2019 Retail Pacesetters: Rite Aid takes on a new look
Transition is probably the single best word to describe Rite Aid today. Last year, the chain sold 1,932 stores — nearly half of its base — to rival Walgreens. In March, Rite Aid officials announced a restructuring plan to take place immediately, a move that will result in a 20% reduction in full-time corporate positions and $55 million in savings. The plan includes replacing three of its top executives, including John Standley, CEO.
This announcement comes just months after Rite Aid shareholders failed to support a deal to merge the drug chain with Albertsons.
Despite all this, Rite Aid has been doing what it can to reimagine and shape itself into a survivor. As retail pharmacy competition has heated up, Rite Aid management shifted its focus to more profitable business segments, namely drug store prescriptions and e-commerce, as well as its pharmacy benefit manager EnvisionRxOptions, which gained a new CEO in February. Additionally, Rite Aid and McKesson have renewed their agreement for drug purchasing and that, combined with increasing prescription sales, are expected to help the company in the long-term.
Rite Aid’s e-commerce initiatives include developing faster ship-from-store and prescription fulfillment services together with incorporating more drive-through pharmacies and mobile apps. These efforts, experts said, will help Rite Aid appeal to a wider audience from younger consumers to seniors, many of whom prefer to get their scripts from trusted retailers.
Its 20-year-old partnership with GNC, which recently was extended through 2021, has played an instrumental role in helping to solidify Rite Aid’s reputation as a health-and-wellness destination. Approximately 2,200 GNC store-within-a-store locations are operating in Rite Aid stores nationwide, including a majority of Rite Aid’s wellness stores.
Wanting to appeal to a wider range of consumers, the Camp Hill, Pa.-based drug chain announced plans to bring more than 200 prestige cruelty-free beauty items from value-priced indie-brand Kokie Cosmetics to its stores and at RiteAid.com. The move is expected to help Rite Aid attract the attention of millennial consumers.
While some hail the move to shed stores and trim costs as admirable, others are left wondering whether alone it can sustain Rite Aid in the long-term. Jim Crumly, a financial blogger for The Motley Fool, said in a recent column “the increasingly crowded pharmacy space and strength of its rivals, coupled with Rite Aid’s financial state may be sufficient enough to initiate a downward spiral.”
In Crumly’s view, Rite Aid can turn things around by leveraging its strengths, namely increasing the number of prescriptions it fills by expanding access to more preferred Medicare Part D networks and growing its in-store clinical capabilities. Fourth-quarter results showed Rite Aid increasing script count for the third consecutive quarter
This story is one of 20 profiles of retailers who are making a difference in the industry. To read more, click here.
This announcement comes just months after Rite Aid shareholders failed to support a deal to merge the drug chain with Albertsons.
Despite all this, Rite Aid has been doing what it can to reimagine and shape itself into a survivor. As retail pharmacy competition has heated up, Rite Aid management shifted its focus to more profitable business segments, namely drug store prescriptions and e-commerce, as well as its pharmacy benefit manager EnvisionRxOptions, which gained a new CEO in February. Additionally, Rite Aid and McKesson have renewed their agreement for drug purchasing and that, combined with increasing prescription sales, are expected to help the company in the long-term.
Rite Aid’s e-commerce initiatives include developing faster ship-from-store and prescription fulfillment services together with incorporating more drive-through pharmacies and mobile apps. These efforts, experts said, will help Rite Aid appeal to a wider audience from younger consumers to seniors, many of whom prefer to get their scripts from trusted retailers.
Its 20-year-old partnership with GNC, which recently was extended through 2021, has played an instrumental role in helping to solidify Rite Aid’s reputation as a health-and-wellness destination. Approximately 2,200 GNC store-within-a-store locations are operating in Rite Aid stores nationwide, including a majority of Rite Aid’s wellness stores.
Wanting to appeal to a wider range of consumers, the Camp Hill, Pa.-based drug chain announced plans to bring more than 200 prestige cruelty-free beauty items from value-priced indie-brand Kokie Cosmetics to its stores and at RiteAid.com. The move is expected to help Rite Aid attract the attention of millennial consumers.
While some hail the move to shed stores and trim costs as admirable, others are left wondering whether alone it can sustain Rite Aid in the long-term. Jim Crumly, a financial blogger for The Motley Fool, said in a recent column “the increasingly crowded pharmacy space and strength of its rivals, coupled with Rite Aid’s financial state may be sufficient enough to initiate a downward spiral.”
In Crumly’s view, Rite Aid can turn things around by leveraging its strengths, namely increasing the number of prescriptions it fills by expanding access to more preferred Medicare Part D networks and growing its in-store clinical capabilities. Fourth-quarter results showed Rite Aid increasing script count for the third consecutive quarter
This story is one of 20 profiles of retailers who are making a difference in the industry. To read more, click here.