Rite Aid Corporation's (RAD) main competitors include Walgreens (WBA), CVS Health Corporation (CVS), and Walmart Stores, Inc. (WMT). It also faces minor competition from independently owned drugstores and from pharmacies in large chain grocery stores such as The Kroger Company (KR).
History of Rite Aid
The Rite Aid chain started as the Thrif D Discount Center in 1962, a spinoff of founder Alex Grass's Rack Rite Distributors. Three years later, the chain had 21 additional retail outlets. The 22nd store added a pharmacy, changing its name to Rite Aid, and the entire company officially adopted that name in 1968. As of 2015, it is the largest drugstore chain on the East Coast, and the third-largest chain nationally, with 4,600 stores in 31 states.
Rite Aid stores carry a combination of pharmaceuticals and consumer staples. In addition to filling prescriptions and selling over-the-counter remedies, Rite Aid also sells cosmetics, food and drink, stationery supplies, hygiene and grooming supplies, and other basic consumer goods. In 2014, Rite Aid acquired RediClinic, a Texas-based health care chain and began opening RediClinics inside its own stores.
Competitors of Rite Aid
The Walgreens Company is the United States' largest retail pharmacy chain, with more than 8,200 stores throughout the 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. In 2014, it bought out Europe's Alliance Boots pharmacies, giving the newly formed Walgreens Boots Alliance retail stores on two continents.
CVS Health Corp. operates 7,800 stores under the brand names CVS Pharmacy (in the continental U.S.) and Long's Drugs (in Hawaii). CVS is partnered with the pharmacy benefits management (PBM) system Caremark. In 2014, CVS announced it would stop selling tobacco products in all locations, and began charging a higher copay to Caremark members who filled prescriptions at other pharmacies that still sold tobacco. In reaction, rival company Rite Aid announced in February 2015 that it would acquire its own PBM, EnvisionRX.
Walmart reported more than 4,500 stores as of March 31, 2015, with 90% of Americans living within 15 minutes of a location. Nearly all Walmart stores include a pharmacy. That department, along with grocery and electronics, is one of the company's three strongest areas; together, the three account for two-thirds of Walmart's business. Since 2008, Walmart has sold generic medications for $4 for a 30-day supply and $10 for a 90-day supply.
Independent pharmacies are any drugstores that are privately owned or not part of a large national chain. Taken all together, independent pharmacies constitute an $88.8 billion share of the marketplace, with 92% of those sales coming from prescription drugs. Many independent pharmacies distinguish themselves from retail chains by offering home delivery of prescriptions.
Large chain grocery stores such as Kroger and Safeway have their own pharmacy departments within their stores. These locations mainly rely on existing grocery customers, rather than trying to woo new customers with expanded health care services as other pharmacy chains do.