Inside This Issue - Opinion
Rite Aidís resurgence viewed from store level
January 20th, 2014
The turnaround at Rite Aid has received a lot of attention of late, and rightfully so. The drug chain’s talented, deep and close-knit management team has crafted a strategy centered on health and wellness that resonates with consumers and fosters continuous improvement in all aspects of the business — everything from store design and merchandising to the company’s innovative loyalty program and cost control.
The effectiveness of the plan is reflected in Rite Aid’s financial results, which have been in the black for five consecutive quarters, but is perhaps best seen at store level. The retailer’s recently remodeled outlet in the Greenwich Village neighborhood of New York City is a case in point.
Located at 534 Hudson St. in Manhattan, the 8,000-square-foot store showcases the new thinking that permeates all levels of the organization. Although the inevitable constraints involved in revamping an existing structure required some compromises in terms of overhead signage and fixtures, the store embodies the essence of Rite Aid’s wellness concept, which features expanded pharmacy services and an enhanced selection of health care products.
Pharmacists at the store have received special training in medication therapy management and diabetes care, and they can administer immunizations for such conditions as flu, pneumonia and shingles. The outlet includes a private consultation room for the delivery of advanced clinical services.
Another prominent component of the Greenwich Village store is an enhanced beauty care section, one of the first in the 4,600-unit chain. In addition to core mass market beauty brands, the department, which is positioned near the front of the store and is visible from the entrance, offers such premium cosmetics lines as Eddie Funkhouser, Girlacktik, POP Beauty and Senna. Beauty advisors, counterparts to the Rite Aid wellness advisors who have played a key role in the success of the wellness format, are available to discuss beauty trends with shoppers, provide information and demonstrate products.
The balance of the store is devoted to consumables, where high-capacity refrigeration units usually found in supermarkets allow for an expanded selection of dairy products and other items, and an innovative array of traffic-building general seasonal merchandise and services, including Western Union money transfers and the sale of postage stamps, drive consumer traffic.
“The way we look at this business is that we’re a destination for prescriptions and other drug store products, but there’s a lot of convenience business we can do,” says Mark Kramer, group vice president for Rite Aid’s Metro New York region, who oversees 300 stores. “The more reasons we can give the customer to come in for a shopping trip, the better we’re going to do.”
As compelling as many of the innovative features in the Greenwich Village store are, the real differentiator is the quality of the people who staff it and their commitment to Rite Aid’s vision of what a contemporary drug store should be.
“Between updating physical plants and working really hard to operate them properly, with the right store managers and the right store teams, we’ve had great growth,” notes Kramer, adding that about half of the outlets in his region have been upgraded during the past three years.
The importance of fielding a high-quality workforce was evident when Kramer recently took a group of visitors through the Greenwich Village store. On two occasions during the half-hour tour, customers approached him to commend store manager Karla Sosa, who kept the location running smoothly during what everyone involved characterizes as a tough renovation.
“The store manager is a critical position,” Kramer says. “When Rite Aid uses resources, we want to make the most of them. The people on the front line that enable us to do that are our store managers and the teams they lead.”