Post-acquisition, Rite Aid flexes bigger

BALTIMORE

Bigger. Better. Bolder.

That’s Rite Aid’s new credo, unveiled last month to thousands of veteran Rite Aid store managers and pharmacists who were joined by thousands more Brooks and Eckerd personnel attending their first Rite Aid managers conference.

“This is a union of two strong and established companies,” Mary Sammons, Rite Aid president, chairman and chief executive officer told a conference room of Rite Aid associates. “We have created a whole that is far greater than the sum of its parts.”

That’s no better exemplified than by Rite Aid’s entry into an elite group of companies—Fortune’s list of the top 100 companies in the United States as ranked by revenue. With the Brooks-Eckerd acquisition, Sammons said, Rite Aid has jumped into the No. 1 or No. 2 spot in 70 percent of its East Coast markets, including Baltimore; Charlotte, N.C.; Philadelphia; Pittsburgh; New York and Washington.

The meeting served as a refresher for Rite Aid’s mission statement, corporate objectives and core corporate values for Rite Aid’s veteran employees and emphasized to Rite Aid’s new employees the importance of delivering on that promise. “[Customers] know we’re bigger—they expect better. Now is the time to be bolder,” Sammons said. “Our acquisition of Brooks and Eckerd has established us as a bold drug store.”

And while the company converts those Brooks and Eckerd store banners to Rite Aid, Sammons said Rite Aid is still committed to growing organically with 1,000 additional Customer World prototype stores to be opened in the next five years.

“[But] quantity without quality means nothing,” Sammons said, imploring Rite Aid’s rank-and-file to step up their already-improving customer service standards and outlining initiatives to help drive that service metric.

Some of the initiatives Rite Aid announced at the meeting included its diabetes partnership with dLife—a multimedia company with a half-hour weekly television show during which Rite Aid runs diabetes-focused commercials. dLife also boasts a Web site, a direct mail newsletter and educational radio vignettes.

Rite Aid rolled out what seemed to be a new television commercial that emphasized the relationship customers have with such brands as the New York Yankees and Harley Davidson, suggesting that Rite Aid needs to carve out their place in the drug store industry with a “brand fanatic” following.

As for conversions of the Brooks and Eckerd stores, the units will be outfitted with a reorganized food mart that emphasizes the chain’s focus on convenience foods, a refreshed checkout area and a photo department that will highlight the chain’s offerings in the digital processing arena. The pharmacy counter and waiting area also will drastically change for the better, Sammons said.

Rite Aid executives made a series of analogies to super sports icons at its meeting that amounted to one core message—Rite Aid may be the underdog and may have an uphill row to hoe, but the No. 3 chain still has its eyes on knocking CVS and Walgreens from the top of the drug store hill.

“We must be in control of ourselves and strive to be better and bolder,” said Jim Mastrian, Rite Aid special adviser of corporate strategy. In short, Rite Aid pharmacists and store managers must “own” their operations. “True owners find a way to make the bad good and the good better,” Mastrian said. “This is Rite Aid’s time.”