6 ms·

Rite Aid's 'Zombie' stores take over America

36 points by DocFeind 2y ago

pavel_lishin 2y ago
> But the question remains, why is Rite Aid struggling so much? Especially when it seems to me, in the Jersey suburbs outside of NYC, CVS and Walgreens are doing just fine.
- kthejoker2 2y ago
  FTA > Meanwhile, Walgreens is also having a tough time. The pharmacy giant said in October it would close roughly 1,200 U.S. stores over the next three years, including 500 locations in fiscal 2025. In June, it said about 8,600 locations would be shuttered over the next few years.
- bell-cot 2y ago
  > The company’s massive debt load and ongoing legal battles have further pushed it to the brink. If burdened with sufficient debt, there is no such thing as a viable business.
- TingPing 2y ago
  CVS is successful because they became an insurance company. They have acquired 18 companies in 10 years.
lupusreal 2y ago
The last few times I've gone to one of these pharmacy stores (Walgreens, Rite Aid, etc) they had the same inventory as my grocery store's pharmacy section but spread out over 20x the area.
- jgalt212 2y ago
  And they probably don't have the product locked down to stymie the shoplifters.
  - ceejayoz 2y ago
    More importantly, about half the price per item.
  - mapt 2y ago
    Remind me why we don't do big vending machines for retail like Japan does?
    - skyyler 2y ago
      Because people don't vandalise the vending machines as often in Japan.
    - TingPing 2y ago
      Higher vandalism rates maybe.
    - add-sub-mul-div 2y ago
      I frequently pick up products to read the packaging in order to decide what to buy.
    - rincebrain 2y ago
      Imagine if you wanted to buy all your groceries for the week, and had to order them and pay for them one at a time from the grocery store at separate vending machines. Now remember that, in theory at least, basically everything in the pharmacy that is not behind the counter is more or less the equivalent of the candy by the register in grocery stores, for pharmacies - something they hope you'll go "oh, yeah, I could use that" and buy. ...of course, given that most of the pharmacies I've been to have started locking 90% of their stuff behind "call an associate" barriers anyway, vending machines would probably be a better-scaling model, but that becomes a little awkward because you can't easily mix "things you must go pay at the register for" and "things you bought from the machine", and I think in the limit case you wind up with something like Amazon's experiments in checkoutless groceries to make this work, or a store that's just rows of vending machines and then the pharmacy at the back.
jmclnx 2y ago
I miss the days of ma and pa Drug Stores. I and others are always fighting with stores like CVS, Walgreens all the time. Back then, no real issues.
- sneak 2y ago
  It seems to me that the modern American way is duopoly. You have unlimited free market capitalist choice: you can choose Google or Apple, Walgreens or CVS, Lowe’s or Home Depot, Kroger or Walmart, Uber or Lyft, Cox or Centurylink, Ford or Chevy. It’s like a cosplay free market. It feels like everywhere at all times, people are playing dirty to protect their cash flows, doing anything they can get away with to keep new entrants out of markets. They even weaponize it against other giants, too (eg JEDI, or wielding the EPA against SpaceX). This doesn’t seem like a failure of capitalism to me, but a failure of government. Not that the government failed to regulate, no; that they were explicitly captured in such a way that results in regulation that ensures nobody except the existing, connected players can participate. If you want to have even a tiny chance to edge in, you have to be backed by immense capital and be connected with someone who can put in a word with the right people. In tech, VCs like YC or a16z or the so-called PayPal mafia come to mind. Innovation, but only via undocumented, preapproved channels. It’s illegal or effectively illegal to make new pharmaceutical factories, or new retail pharmacies, or new hospitals, or new financial services and payment systems, or new banks, or new safe deposit boxes, or transit services, or ISPs, or schools, or any myriad other verticals that have been regulated to oblivion for entrants in the name of “consumer safety”. If search engines or public libraries were invented today they’d be shut down in days, perhaps hours. Even Tesla fought the biggest uphill battle to be able to sell cars direct to consumers, as it was outlawed in many states. I really want to see orders of magnitude more new small businesses, but the American population seems to be regarded as a resource to be harvested rather than an economic talent pool to be developed. Everyone wants more mom-and-pops, except the existing ownership class, because they aren’t on SecondMarket.
  - benreesman 2y ago
    There’s this weird glitch in our collective psyche where an arbitrarily bloated and rapacious central committee fixing prices and wages and regulations in favor of an insular elite is somehow still called “capitalism” as long as the party insiders are called things like “CEO” or “venture capitalist”. It’s late USSR economics with feel good nomenclature. With e.g. Elon Musk getting heavily involved in government in sort of a vague way we’re stepping into some new stage of this. We must slash entitlements to fund corporate tax cuts comrade. Apparently we’re kind of over it on even pretending a tiny corporate elite doesn’t just directly set policy in flagrant, naked, unapologetic self-interest. Capitalism sounds dope: I hope I live to see it.
silisili 2y ago
The modern 'drug store' kinda baffles me. Compared to a grocery - worse selection of grocery items and drugs, worse laid out, at worse prices. Then I wonder who they are trying to cater to. If it's a smaller and quicker grocery experience, they're competing with nearly every dollar store and gas station. In my experience at least, they're often severely understaffed and not at all quicker. I guess grocery and online expanding into prescriptions, and the death of print photo were a one-two punch. What's interesting is that they've been declining for years, and at least to myself the consumer, don't appear to be trying to do anything different.
