The talk these days in chain drug circles is all about Rite Aid and its remarkable recovery from the edge of extinction.

Rite Aid, chain drug retailing, David Pinto, John Standley, Ken Martindale, health and wellness, drug chain

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Inside This Issue - Opinion

Rite Aid succeeds in seizing the initiative

June 2nd, 2014
by David Pinto

The talk these days in chain drug circles is all about Rite Aid and its remarkable recovery from the edge of extinction.

Rite Aid is by no means outperforming its major rivals, either in chain drug retailing or in the tangential retailing categories. It’s not the largest drug chain or the most profitable or the most innovative or the fastest-growing. But, considering where it’s been and where it appears to be going, it’s arguably the most exciting.

Consider: A few short years ago Rite Aid was widely viewed as a drug chain with no future. Its drug stores stood for very little in consumer terms. Many of those stores were old, outdated or badly in need of a makeover. Others were third or fourth in markets that could barely support two drug chains. Those two, invariably, were Walgreens and CVS.

Perhaps most daunting, Rite Aid apparently offered its customers no compelling alternative to the market leaders. Its stores sold much the same merchandise. And that merchandise was marketed and presented in an environment that produced no compelling inducement for the customer to switch allegiances.

No longer. Though much remains to be done, Rite Aid has developed a compelling new format and presented it in an appealing drug store package. The format is built around health and wellness, with an appeal based on achieving and maintaining good health. As such, the emphasis is heavily on advice and counseling, with the appropriate professionals often on hand to guide the customer to those products and services most critical to maintaining a healthy regimen.

Equally significant, the newest Rite Aid drug stores are appealing places to shop. While emphasizing basic drug store categories, they’ve taken those categories a step further, beefing up assortments and adding many products not usually found in mass retailers.

Finally, and this is critical, store personnel are being retrained to sell those products effectively, while serving customers who, in the past, often felt slighted in a Rite Aid drug store.

This accent on innovative merchandise and exemplary service has produced dividends, not only in increased sales of front-end merchandise but in a revival of the retailer’s prescription drug business, that most difficult of all product categories to resuscitate.

If Rite Aid continues to roll out its new concept, while introducing innovative consumer-oriented ideas, as it has promised, the retailer will, very shortly, return to the forefront of the mass retailing community by offering consumers a viable and very compelling alternative to the current market leaders.

How did it happen? How did a retailer generally written off as a drug chain with no future return itself to prominence in a retail marketplace crowded with viable customer alternatives? The answer comes as no surprise. As is usually the case in retailing, the difference between success and failure is leadership.

In chief executive John Standley, Rite Aid has found the ideal leader for its particular situation, a man with a strong background in mass retailing who understands that motivation is the key to success. To that end, he is highly visible inside Rite Aid, even as he gains stature and credibility outside the company.

More than visibility, however, Standley succeeds because he directs his efforts to the people within the company. Thus, he is always on hand with a word of praise, of encouragement, of advice. What has emerged in this environment is an organization that is willing, indeed eager, to take risks, to try out new ideas, to test new concepts. In short, a risk-averse environment has been replaced by a risk-friendly atmosphere, one in which failure is preferable to the failure to try.

Finally, a word about the people Standley has surrounded himself with. Starting with president Ken Martindale, they, like the boss, are retail veterans who bring to their current assignments backgrounds that combine success and setbacks. For them, the slate has been wiped clean. They are, in a sense, starting over. And they have little to lose.

Taken together, this blend of talent, ideas and initiatives is a formidable combination. Rite Aid has seized the initiative. If retained and expanded, it will, in this decade, produce one of America’s truly innovative chain drug retailers.