1 week Ago By Jack Hobbs
RITE Aid and other pharmaceutical companies continue to face a rapid decline in foot traffic as they face heavy competition from other vendors. Many companies such as CVS and Walgreens have also faced a steady decline and have been forced to reevaluate their business model. Several chain pharmacies have also faced competition from giants such as Amazon and Walmart .
“Between the pressure on the front of the store plus the pressure on the pharmacy, it’s just getting harder and harder for these guys to operate,” industry insider Brian Tanquilut told The Seattle Times . According to Tanquilut, the two largest pharmacy benefit management companies, OptumRx and Caremark, have been attempting to cut costs, which in turn hurt the pharmacies. “The PBMs, all of which now are owned by the insurance companies, have been squeezing what they pay for drugs,” Tanquilut said.
“As that has continued to come down, the profitability of these pharmacies has also waned." Read More On Rite Aid One shopper said that during her last visit to Rite Aid, she noticed that many of the shelves in the store were empty. “My kids go to Costco now,” Darleen Stoker told the outlet.
“Rite Aid is more for when you realize last minute you need nail polish.” A second shopper revealed the shelves in the store had been empty for at least two months. Most read in Money RITE AID WOES In 2023, it was reported that Rite Aid had filed for Chapter 11 bankruptcy.
The brand has since closed more than 200 stores and announced in July that it planned to shut down more locations as the brand dealt with creditors and lawsuits over opioid prescriptions. Rite Aid was initially supposed to be acquired by Walgreens in 2015, however, the deal fell through. “The remaining Rite Aid stores face a lot of the challenges that they were facing when they were trying to bridge with Walgreens,” Tanquilut said.
Despite the vast amount of store closeures, the pharmacutical company has insisted that it's moving forward. Even though it filed for bankruptcy in 2023, Rite Aid insists that it is moving forward. Last week, the company announced that it had successfully completed its financial restructuring and emerged from Chapter 11.
“Emergence is a pivotal moment in Rite Aid’s history, enabling it to move forward as a significantly transformed, stronger and more efficient company,” said Jeffrey S. Stein, Chief Executive Officer and Chief Restructuring Officer said in a press release . “We are grateful for the ongoing support of our customers, associates and partners, and we look forward to continuing to provide leading pharmacy services designed to improve health and wellness outcomes across the communities we serve.
I am excited about Rite Aid’s future as it continues to focus on executing its strategy and delivering for its customers and stakeholders.” “It’s a lot of pressure from other retailers, whether that’s the dollar stores, the Walmarts, the Targets of the world, or online retail like Amazon.” In April, the pharmacy closed an additional 16 stores bringing the total number of shuttered stores up to 266.
“Rite Aid regularly assesses its retail footprint to ensure we are operating efficiently while meeting the needs of our customers, communities, associates, and overall business,” said the pharmacy chain in a statement. “In connection with the court-supervised process, we notified the Court of certain underperforming stores we are closing to further reduce rent expense and strengthen overall financial performance.” 'OVER-PHARMACIED' Tanquilut stated that one way for Walgreens, CVS and Rite Aid could weather the storm would be to continue to shut down their brick-and-mortar stores.
According to the insider, the amount of pharmaceutical companies in the US is way too high. Read More on The US Sun “We are ‘over-pharmacied’ as a society,” Tanquilut said. “From a profitability perspective and from a competition perspective, reducing the number of retail pharmacies is not a bad thing.
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