- Molitor5901 2y ago
  The entire point of a "modern drug store" is to fill prescriptions. All of those grocery items, etc. are there just to supplement the prescription business, which far and away is the bulk of revenue for that location. It's like gas stations that sell food.
  - deadbabe 2y ago
    Why hasn’t someone created a pure prescription play with very small real estate and focused only on filling prescriptions?
    - datadrivenangel 2y ago
      You can't get a lease that small in most areas.
      - esafak 2y ago
        Why?
        rincebrain 2y ago
        Because usually leases aren't new custom property sizes, they're of existing spaces, and if only your kind of thing will fit in there, why would they carve up their larger space to have spots that size?
WD-42 2y ago
Is there an actual article here? So many ads and link blocks all I managed to find was one paragraph.
- hoppyhoppy2 2y ago
  My condolences. I use an adblocker, and I'm seeing an article of about a dozen short paragraphs.
Molitor5901 2y ago
Stores like Rite Aid, Walgreens, etc. primarily exist - to me at least and I think to many - to fill prescriptions. The pharmacy segment accounts for around 65-70% of Rite Aid's revenue. I think the stores are closing because the costs of prescriptions keep going up, insurance is paying less, and the people who depend on those prescriptions are going elsewhere; Amazon, Walmart, etc. If drug costs were lower then we would see more independent pharmacies, and probably more chains, but in this economy..
- nradov 2y ago
  For retail pharmacies the problem isn't so much the cost of prescription drugs but rather the impact of PBMs on the industry. https://www.commonwealthfund.org/publications/explainer/2019/apr/pharmacy-benefit-managers-and-their-role-drug-spending https://www.commonwealthfund.org/publications/explainer/2019...
- bpev 2y ago
  I never really ever went to Rite Aid except for, as a kid, we went to go there to get Thrifty Brand Ice Cream. It's actually pretty decent, and they'd always use a giant scoop.
  - darknavi 2y ago
    Very neat, I've never seen a Rite Aid with an ice cream area.
- bongodongobob 2y ago
  I think it may be even higher than that. I worked for ShopKo ~15 years ago and I seem to remember optical and pharmacy being like 85% of sales.
- rincebrain 2y ago
  I was frustrated with my local Duane Reade's failures, randomly marking scripts as "call us to fill" when I tried to fill them online, only to then say "oh yeah it'll be ready in XYZ" "can you tell me why you made me call you?" "no it just does that sometimes." So I tried a bunch of local pharmacies, which were all much worse experiences in various ways (failure to fill scripts because they couldn't source things, their online systems straight up didn't work, the lines to pick things up were very long...) Then I tried Capsule, which was great...at first. Then one day, they completely failed to deliver a med I was about to run out of, and their "24/7 live chat" took 4+ hours to respond that they couldn't get it to me until after I would have missed a dose, and when I replied to that, got an automated message that it was closed for the day. So now I just suck it up and deal with the Duane Reade, because there is so much further down to go.
divbzero 2y ago
Of the remaining drug store chains in America, CVS Pharmacy might be the best positioned because it’s both largest in scale and vertically integrated with pharmacy benefit manager CVS Caremark.
- rafram 2y ago
  Rite Aid owned their own PBM, Elixir, until earlier this year. They sold it as part of their bankruptcy.
JohnMakin 2y ago
It’s a shame, I have had a longstanding condition that occasionally requires medication that is not readily available in some pharmacies or that pharmacists occasionally will not even want to stock. CVS is such a miserable experience I stopped going years ago, walgreen’s much the same. My rite aid, which maybe is a local quirk, for whatever reason is extra attentive to my needs, medication refills take just a few minutes, they’ll call to remind me about things and regularly contact my doctor’s office to see if they need to stock anything. It’s been great and I’ll be really sad if it closes.
- facialwipe 2y ago
  I’d recommend giving Amazon Pharmacy or their subsidiary, PillPack a gander to see if they stock your medication.
  - darknavi 2y ago
    I've had a lot of success with Cost Plus Drug as well.
    - Aurornis 2y ago
      Be aware that Cost Plus Drug is also heavy on marketing. The few times I’ve checked it was not actually the cheapest cash-pay option. They have cleverly, although transparently, applied the fee model to prescriptions. You see one price on their page, but when you get to checkout the total price inclusive of everything might be more expensive than your local Walmart. Their marketing is incredibly effective, though. I can’t believe how many people think Cost Plus must be the cheapest option who are then shocked to discover the same prescription is $4 at their local Walmart.
      - facialwipe 2y ago
        It also takes 7-10 days to get your script from Cost Plus.
  - wenc 2y ago
darknavi 2y ago
In the Pacific Northwest RiteAid bought a local chain called Bartell Drugs. Since then they have really slumped. I am hoping they don't get snuffed out with the RiteAid brand stores.
IronWolve 2y ago
I switched to amazon pharmacy, I get 90 days delivered in mail at 1/3rd the price, and only 1 co-pay vs 3 co-pays, and higher prices. Plus the local rite aid has had supply issues.
Molitor5901 2y ago
Does the pharmacy lobby have any role in this? Pharmacist associations have been lobbying to expand what they can do and get in on the pie, for example now able to give vaccine injections. Perhaps a solution is to automate the pharmacy process more so people can be freed up from counting pills to helping customers.

