• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick Rite Aid bankruptcy means pharmacies will keep dwindling
Editor's Pick

Rite Aid bankruptcy means pharmacies will keep dwindling

by October 17, 2023
by October 17, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Rite Aid, the third-largest U.S. drugstore chain, filed for Chapter 11 bankruptcy protection Sunday, and it’s likely the company will close a big chunk of its 2,000 stores.

One result is that people will have fewer options for where they fill their prescriptions. That has been the trend in drugstores lately, and it looks like they’ll dwindle further.

The Wall Street Journal reported in September that Rite Aid might close 400 to 500 stores as part of bankruptcy proceedings. (The company hasn’t confirmed the report.) CVS is closing 300 stores per year, a process that began last year and is expected to continue into next year, and Walgreens announced in June that it would close about 150 U.S. stores by next summer.

At the same time, big box chains and grocery stores like Walmart and Target are opening pharmacies in their stores, and more people are getting their medications delivered through apps.

The decline of the neighborhood pharmacy

So a consumer reading this news might think, ‘So what? Nobody likes going to drugstores.’ And that’s partly the point.

Drugstores have done the wrong thing over and over again, said Neil Saunders, the managing director at the consulting company GlobalData. The result is that people don’t want to shop at them, and that has made lots of openings for competitors.

“You go into the store, usually they’re badly lit, they are fairly depressing, there isn’t lot of great customer service, the products are locked very often, there aren’t enough staff to help, the prices are very expensive relative to other retailers,” Saunders told NBC News. ‘They’ve shot themselves in the foot, and now they’re reaping the consequences of all those years of poor decisions and underinvestment.”

Poor decisions, crushing debt and failed deals

Rite Aid’s bankruptcy filing wasn’t a surprise, because the 60-year-old chain has been in dire financial shape for a long time. It has lost money in each of its last six fiscal years, it had already been closing stores to cut spending, and it was looking at a $1 billion charge related to its role in the opioid crisis.

CVS and Walgreens have paid similar settlements, but it was much harder for Rite Aid to do so. In recent years, the stock market has valued Rite Aid in the tens of millions of dollars even though it had $24 billion in sales last year.

Rite Aid’s downfall arguably dates to its purchase of the Brooks and Eckerd chains in 2007. The company borrowed money to pay for the deal and also assumed some of the debt of Brooks and Eckerd’s former parent company, the Canadian drugstore company Jean Coutu Group.

At one point, Rite Aid agreed to be bought by Walgreens, but the deal fell through. Walgreens ultimately sold almost 2,000 stores, and Rite Aid unsuccessfully pursued other deals to stabilize its business.

The company had $3.3 billion in long-term debt as of June 3.

All that debt made it harder for Rite Aid to invest in its stores or to expand and branch out into new businesses the way its rivals did. CVS now has more than 1,000 clinics in its stores, and it bought a pharmacy benefits manager and a health insurer over the years. Walgreens and CVS both expanded into some types of primary care, as well.

But Saunders said all three have neglected their stores as they have prioritized the health care parts of their businesses over the retail parts.

‘They are not good retailers. None of them,’ he said. ‘They just haven’t really evolved and changed with the times at all.’

As Rite Aid shrinks even further, it will create opportunities for all of its rivals to boost their sales. Saunders said there will always be a place for physical pharmacies.

‘We’re still going to have a physical pharmacy retail space, but it’s going to be somewhat smaller than it has been traditionally,’ he said.

This post appeared first on NBC NEWS
You Might Also Like
  • Listings for Stanley tumblers are still attracting dozens of bids on eBay for hundreds of dollars
  • Warren Buffett says bank runs would have been ‘catastrophic’ without government intervention
  • Microsoft to cut 3% of its workforce
  • A lack of child care is keeping this 43-year-old mother of four out of the workforce
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Hamas claims it will ‘protect’ hostages, release them ‘when circumstances on the ground allow’
next post
An Award Announcement With a Dash of Market Commentary

You may also like

Restaurant chain Hooters files for bankruptcy protection to enable founder-led buyout

April 1, 2025

First Republic’s stock sinks as analysts monitor banking sector stress,...

May 3, 2023

Target sales ebb after Pride month shopper backlash; company cuts...

August 17, 2023

Even as inflation cools, many Americans take financial hits to...

April 14, 2023

GM cuts 50% of Cruise staff after ending robotaxi business

February 5, 2025

Ex-employee charged with stealing $22M from Jacksonville Jaguars for luxury...

December 8, 2023

Walgreens to go private in roughly $10 billion deal

March 8, 2025

GM lays off more than 1,000 salaried software and services...

August 20, 2024

Black founders who banked with SVB fear backsliding on hard-won...

March 18, 2023

IRS plans to pay 1 million taxpayers up to $1,400....

December 24, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Is This Rally Sustainable? You Better Bet Your Bullish Sweet Dollar It Is!

      June 30, 2025
    • Pullbacks & Reversals: Stocks Setting Up for Big Moves!

      June 30, 2025
    • Microsoft says goodbye to the Windows blue screen of death

      June 30, 2025
    • The Best Five Sectors, #25

      June 30, 2025
    • Apple reveals complex system of App Store fees to avoid E.U. fine of 500 million euros

      June 30, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,619 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,903 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,594 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,559 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,436 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,153)
    • Investing (538)
    • Stock (2,643)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Is This Rally Sustainable? You Better Bet Your Bullish Sweet...

      June 30, 2025
    • Pullbacks & Reversals: Stocks Setting Up for Big Moves!

      June 30, 2025
    • Microsoft says goodbye to the Windows blue screen of death

      June 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,153)
    • Investing (538)
    • Stock (2,643)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Walmart launches new grocery brand as...

    May 1, 2024

    Mortgage demand grows, driven by sales...

    June 29, 2023

    IAC approves spinoff of home improvement...

    January 14, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here