Rite Aid's Private Label Share Rises

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October 4, 2011

Rite Aid's turnaround continues as the chain sees top line growth for the first time in more than three years and increases private label market share by one percentage point, thanks to a more cohesive and expanded private label program.

"For the quarter, our private brand penetration increased to 17.2 percent from 16.2 percent last year," said John Standley, president and CEO. "Key accomplishments during the quarter included a continued rollout of our new private brand architecture. We now have 1,800 items converted, and we are on track to have 2,900 items in these brands this fiscal year."

The program is helping to fuel Rite Aid's top line, and front-end sales increased by 2.5 percent and pharmacy sales grew 2 percent. Revenues for the quarter were $6.3 billion, a 1.8 percent increase from last year's second quarter.

Over the past year, Rite Aid has introduced a new packaging design and refreshed some items in the Rite Aid Pharmacy health products, including Renewal personal care and beauty line, Pantry foods and household goods, Tugaboos baby line and Simplify, a value-priced brand.

But even as Rite Aid stores grow sales, the Save-A-Lot /Rite Aid combo store concept appears to be dead. “We still continue to show solid sales gains, however, margins in these stores have not been strong enough to take advantage of the sales increases,” said Standley. “We still like the grocery concept and think it can work in certain of our stores. We have not been able to create an economic model with Supervalu that makes sense for both parties, and therefore, we will not be expanding the Save-A-Lot format with them. We will continue to run these 10 stores as Save-A-Lot Rite Aids.”

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