36 points by DocFeind 2y ago

> But the question remains, why is Rite Aid struggling so much? Especially when it seems to me, in the Jersey suburbs outside of NYC, CVS and Walgreens are doing just fine.

kthejoker2 2y ago
FTA > Meanwhile, Walgreens is also having a tough time. The pharmacy giant said in October it would close roughly 1,200 U.S. stores over the next three years, including 500 locations in fiscal 2025. In June, it said about 8,600 locations would be shuttered over the next few years.
bell-cot 2y ago
> The company’s massive debt load and ongoing legal battles have further pushed it to the brink. If burdened with sufficient debt, there is no such thing as a viable business.
TingPing 2y ago
CVS is successful because they became an insurance company. They have acquired 18 companies in 10 years.

lupusreal 2y ago

The last few times I've gone to one of these pharmacy stores (Walgreens, Rite Aid, etc) they had the same inventory as my grocery store's pharmacy section but spread out over 20x the area.

jgalt212 2y ago
And they probably don't have the product locked down to stymie the shoplifters.
- ceejayoz 2y ago
  More importantly, about half the price per item.
- mapt 2y ago
  Remind me why we don't do big vending machines for retail like Japan does?
  - skyyler 2y ago
    Because people don't vandalise the vending machines as often in Japan.
  - TingPing 2y ago
    Higher vandalism rates maybe.
  - add-sub-mul-div 2y ago
    I frequently pick up products to read the packaging in order to decide what to buy.
  - rincebrain 2y ago
    Imagine if you wanted to buy all your groceries for the week, and had to order them and pay for them one at a time from the grocery store at separate vending machines. Now remember that, in theory at least, basically everything in the pharmacy that is not behind the counter is more or less the equivalent of the candy by the register in grocery stores, for pharmacies - something they hope you'll go "oh, yeah, I could use that" and buy. ...of course, given that most of the pharmacies I've been to have started locking 90% of their stuff behind "call an associate" barriers anyway, vending machines would probably be a better-scaling model, but that becomes a little awkward because you can't easily mix "things you must go pay at the register for" and "things you bought from the machine", and I think in the limit case you wind up with something like Amazon's experiments in checkoutless groceries to make this work, or a store that's just rows of vending machines and then the pharmacy at the back.

