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A typical Rite Aid pharmacy from the later 1990s and earlier 2000s.

Rite Aid ( ) is one of the leading drugstore chains in the United Statesmarker and a Fortune 500 company. It operates more than 4,900 stores in 31 states and the District of Columbia, features a strong presence on both the East and West Coasts, and employs approximately 109,000 associates. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S.

Rite Aid began in 1962 as a single store opened in Scranton, Pennsylvaniamarker called Thrif D Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Today, Rite Aid is headquartered in Wormleysburgmarker, a suburb of Harrisburg, Pennsylvaniamarker, and is publicly traded on the New York Stock Exchange under the ticker RAD. Rite Aid reported total sales of USD $24.3 billion in fiscal year 2008. , its market capitalization has dropped to under $500 million.

Its major competitors are CVS and Walgreens.


Alexander Grass founded the Rite Aid chain in Scranton, Pennsylvania, as Thrif D Discount Center. The first store opened in September 1962. Through acquisitions and new stores, Rite Aid quickly expanded into 5 northeast states by 1965. The chain was officially named Rite Aid Corporation in 1968 and made its debut on the American Stock Exchangemarker. It moved to the New York Stock Exchangemarker in 1970.

Growth and acquisitions

Just ten years after its first store opened, Rite Aid operated 267 locations in 10 states. It was named the third largest drugstore in the United Statesmarker by 1981; shortly thereafter, 1983 marked a sales milestone of $1 billion. A 420-store acquisition along the east coast expanded Rite Aid's holdings beyond 2,000 locations. Among the companies acquired was Baltimore, Marylandmarker's Read's Drug Store.

Rite Aid acquired twenty-four Hooks Drug stores from Revco in 1994, selling nine of those stores to Perry Drug Stores, a Michigan-based pharmacy chain. One year later, the 224-store Perry chain itself was acquired by Rite Aid. The 1,000-store West Coast chain Thrifty PayLess was later acquired in 1996. The acquisition of Thrifty PayLess included the Northwestmarker-based Bi-Mart membership discount stores, which was sold off in 1998. Acquisitions of Harco, Inc. and K & B Inc. brought Rite Aid into the Gulf Coast area.

Partnership with GNC

General Nutrition Companies (GNC) and Rite Aid formed a partnership in January 1999, bringing GNC mini-stores within the Rite Aid pharmacies. A partnership with in June 1999 allowed customers of Rite Aid to place medical prescription orders online for same-day, in-store pickup.

Company troubles

In the fall of 1999, Rite Aid was the subject of several media reports about its aggressive marketing of pharmaceutical products and other consumer-unfriendly practices, including selling date-sensitive products well past the due dates. Rite-Aid is the largest pharmacy chain in California. It has recently been investigated by government regulators in California, Washington, and Oregon. Consumer Complaints Regarding Rite Aid Pharmacy

Rite Aid also had a major accounting scandal that led to the departure (and subsequent jail time) of several top ranking executives, including the CEO, Martin Grass, son of company founder Alexander Grass. Former Rite Aid vice chairman Franklin C. Brown is serving a 10-year sentence in a medium-security facility at Butner Federal Correctional Complex in Raleigh, North Carolina.[123016] At the time, Rite Aid had just acquired Thrifty Payless Drug and was integrating those into the company. As a result, Leonard Green, who ran the investment firm that had sold those stores to Rite Aid, took control of the company and placed Mary Sammons from Fred Meyer in as CEO. Sammons instituted a number of reforms of Rite Aid's business and has returned the company to credibility and profitability.

July 2001, Rite Aid agreed to improve their pharmacy complaint process by implementing a new program to respond to consumer complaints.

On July 25, 2004, Rite Aid agreed to pay $7 million to settle allegations that the company had submitted false prescription claims to United States government health insurance programs.

In August, 2007. Rite Aid acquired approximately 1,850 Brooks/Eckerd Stores throughout the United States in hopes to improve their accessibility to a wider range of consumers. On December 21, 2007, The New York Times reported that Rite Aid had record breaking losses that year, despite the acquisition of the Brooks and Eckerd chains.The following fiscal quarter saw an increase in revenue but a sharp fall in net income as Rite Aid began the integration process. Rite Aid shares fell over 75% between September 2007 and September 2008, closing at a low of $0.98 on September 11, 2008. Rite Aid shares dropped as low as $0.20 of February 23, 2009.

Labor violations

In spring of 2006, more than 600 workers at Rite Aid’s Lancastermarker, CA distribution center started organizing a union to improve working conditions that included triple-digit heat in the summer and freezing temperatures in the winter.

In July 2006, a Rite Aid employee died while working at the warehouse during a heat wave. The incident increased concern among workers that excessive heat may have contributed to the worker’s death. A bill was introduced in the California State Assembly to address heat in warehouses following the incident. Workers were also troubled with Rite Aid’s requirement of mandatory overtime with no advance notice, a policy that prevented family members from caring for their children. Finally, management’s use of a computerized tracking system, known as “ProRep,” sparked worker concern because the system promoted arbitrary standards, led to safety short-cuts, and increased the risk of dangerous workplace injuries.

Rite Aid management responded to these concerns by implementing a union-busting campaign. By March, 2007, the National Labor Relations Board documented 49 violations of federal labor laws against Rite Aid. Rather than face a trial before NLRB officials, Rite Aid was allowed to settle the charges.

