RETAIL NEWS

A leaner, greener ‘new Rite Aid’ unveiled at J.P. Morgan conference

BY Michael Johnsen

Rite Aid today unveiled the “new Rite Aid,” a small but nimble, bicoastal regional chain that executives told the 36th Annual J.P. Morgan Healthcare Conference on Wednesday will have the same buying power over the next 10 years of its one-time suitor Walgreens Boots Alliance. Though the chain has recently become deleveraged due to the 1,932 stores sold to Walgreens, company leaders said they have plans to invest that new-found financial flexibility into the front-end experience of its remaining 2,569 stores, 63% of which already represent the better-performing Wellness store format.

Leading the charge is Kermit Crawford, Rite Aid president and COO, an experienced retail pharmacy executive who over the past several months has become more familiar with the talent pool at Rite Aid.

“Our biggest strength is really our people,” he said. “A hardworking, dedicated and passionate group of people that really want to build this ‘New Rite Aid.’”

Crawford’s all-star team includes Bryan Everett, COO of Rite Aid Stores; Jocelyn Konrad, executive vice president pharmacy; Derek Griffith, executive vice president store operations; David Abelman, executive vice president marketing; Bill Jackson, senior vice president supply chain; and Bill Renz, senior vice president merchandising.

The new Rite Aid will have operations across 19 states, most notably in California, Pennsylvania and Michigan.

“The store base that we’re left with is very strong,” John Standley, Rite Aid chairman and CEO said Wednesday. “We’re going to have higher front-end sales [and] higher pharmacy sales per-store than the old company. We end up with a great asset base when we’re done with this transaction and we’re excited about where we can go moving forward.”

Standley said that Rite Aid’s net debt will fall from $6.7 billion as of Dec. 2 to $2.9 billion following the completion of store sales to Walgreens. Also following the deal, Rite Aid’s average per-store total sales will climb from $5,725 to $6,227 and the average per-store weekly scripts filled will grow from 1,252 to 1,342.

In his presentation to J.P. Morgan, Crawford outlined six key initiatives that will help redefine Rite Aid’s front-end shopping experience, including:

  • Immunizations. “We’re having a very successful flu season program,” Crawford said. “We’re going to be up 9% year-over-year.”;
  • Wellness stores. “We’re really excited about the Wellness store innovations,” he said, “Our front-end comps are coming in at 176 basis points and Rx 240 basis points, over the rest of our chain.”;
  • Wellness + loyalty program. “We have over 20 million active members in our program as of the end of December,” he said. “The data that we’re getting from these loyalty programs is helping us to understand who [our shopper] is and why she is shopping our stores.”;
  • Localized product assortment. “We have a tremendous opportunity when it comes to localizing our product assortment,” he said. “We’re going to make our stores more tailored … to the communities that we serve, adding things like DME to certain select markets.”;
  • Private label. “We have six brands today, over 4,000 items. We’re doing over $1 billion in sales,” he said. “We have a tremendous opportunity to differentiate our front-end offering through these private brand products. We know we have the quality and the standards in place. It’s a matter of driving this business much greater than we have in the past.”; and
  • Omnichannel. “Our best customers are heavily engaged in our app and our website,” he said. “Our online marketing is being targeted and segmented based on this [loyalty] data that we’re getting.”

Across the back bench, the new Rite Aid will gain access to the WBAD generic purchasing option once the transfer of 50% of the 1,932 stores to Walgreens has been completed. “This is huge,” Crawford said. “One of the concerns we’ve heard is ‘You’re a smaller company, are you going to be able to buy as well?’ This gives us the confidence that we will be able to buy our generic purchasing at a very competitive rate.”

Beyond a competitive generics purchasing position, Rite Aid will be counting on its PBM EnvisionRx, along with the 22 million lives covered, to serve as a significant point of difference in the markets Rite Aid serves. “EnvisionRx will serve as a growth engine for our entire company,” Crawford said. “[It’s] a full-service PBM platform with all capabilities in-house with a comprehensive suite of offerings that will be offered both as a bundle and an ‘a la carte.'”

Crawford added EnvisionRx is the gateway to a stronger presence in specialty, where today Rite Aid is managing approximately 5,000 patients. “We have to be a player in that specialty business,” he said. “We have access to the limited distribution drugs, all of the injections, infusions, oral and biologicals and a tremendous cost-savings program around managing waste and improving outcomes and adherence. One of the assets we have is Health Dialog. Health Dialog has the analytics, the research and predictive modeling that we think can differentiate our EnvisionRx offering and help us better manage these high-cost patients.”

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Report: Amazon is preferred retailer of more than 75% of U.S. customers

BY Drug Store News Team

Seventy-six percent of Americans shopping online this holiday season expect to make most purchases on Amazon, according to CNBC’s “All-America Economic Survey.”

While Walmart comes in second place, the retailer lags far behind its rival. Only 8% of Americans who shop online are visiting the discount giant to search or check prices, according to CNBC.

American online shoppers are also using Amazon as their go-to search engine, with 65% of online shoppers searching on Amazon all or most of the time. This is up sharply each of the last two years, the study reported.

The online giant is also the clear winner when it comes to online conversion or the rate of getting consumers who browse to follow through with a purchase. While the average rate of overall online conversion at around just 3%, Amazon has a whopping 57% of searchers buying on the site always or most of the time, according to the study.

To read more, click here.

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Walgreens announces Christmas hours

BY Gisselle Gaitan

Walgreens is catering to last-minute shoppers in more than one way. The Deerfield, Ill.-based company has announced that it will be open on both Christmas Eve and Christmas Day. Aside from extended store hours, customers are encouraged to order gifts and products online by December 20, to guarantee delivery in time for the holiday.

“Even during the most wonderful time of the year, it may be difficult to remember everyone on our list. With an elevated product assortment, including many gifts under $20, Walgreens looks to make it easy to be holiday ready, especially when it comes to finding gifts last-minute,” Heather Hughes, head of seasonal merchandising for Walgreens said. “Whether it’s a beauty gift set, cozy pair of slippers with a box of candy for a party host, or a last-minute gift card that’s sure to bring joy, we are standing by to help customers find the perfect gift that will delight this holiday season.”

Pharmacies will be open at all 24-hour locations for any prescription needs. Store locations and hours and be found by visiting the company’s website, or calling 1-800-WALGREENS.

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