Inside This Issue - News
Rite Aid makes decisions on new store prototypes
October 10th, 2011
CAMP HILL, Pa. – As Rite Aid Corp. drives forward with the rollout of one new store format, it has decided to put the brakes on another.
President and chief executive officer John Standley said the company is pulling the plug on any expansion plans for its co-branded Save-A-Lot/Rite Aid pharmacy and grocery stores.
Rite Aid and Supervalu Inc., the parent of Save-A-Lot, a limited-assortment discount supermarket chain, began the pilot about a year ago in Greenville, S.C., with the conversion of 10 Rite Aid stores.
“Our Save-A-Lot/Rite Aid stores still continue to show solid sales gains,” Standley told analysts in a conference call on Rite Aid’s fiscal 2012 second quarter results. “However, margins in these stores have not been strong enough to take advantage of the sales increases. We still like the grocery concept and think it can work in certain of our stores. We have not been able to create an economic model with Supervalu that makes sense for both parties, and therefore we will not be expanding the Save-A-Lot format with them.”
He added that the 10 test locations will continue to operate as co-branded Save-A-Lot/Rite Aid stores. Under the licensing pact with Supervalu, Rite Aid owns and operates the co-branded stores.
Meanwhile, Standley reported that Rite Aid had converted 40 drug stores to its new “wellness store” concept as of the end of the second quarter on August 27. The format, which made its debut around springtime, had been launched in nine locations by midsummer.
“More responsibility is being placed on consumers to make health decisions, and they are actively seeking advice on how to make the right ones. Our new wellness format is all about empowering our customers in their pursuit of wellness,” Standley explained during the call. “Customers are telling us they like the look and feel of these stores, which offer expanded clinical pharmacy services, new health and wellness product offerings, and our unique on-site ‘wellness ambassadors,’ who serve as a bridge from the front end of the store to the pharmacy.”
The spacious wellness format makes the pharmacy more prominent through lower gondolas, brighter lighting, new signage, and enhanced prescription pickup and drop-off windows. A patient counseling room with a Rite Aid Online Care station promotes interaction with pharmacists, in person and remotely. Also, the pharmacy and health and beauty aids departments adjoin to create a contiguous wellness area.
“Our customers have responded very favorably to this unique service and approach,” Standley told analysts. “And while the wellness stores will continue to evolve based on our learnings and customer feedback, the key elements of these renovations provide the foundation for our store renovation program in fiscal 2012.”
The wellness store concept reflects Rite Aid’s customer segmentation strategy, in which its drug stores are tailored to better serve the needs of a particular market area.