Has Rite Aid found the right prescription for growth?
Rite Aid looks like it might be getting on a mini roll after years of struggling to compete in a retail drugstore market dominated by CVS and Walgreens.
The Camp Hill, PA-based chain saw its same-store sales increase 3.5 percent in the second quarter as its front-end performance jumped 6.1 percent and its pharmacy numbers rose 2.3 percent. The same-store gain marked the third straight quarter in which Rite Aid has moved that metric in a positive direction.
At the company’s analyst day in March, president and CEO Heyward Donegan introduced Rite Aid’s “RXEvolution” strategy that includes unlocking the power of the chain’s pharmacists and “revitalizing” the shopper experience in stores and online. Rite Aid would succeed, she said, by helping “our customers not just get healthy, but get thriving.”
The latest example of RXEvolution is the news that Rite Aid has opened two pilot locations in its home state to test its “store of the future” strategy, according to a PennLive report. The company already has plans to remodel seven additional locations with the same layout.
The prototypes feature more natural lighting than the typical Rite Aid and lower end caps to enable shoppers to see the entire store when they enter. The retailer has also made use of spotlights in the middle of the store to draw visual attention inward.
Rite Aid has given the pharmacies in the stores a more modern feel and reworked the space to provide more direct access to pharmacists. Techs are being used in more ways to help free up time for pharmacists to engage with customers.
Rite Aid has revamped the beauty section in the new stores. Positioned near the entrance, the new departments feature employee beauty ambassadors to answer customer questions and consult on purchases.
The core customer for Rite Aid is seen as a woman between the ages of 25 and 49, and this shows up in other changes made to the front of the store, like an expanded selection of healthier snacks.
Erik Keptner, the chain’s chief merchandising and marketing officer, said the changes being made by Rite Aid are more than just aesthetics.
“We’re changing work processes for our people so we’re trying to move some of the shelf spacing activities off of peak customers hours so that our associates can better serve the customer,” he told PennLive.
- Rite Aid Corporation Reports Fiscal 2021 Second Quarter Results – Rite Aid Corporation
- Rite Aid debuts its ‘store of the future’ – Penn Live
- Rite Aid Corporation (RAD) CEO Heyward Donigan on Q2 2021 Results (Earnings Call Transcript) – Seeking Alpha
- Rite Aid Corporation Reports Fiscal 2021 First Quarter Results – Rite Aid Corporation
- Rite Aid to Outline Corporate Strategy and Growth Plan at Analyst Day – Rite Aid Corporation
- Rite Aid Corporation Reports Fiscal 2020 Fourth Quarter and Full Year Results – Rite Aid Corporation
- Is Rite Aid already headed for a turnaround? – RetailWire
DISCUSSION QUESTIONS: Do you think Rite Aid has begun putting itself in a better position to be successful this year? What will it take to continue building on this start and take it to the next level?