Rite Aid ranks a distant third (behind Walgreen and CVS) in the US retail drugstore business, with nearly 4,600 drugstores in some 30 states and the District of Columbia. Rite Aid stores generate roughly 70% of their sales from filling prescriptions, while the rest comes from selling health and beauty aids, convenience foods, greeting cards, and more, including some 3,500 Rite Aid brand private-label products. More than 60% of all Rite Aid stores are freestanding and over half have drive-through pharmacies. The company was founded in 1962 and is being purchased by pharmacy leader Walgreens Boots Alliance.


In addition to its retail pharmacy chain, Rite Aid operates more than 2,200 GNC stores-within-Rite Aid-stores that sell vitamins and mineral supplements through a partnership with General Nutrition Companies, Inc. Rite Aid, which considers the in-store GNC departments to be a differentiator between it and its larger rivals, is contractually obligated to open at least 230 more GNC LiveWell stores-within-stores by the end of 2019. About 50% of Rite Aid stores had a GNC store inside as of February 2015.

The chain also offers health care services, including flu shots, other immunizations, and diabetes management consultants, at its drugstores.

Geographic Reach

Rite Aid operates stores in 31 states and the District of Columbia. Its largest markets are New York, California, and Pennsylvania, home to more than a third of its drugstores.

Sales and Marketing

The retailer pushes its wellness + loyalty program to keep customers coming back to its stores. Wellness + members accounted for 78% of front-end sales and 67% of prescriptions filled in fiscal 2015 (ended February).

The average Rite Aid store has about 10,000 square feet of selling space and roughly 12,600 square feet of total space.

The retailer spent $318.2 million on marketing and advertising in FY2014, with the money primarily being used toward weekly circular, broadcast, and digital advertising. It spent $318.16 thousand on advertising (net of vender advertising allowances) for the year, down from $322.84 thousand and $335.78 thousand in FY2013 and FY2012, respectively.

Financial Performance

Rite Aid has struggled to grow its sales much past the $26 billion mark over the past few years, though it's been enjoying healthy annual profit growth as its paid down its debt and slashed redundant store locations.

The drug retailer's sales rose by 4% to $26.53 billion in fiscal 2015 (ended February) mostly thanks to a 3.5% jump in same-store pharmacy sales driven by a combination of brand drug price inflation, higher prescription usage in Medicaid expansion states, and an increase in immunization and flu incidents. Rite Aid also enjoyed higher revenue from its new Health Dialog and RediClinic businesses (acquired in April 2014) as well as higher front-end same store sales thanks to the positive impacts of its Wellness + loyalty programs and Wellness format stores and other management initiatives.

Rite Aid's net income skyrocketed to a record $2.1 billion thanks to higher revenue in FY2015, as well as lower debt retirement costs and decreased interest expenses, reflecting the company's efforts to reduce its long-term debt levels. Notably, fiscal 2015 marked the third consecutive year of profitability for the chain after years in the red after acquiring the Brooks and Eckerd stores back in 2007.

The drug retailer's cash from operations dipped to $649 million in FY2015 after earnings were adjusted for deferred taxes.


Rite Aid reiterated its strategy in 2015 to accelerate its transformation into a neighborhood destination for health and wellness, much like its rivals Walgreen and CVS. That was part of what attracted Walgreen parent Walgreens Boots Alliance and made it bid $9.4 billion, with another $7.8 billion in debt assumption, for the company. The combined retailer would be #2 in the US, with 13,000 US drug stores, further dwarfing CVS' 7,800. Regulators have to approve the deal first though.

Rite Aid has been opening dozens of new stores with RediClinics in many of them, and remodeling hundreds of stores to its Wellness store format, which boasts improved interior design, expanded clinical pharmacy services, and new wellness product offerings and merchandising. In FY2015, the chain converted 450 stores to its Wellness store format (after converting some 400 stores the year before), which brought the total number of Wellness stores to 1,634 by the end of the year. The retailer plans to add another 400 Wellness remodels in fiscal 2016.

To grow existing store sales, the retailer has been pushing its immunization services and loyalty membership programs such as the the Wellness +, which rewards customers with redeemable points with every purchase from Rite Aid. In 2015, the company expanded on its successful loyalty program with the enhanced Wellness + with Plenti savings program, as well as the Wellness 65+ loyalty program for seniors, which now boasts over 1.7 million members. Also in 2015, in continuing its focus on immunizations, the retailer launched its Vaccine Central online and in-store program to promote the importance of vaccinations and allow customers to track their specific immunization needs.

Rite Aid also strategically acquires companies that complement its health service offerings or expand its retail market reach. In 2015 and 2014, it purchased RediClinic and its 30 retail clinics in central Texas to emphasize its wellness strategy, and two companies that expanded its pharmacy benefit management expertise and its health care analytics.

Additionally, through recent partnerships with drug distributors, Rite Aid expects to grow business and enhance its purchasing and distribution efficiencies to fuel its long-term growth plans. In fiscal 2014, for example, Rite Aid expanded its agreement with drug distributor McKesson for pharmaceutical purchasing and distribution. As part of the new five-year agreement, McKesson assumed responsibility for purchasing all brand and generic medications dispensed in Rite Aid stores, as well as delivering them to the chain's 4,600 locations.

Mergers and Acquisitions

In February 2015, Rite Aid agreed to acquire Ohio-based EnvisionRx, a national, full service pharmacy benefit management (PBM) company. The deal emphasized Rite Aids move toward becoming a retail healthcare company, and allowed it to enhance its pharmacy offerings across its retail, specialty, and mail-order channels to employers and health plans seeking more cost-effective solutions.

In April 2014, Rite Aid acquired Boston-based Health Dialog, a provider of health coaching, shared decision making tools and health care analytics, from Bupa, a London based international health care services group. Health Dialog will operate as a 100% owned subsidiary of Rite Aid. The purchase furthered Rite Aid's goal of advancing its Health Alliance program.

Also in April 2014, the company bought Houston-based RediClinic, an operator of 30 retail clinics in the greater Houston, Austin, and San Antonio areas, to further its health and wellness strategy. Rite Aid paid a combined $86 million and assumed debt of $2.5 million related to the two purchases.

Company Background

In 2006, Rite Aid acquired more than 1,850 Brooks and Eckerd drugstores from Canada's Jean Coutu Group for about $4 billion, which saddled the company with plenty of debt and some redundant stores. After years in the red after acquiring the Brooks and Eckerd stores back in 2007, Rite Aid returned to profitability after it closed redundant and underperforming stores. The years of sustained losses had left Rite Aid short on cash to make improvements to stores or to move them to better locations.

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30 Hunter Ln
Camp Hill, PA 17011-2400
Phone: 1 (717) 761-2633
Fax: 1 (717) 731-3878


  • Employer Type: Public
  • Stock Symbol: RAD
  • Stock Exchange: NYSE
  • Chairman and CEO: John T. Standley
  • Senior Vice President: Todd McCarty
  • Chairman and CEO: John T. Standley

Major Office Locations

  • Camp Hill, PA
  • Harrisburg, PA

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