jmclnx 2y ago

I miss the days of ma and pa Drug Stores. I and others are always fighting with stores like CVS, Walgreens all the time. Back then, no real issues.

sneak 2y ago
It seems to me that the modern American way is duopoly. You have unlimited free market capitalist choice: you can choose Google or Apple, Walgreens or CVS, Lowe’s or Home Depot, Kroger or Walmart, Uber or Lyft, Cox or Centurylink, Ford or Chevy. It’s like a cosplay free market. It feels like everywhere at all times, people are playing dirty to protect their cash flows, doing anything they can get away with to keep new entrants out of markets. They even weaponize it against other giants, too (eg JEDI, or wielding the EPA against SpaceX). This doesn’t seem like a failure of capitalism to me, but a failure of government. Not that the government failed to regulate, no; that they were explicitly captured in such a way that results in regulation that ensures nobody except the existing, connected players can participate. If you want to have even a tiny chance to edge in, you have to be backed by immense capital and be connected with someone who can put in a word with the right people. In tech, VCs like YC or a16z or the so-called PayPal mafia come to mind. Innovation, but only via undocumented, preapproved channels. It’s illegal or effectively illegal to make new pharmaceutical factories, or new retail pharmacies, or new hospitals, or new financial services and payment systems, or new banks, or new safe deposit boxes, or transit services, or ISPs, or schools, or any myriad other verticals that have been regulated to oblivion for entrants in the name of “consumer safety”. If search engines or public libraries were invented today they’d be shut down in days, perhaps hours. Even Tesla fought the biggest uphill battle to be able to sell cars direct to consumers, as it was outlawed in many states. I really want to see orders of magnitude more new small businesses, but the American population seems to be regarded as a resource to be harvested rather than an economic talent pool to be developed. Everyone wants more mom-and-pops, except the existing ownership class, because they aren’t on SecondMarket.
- benreesman 2y ago
  There’s this weird glitch in our collective psyche where an arbitrarily bloated and rapacious central committee fixing prices and wages and regulations in favor of an insular elite is somehow still called “capitalism” as long as the party insiders are called things like “CEO” or “venture capitalist”. It’s late USSR economics with feel good nomenclature. With e.g. Elon Musk getting heavily involved in government in sort of a vague way we’re stepping into some new stage of this. We must slash entitlements to fund corporate tax cuts comrade. Apparently we’re kind of over it on even pretending a tiny corporate elite doesn’t just directly set policy in flagrant, naked, unapologetic self-interest. Capitalism sounds dope: I hope I live to see it.

silisili 2y ago

The modern 'drug store' kinda baffles me. Compared to a grocery - worse selection of grocery items and drugs, worse laid out, at worse prices. Then I wonder who they are trying to cater to. If it's a smaller and quicker grocery experience, they're competing with nearly every dollar store and gas station. In my experience at least, they're often severely understaffed and not at all quicker. I guess grocery and online expanding into prescriptions, and the death of print photo were a one-two punch. What's interesting is that they've been declining for years, and at least to myself the consumer, don't appear to be trying to do anything different.

Molitor5901 2y ago
The entire point of a "modern drug store" is to fill prescriptions. All of those grocery items, etc. are there just to supplement the prescription business, which far and away is the bulk of revenue for that location. It's like gas stations that sell food.
- deadbabe 2y ago
  Why hasn’t someone created a pure prescription play with very small real estate and focused only on filling prescriptions?
  - datadrivenangel 2y ago
    You can't get a lease that small in most areas.
    - esafak 2y ago
      Why?
      - rincebrain 2y ago
        Because usually leases aren't new custom property sizes, they're of existing spaces, and if only your kind of thing will fit in there, why would they carve up their larger space to have spots that size?

WD-42 2y ago

Is there an actual article here? So many ads and link blocks all I managed to find was one paragraph.

hoppyhoppy2 2y ago
My condolences. I use an adblocker, and I'm seeing an article of about a dozen short paragraphs.

