possible that the one store with 90s signs wouldn't have been allowed to replace with the new logo unless they made it much smaller than the original. You see some older logos on other businesses in that city for the same reasons, newer businesses have smaller signs. Of course nobody publicly would know if they were negotiating with a different landlord or developer to move a store somewhere else, and if they were then they would have cut off funding for upgrades to the old site except necessary repairs.
Most retailers have Real Estate Groups or Asset Review Committees where their Real Estate people, store operations people, regional and district managers, construction people, finance people, and others all meet several times a quarter and review specific stores then make decisions based on budgets about if that store should be considered for remodeling, being left alone, needs a kick in the rear like the manager fired, needs to be moved, needs a major costly repair because something is bad for workers or customers, or the store needs to be closed. They go through the numbers and make the decisions.