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Rite Aid and Save-A-Lot Combo Stores Could Expand

December 21, 2010

Rite Aid and Save-A-Lot combo stores "have done extremely well since opening," Rite Aid CEO John Standley revealed, adding that the two chains are exploring expanding the concept to additional locations.

Rite Aid store frontIn September, Rite Aid signed a licensing agreement with Supervalu’s Save-A-Lot to co-brand 10 existing drug stores in the Greenville, S.C., market to include the discounter's limited assortment grocery and private label lines.

Camp Hill, Pa.-based Rite Aid continues to own and operate the locations, and offer health and beauty products, including its own private label items.

Standley revealed interest in expanding the concept during the company’s quarterly call with analysts, adding that preliminary results are “very encouraging.”

"The stores have done extremely well since opening and as a group are comping up over 100 percent on the front end with pharmacy running consistent with the trends before the conversion,” Standley said. “Feedback from our Rite Aid customers has been extremely positive, and adding Save-A-Lot to these stores has attracted many new customers.”

The 10-store test is part of Rite-Aid’s “segmentation strategy,” COO Ken Martindale previously disclosed, noting that since early 2009 the company has been transitioning from operating all of its stores the same to identifying unique opportunities among like groups of stores.

“It’s exciting to take a store that was a low-volume store that was doing $20,000 a week on the front-end and make it do $60,000 or $70,000,” Standley said. “That’s a pretty good answer for us and we have some real estate that fits this demographic very nicely.”