Flaws in existing labor law allowed Rite Aid to settle the 49 violations at little or no consequence. Rite Aid was required to rehire several workers they illegally fired or suspended, and provide back wages minus any wages the workers had earned to survive in the meantime. Rite Aid was also required to post a notice in the plant for 60 days, promising not to violate the laws again. The list included:

• warning, disciplining, demoting, suspending and firing people who take part in union activities;

• retaliating against people who testify to the NLRB;

• threatening that people will lose their raises if they vote for the union; and

• disparaging union supporters in materials posted at the facility.,

Despite the history of employer threats and retaliation, workers decided to proceed with a union election in March, 2008. More than 500 Rite Aid workers voted, and a majority voted in favor of union representation.

Since winning the election, workers say they have been stymied by Rite Aid’s refusal to negotiate in good faith to reach terms on a first union contract. Stalling tactics are frequently used by employers in the United States to effectively deny workers a union. Since voting for the union in March 2008, workers had met 14 times during the following 10 months, but Rite Aid refused to bargain any substantive issues, agreeing only to trivial matters such as the placement of bulletin boards. Rite Aid workers have offered to meet around-the-clock, made reasonable proposals, and encouraged top officials to participate in the contract talks; management has declined the offers as of February 1, 2009.

On February 13, 2009, workers held 14 rallies in four states (Californiamarker, Oregonmarker, Washingtonmarker and Pennsylvaniamarker) at targeted Rite Aid retail outlets to support the Employee Free Choice Act and to urge Rite Aid to negotiate and reach a fair union contract with its Lancaster distribution center workers. Hundreds of union members from dozens of industries attended the rallies in support of the Rite Aid workers' right to join a union and bargain for better working conditions.

Living More

Beginning in March 2005, Rite Aid introduced Living More, a seniors' loyalty program; offering 10% off of prescription drugs purchased with cash, generic products, as well as other items. Additional benefits also include discounts on certain days of the week, as well as unadvertised sales on merchandise. This program is very similar to the former Revco program which was called "Senior Shoppers"; Rite Aid attempted to purchase Revco in 1996. This might be attributed to the fact that Revco's former Vice President of Marketing, James Mastrian, once held the same position at Rite Aid.

Merger with Eckerd and Brooks

On August 23, 2006, the Wall Street Journal announced that Rite Aid would be buying the Eckerd Pharmacy and Brooks Pharmacy chains (Brooks Eckerd Pharmacy) from the Quebec-based Jean Coutu Group for US$3.4 billion, and merging the two chains into one dominant pharmacy system. The company's shareholders overwhelmingly approved the merger on January 18, 2007.[123017] After some store closures and the conversion of the two chains to Rite Aid is complete, the deal will make Rite Aid the dominating drug store retailer in the Eastern U.S., and secures its place as the third largest drug retailer nationwide (behind the faster growing Walgreens and CVS chains).

Similar to what CVS has gone through in Chicagolandmarker after its purchase of Albertson's drug store chains, the deal had left Rite Aid with some locations in close proximity to each other. (Only 23 store locations nationally were sold off to Walgreens, The Medicine Shoppe, or independent owners in order to meet federal regulations.) In many situations, especially Pennsylvania where both chains were dominant and had roots in those states (Rite Aid originated in Scranton, while Eckerd has roots in Western Pennsylvania via Eriemarker for itself and Pittsburghmarker for converted Thrift Drug locations), there were now two Rite Aids as close as right next door to each other. However, in March 2008 some of these overlapping stores were closed, with the locations saying that they "moved" to a new address, when in fact they "moved" to the other Rite Aid that was nearby. Most of these stores that closed were pre-existing Rite Aids from before the Eckerd deal, since Eckerd had built newer, more modern locations with drive-thru pharmacies and larger space under ownership of both J. C. Penney and Jean Coutu Group, and the "moved to" sites were converted Eckerds. Employees at the closed stores were transferred to the nearby locations, so no layoffs were necessary.

Rite Aid had sold some locations to J. C. Penney's Thrift Drug chain in the mid-1990s shortly before J.C. Penney's acquisition of Eckerd, and had also sold all of their Massachusetts stores to Brooks in 1995, bringing some existing Eckerd and Brooks stores that were once Rite Aids full circle.

Because Eckerd was previously owned by J.C. Penney, Eckerd stores accepted J.C. Penney charge cards. Since the merger, all Rite Aids accept J.C. Penney charge cards.

On December 21, 2007, The New York Times reported that Rite Aid had record breaking losses this year, despite the acquisition of the Brooks and Eckerd chains.[123018]

Market exits

On January 4, 2008, Rite Aid Corporation announced that it will terminate its operation of the 28 Rite Aid stores in the Las Vegas, Nevadamarker area and has signed an agreement to sell patient prescription files of the 27 stores in the Las Vegas metro market to Walgreens. Terms of the transaction were not disclosed.

Rite Aid said it will continue to operate its remaining store in Nevada in Gardnervillemarker, which is close to the border of Californiamarker where Rite Aid has more than 600 stores. Rite Aid said Las Vegas was a non-core market for the company that has not been contributing to overall results. The company hasn't opened a new store in the Las Vegas area since 1999.

On February 5, 2009, Ride Aid Corporation announced that it will terminate its operations of 12 Rite Aid stores in the San Francisco, California and Eastern Idaho areas through a sale to Walgreens. [123019]


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