Camp Hill, Pa. -based Rite Aid will get a buyer after a failed merger past year. Albertsons, which also owns Safeway stores, would rebrand its in-store pharmacies under the Rite Aid name, and would continue to operate some stand-alone Rite Aid pharmacies.
Rite Aid Corp. said earlier this year that it runs around 4,400 stores. Rite Aid's well-known brand and pharmacy expertise should help Albertsons attract new customers to its in-grocery pharmacies. "We are confident that delivering improved customer experiences and value will drive growth and profitability while creating compelling long-term value for shareholders".
Meanwhile, a third location at 153 Grant Ave.is preparing to become part of Albertsons Cos., a supermarket chain founded and headquartered in Idaho.
"This powerful combination enables us to become a truly differentiated leader in delivering value, choice and flexibility to meet customers' evolving food, health and wellness needs", Standley said.
She said a more personalized service and cost are generally the reason why people come to her pharmacy from others. CVS, which already has an enormous pharmacy-benefit management (PBM) market in Caremark, is in the process of buying insurer for $77 billion, while Walgreens Boots Alliance is reportedly looking at drug wholesaler AmericourceBergen.
Rite Aid is one of the nation's largest drugstore chains with fiscal 2017 annual revenues of $32.8 billion.
Rite Aid shares gained 7.3 percent to $2.29 at 9:33 a.m.in NY. The Board of Directors will be comprised of nine directors, four of whom will be named by Albertsons (including Miller and Lenard Tessler, Vice Chairman and Senior Managing Director at Cerberus), four of whom will be named by Rite Aid (including Standley) and one of whom will be a jointly selected director.
What does this merger mean for the industry going forward?
The company reached an agreement with Instacart in November to provide on-demand grocery delivery services and invested past year in El Rancho Supermercado, a Texas-based retailer focused on stores for Latino customers.
The companies estimate that over 40 million customers per week will be affected by the change. So far so good. Albertsons even has launched a digital platform created to give CPG brands access to shopper data to help them deliver targeted ad campaigns, showing that it is very serious about engaging consumers at all points of the shopper journey. "The company has struggled for better than a decade to consistently grow, and its far-flung and complex components I believe are the major reason for this lack of progress". And, with retail stocks in general being hammered by the disruption of online shopping, it is a buyers' market. HBK Investments L P now owns 1,699,108 shares of the company's stock worth $3,347,000 after acquiring an additional 459,108 shares during the period.
Albertsons owns about 2,300 supermarket stores mainly on the east and west coasts of the United States and also operates about 1,800 pharmacies. Deutsche Bank began coverage on shares of Rite Aid in a report on Monday, December 4th. "It just won't be very pretty".
Miller told the Wall Street Journal on Tuesday the merger was a way for Albertsons and Rite Aid to stay competitive against large retailers such as Walmart and online giant Amazon. The transaction is anticipated to close in the second half of 2018.