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Rite Aid store closings mark shopper acquisition opportunity for other merchants
Customer base demographics show strong a consumer profile in attractive markets for grocery, foodservice and health care-related businesses.
4 Min Read
Late last month, Rite Aid identified another 32 stores in 10 states to be shut, on top of 193 stores previously earmarked for closure. / Photo: Shutterstock
As Rite Aid closes more stores under its bankruptcy plan, retailers in the drug chain’s market areas will have the opportunity to lure an attractive group of shoppers, according to research by consumer data specialist Numerator.
In a notice filed late last month with the U.S. Bankruptcy Court for New Jersey, Philadelphia-based Rite Aid named another 32 stores in 10 states that it aims to shut.
The list of planned closures in the Nov. 21 court filing included five stores each in Pennsylvania and Ohio; four locations apiece in Washington and Michigan; three stores each California, Virginia and Connecticut; two locations apiece in New Jersey and Oregon; and one store in New York. All of the stores are under the Rite Aid banner except for one Bartell Drugs store in Seattle.
Facing a barrage of opioid lawsuits, a high debt load and poor financials, among other challenges, Rite Aid announced on Oct. 16 that it filed for Chapter 11 bankruptcy protection. In court filings that day, Rite Aid said it earmarked 154 stores in 15 states for closure. On Oct. 17, A&G Real Estate Partners—serving as an adviser to Rite Aid in the store divestiture process—announced that the drug chain put up 99 store sites for sale in 12 states under its Chapter 11 plan.
Then in an early November court filing, Rite Aid identified an additional 39 stores in 10 states that it aims to shut. A&G also announced another 92 Rite Aid and Bartell store leases up for sale in eight states.
The Wall Street Journal had reported in late September that Rite Aid was readying a Chapter 11 plan that included the closure of 400 to 500 stores, divestiture of its remaining locations and operations, or the turning over of these assets to creditors. At the time of the Chapter 11 filing, Rite Aid operated 2,111 stores under the Rite Aid and Bartell Drugs banners in 17 states, mainly on the East and West Coasts.
Rite Aid shoppers: Strong demographics, key markets
“Rite Aid filed for bankruptcy protection in October 2023 and is expected to close upwards of 500 stores in the coming year. What does this mean for other retailers looking to win over some of the 10-plus million Rite Aid shoppers?” Chicago-based Numerator stated in an emailed report on Thursday.
Over the past year, 27% of U.S. consumers have shopped at Rite Aid, with these customers skewing toward urban and multicultural families, Numerator said. The research firm noted that, compared with total U.S. shoppers, Rite Aid customers spend $3,800 more per household at all retail stores.
Deli and prepared foods, produce, alcoholic beverages and packaged baked goods stand as the top four categories that over-index among Rite Aid shoppers, according to Numerator. Certain promotions also have appealed to Rite Aid customers, with the retailer’s top offer types for the 52 weeks through Sept. 30 including “save” (42%), “sale price” (27%), “buy multiple items and save” (13%), “promo tactic” (11%), and “buy one get one” (6%), the researcher reported.
Currently, 85% of Rite Aid customers also shop at CVS Pharmacy and/or Walgreens. Still, other retailers operating pharmacies can win prescription trips and other health care-related visits from displaced Rite Aid shoppers, Numerator said.
In the 52 weeks through Sept. 30, Rite Aid shoppers made 6.6 Rx trips to the chain’s stores, 11.2 Rx trips to drug stores and 13.1 Rx trips to all stores, Numerator’s data showed. The research also revealed that Rite Aid customers over-index in a range of health conditions, such as inflammatory bowel disease (30% more likely than the average consumer), osteoporosis (29% more likely), back pain (29% more likely), arthritis (19% more likely) and bronchitis (17% more likely).
Geographically, top metropolitan markets for Rite Aid retail sales include the Los Angeles-Long Beach-Anaheim/Riverside-San Bernardino-Ontario area in California ($1.2 billion), the New York-Newark-Jersey City area ($1.2 billion), the Philadelphia-Camden-Wilmington area ($831 million), Pittsburgh ($484 million) and the Detroit-Warren-Dearborn area ($332 million).
Potential new tenants for the Rite Aid sites include dollar stores, gyms, grocers, specialty discount stores and quick-serve restaurants, New York-based A&G reported back in October when announcing the first 99 Rite Aid locations being marketed. These spaces range 6,400 to 37,154 feet and are located in downtowns, strip centers, power centers and freestanding sites, including high-visibility stores with drive-thru windows, the real estate firm said.
Such properties are in “high demand” because of their sizes, according to A&G Senior Managing Director Mike Matlat. “We anticipate robust interest from a wide array of retail operators, as well as non-retail medical, health, wellness and service-related businesses,” he stated at the time.
In November, A&G reported that the 92 additional Rite Aid sites being marketed range from 5,000 to 33,548 square feet and include 53 freestanding locations (44 with attached one- or two-lane drive-throughs) plus 36 stores in strip or power center sites and three in central business districts.
“The lack of new build of this type of product is driving demand for these leases,” Andy Graiser, co-president of A&G Real Estate Partners, commented at the time, adding that such as leases and properties were “once were out-of-reach locations in attractive markets across the United States.”
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