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GREENVILLE, S.C. — The store co-branding concept that began late last year between Rite Aid Corp. and Save-A-Lot Food Stores has met and in some cases exceeded expectations at the 10 outlets that are involved.
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The co-branded food and pharmacy stores are owned and operated by Rite Aid. |
“We’re pleased with what we’ve seen to date,” comments Rite Aid senior vice president of store operations Scott Bernard. “Feedback has been positive from both our regular and our new customers, who are searching for value, quality and convenience.”
Like a conventional Rite Aid store, the new units offer such items as national health and beauty care products, greeting cards, and store brand items, as well as a full-service pharmacy.
But the first thing that a customer is likely to see upon entering any of the 10 stores located in the Greenville, S.C., market is a merchandise display of bananas.
In fact, about 75% of the space in the stores, which continue to be owned and operated by Rite Aid, is devoted to food products offered by Save-A-Lot, a subsidiary of Supervalu Inc. Those products include a selection of fresh meat, processed smoked and packaged meat, frozen food, dairy and dry groceries.
“The stores in the test had a solid pharmacy business, but they needed stronger sales on the front end,” explains Bernard. “We chose Save-A-Lot because of its strong sales record; wide selection of attractively priced, exclusive brands; and solid reputation for discount grocery and because it’s a model efficient for Rite Aid associates to operate.”
The stores, which remained open during the conversion, are located in convenient places along major highways as well as in local neighborhoods, and they range in size from about 9,000 square feet to 12,000 square feet.
Five of the co-branded stores are in Greenville; the others are in the South Carolina communities of Easley, Greer, Simpsonville (two) and Travelers Rest.
“Part of the reason for our success is that we sent our managers to Save-A-Lot so that they could learn more about that operation to better understand the grocery shopper, as a complement to their knowledge and expertise in the drug channel,” says Bernard.
He adds that besides seeing the fruit, produce and meat selections after entering the stores, customers are quickly attracted to a merchandising presentation in which best-selling dry goods and canned items receive prominent display and are later relegated to traditional floor space upon the entry of newer items.
“This format really appeals to the one-stop shopper,” notes Bernard.
And although the economy has played havoc with most retailers, Bernard and Rite Aid regional vice president Peter Barnett believe that the recession has actually helped boost sales because the stores carry such a significant selection of lower-cost items.
Besides the Save-A-Lot products, often at prices 40% below those of conventional supermarkets, the stores carry the Rite Aid brands as well as low-cost cosmetics. In fact, the cosmetics section of the co-branded stores, which includes popular $2 trial sizes of cosmetics products, is promoted with signage that reads “Looking Good Does Not Have to Be Expensive.”
Although the grocery sections and other front-end departments have reaped the most benefits for the Save-A-Lot Rite Aid stores, “the new co-branded format has positively impacted our pharmacy business as well,” adds Rite Aid pharmacy district manager Jodi Smith.
“We did a variety of free health screenings in conjunction with the openings of the 10 stores,” she explains, offering blood pressure, glucose, cholesterol and bone density screenings as examples.
For example, for the February observance of Heart Month, the outlets offered healthy heart screenings, at which customers had the opportunity to go online and receive a heart score.