Molitor5901 2y ago

Stores like Rite Aid, Walgreens, etc. primarily exist - to me at least and I think to many - to fill prescriptions. The pharmacy segment accounts for around 65-70% of Rite Aid's revenue. I think the stores are closing because the costs of prescriptions keep going up, insurance is paying less, and the people who depend on those prescriptions are going elsewhere; Amazon, Walmart, etc. If drug costs were lower then we would see more independent pharmacies, and probably more chains, but in this economy..

nradov 2y ago
For retail pharmacies the problem isn't so much the cost of prescription drugs but rather the impact of PBMs on the industry. https://www.commonwealthfund.org/publications/explainer/2019/apr/pharmacy-benefit-managers-and-their-role-drug-spending https://www.commonwealthfund.org/publications/explainer/2019...
bpev 2y ago
I never really ever went to Rite Aid except for, as a kid, we went to go there to get Thrifty Brand Ice Cream. It's actually pretty decent, and they'd always use a giant scoop.
- darknavi 2y ago
  Very neat, I've never seen a Rite Aid with an ice cream area.
bongodongobob 2y ago
I think it may be even higher than that. I worked for ShopKo ~15 years ago and I seem to remember optical and pharmacy being like 85% of sales.
rincebrain 2y ago
I was frustrated with my local Duane Reade's failures, randomly marking scripts as "call us to fill" when I tried to fill them online, only to then say "oh yeah it'll be ready in XYZ" "can you tell me why you made me call you?" "no it just does that sometimes." So I tried a bunch of local pharmacies, which were all much worse experiences in various ways (failure to fill scripts because they couldn't source things, their online systems straight up didn't work, the lines to pick things up were very long...) Then I tried Capsule, which was great...at first. Then one day, they completely failed to deliver a med I was about to run out of, and their "24/7 live chat" took 4+ hours to respond that they couldn't get it to me until after I would have missed a dose, and when I replied to that, got an automated message that it was closed for the day. So now I just suck it up and deal with the Duane Reade, because there is so much further down to go.

divbzero 2y ago

Of the remaining drug store chains in America, CVS Pharmacy might be the best positioned because it’s both largest in scale and vertically integrated with pharmacy benefit manager CVS Caremark.

rafram 2y ago
Rite Aid owned their own PBM, Elixir, until earlier this year. They sold it as part of their bankruptcy.

JohnMakin 2y ago

It’s a shame, I have had a longstanding condition that occasionally requires medication that is not readily available in some pharmacies or that pharmacists occasionally will not even want to stock. CVS is such a miserable experience I stopped going years ago, walgreen’s much the same. My rite aid, which maybe is a local quirk, for whatever reason is extra attentive to my needs, medication refills take just a few minutes, they’ll call to remind me about things and regularly contact my doctor’s office to see if they need to stock anything. It’s been great and I’ll be really sad if it closes.

facialwipe 2y ago
I’d recommend giving Amazon Pharmacy or their subsidiary, PillPack a gander to see if they stock your medication.
- darknavi 2y ago
  I've had a lot of success with Cost Plus Drug as well.
  - Aurornis 2y ago
    Be aware that Cost Plus Drug is also heavy on marketing. The few times I’ve checked it was not actually the cheapest cash-pay option. They have cleverly, although transparently, applied the fee model to prescriptions. You see one price on their page, but when you get to checkout the total price inclusive of everything might be more expensive than your local Walmart. Their marketing is incredibly effective, though. I can’t believe how many people think Cost Plus must be the cheapest option who are then shocked to discover the same prescription is $4 at their local Walmart.
    - facialwipe 2y ago
      It also takes 7-10 days to get your script from Cost Plus.
- wenc 2y ago

darknavi 2y ago

In the Pacific Northwest RiteAid bought a local chain called Bartell Drugs. Since then they have really slumped. I am hoping they don't get snuffed out with the RiteAid brand stores.

IronWolve 2y ago

I switched to amazon pharmacy, I get 90 days delivered in mail at 1/3rd the price, and only 1 co-pay vs 3 co-pays, and higher prices. Plus the local rite aid has had supply issues.

Molitor5901 2y ago

Does the pharmacy lobby have any role in this? Pharmacist associations have been lobbying to expand what they can do and get in on the pie, for example now able to give vaccine injections. Perhaps a solution is to automate the pharmacy process more so people can be freed up from counting pills to helping customers.