Business

This is the Rite Aid of the future

Posted November 9, 2020 8:07 a.m. EST

— Rite Aid is betting that new stores that put pharmacists at the front instead of the back will help it draw customers at a time when competition from online shopping is surging.

The company opened a "store of the future" Monday in Moscow, Pennsylvania. It includes lower shelves to improve visibility and more natural light, with signs and display fixtures moved away from windows. In addition to a new location for the pharmacist that makes the person more accessible to customers, the store has a "wellness room" where customers can schedule a visit with a licensed clinician.

This is the third store of its kind for the chain, and Rite Aid has plans to open two more next year. Its opening comes at a time when drugstore chains are facing growing competition from online retailers like Amazon as well as big box stores like Walmart and Target that are drawing more customers in the pandemic. That makes it more critical for Rite Aid to make its stores more of a destination.

"We have to provide more of an experience than we've provided in the past to get customers to shop these stores," Erik Keptner, chief merchandising and marketing officer at Rite Aid, said in an interview. "Many pharmacies, including ourselves, have traditionally been a bit of a maze to navigate."

Rite Aid had 2,461 US stores during its last fiscal year ending February, a smaller number than rivals CVS or Walgreens. .

Rite Aid is allocating more space for beauty and personal care items, as well as vitamins and supplements, and less for stationary and household appliances. It will also carry CBD items.

Rite Aid's new store prototype comes as drug stores face declining foot traffic. Visits to drug stores fell more than 13% from the prior year for the four weeks ending on October 25, according to market research firm IRI, even as they grew at grocery stores, dollar stores and warehouse clubs.

Pharmacies have been squeezed by people filling fewer prescriptions in stores during the pandemic with some doctor's offices closed, many elective procedures on hold and more shoppers switching to mail order.

Consumers are also limiting their trips to stores because of the coronavirus and buying in bulk more often. This has hurt drug stores, which carry a smaller variety of products and are designed to be fill-in stops for customers outside of their bigger weekly hauls at grocery stores or warehouse clubs.

"The pandemic has created some interesting shopper dynamics. No doubt some of the other channels of trade benefit more than the drug channel does," said Keptner.

But he believes drug stores will have a stronger winter as more people come in for flu shots and is hopeful a future coronavirus vaccine will also draw customers.

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