CUMBERLAND COUNTY, Pa. (WHTM) — The Rite Aid along Wertzville Road in Silver Spring Township will close Sept. 26, confirmed the company — and, for that matter, a sign in the store’s window. (More precisely, it said: “We’re moving.”)
That’s how Victoria Greenberg, shopping Thursday morning at the store, learned the news.
“Everybody is very knowledgeable, from the pharmacists to the cashiers. I’m sorry to see that they’ve decided to close it,” Greenberg said. “Really, it’s a shame.”
The news comes less than a month after the closure of a Rite Aid in Camp Hill. Prescriptions currently filled at the 7036 Wertzville Road store will be transferred when it closes to the store at 5201 Spring Road in Shermans Dale, Perry County.
Rite Aid shares on the New York Stock Exchange closed Thursday at 69 cents, down 92 percent from their 52-week high of $8.51. Analysts say they believe the company is preparing to file for Chapter 11 bankruptcy protection. Rite Aid said it doesn’t “comment on rumors or speculation.”
Observers expect Rite Aid to close hundreds of stores if it files for bankruptcy.
Where? Well, there could be both micro and macro answers to that question.
As for considerations within markets, “the big one really comes down first and foremost to store performance: ‘Does this store do the numbers we want?'” said Garrick Brown, vice president of real estate intelligence for California-based Gallelli Real Estate.
That means revenue as well as costs, he said. A store might have good sales figures but an expensive lease, from which a company can use Chapter 11 to extract itself.
“A decision to close a store is one we take very seriously and is based on a variety of factors including business strategy, lease and rent considerations, local business conditions and viability, and store performance,” the company confirmed in a statement.
Or sometimes companies that shrink in bankruptcy choose to exit entire geographical markets. Which ones might make Rite Aid’s list, if it does that?
“Probably the places that will get hit the most will be those markets where there’s a minimal presence, because usually that means that they don’t have as much customer loyalty there,” Brown said.
Also, companies can find it inefficient to do things like advertise and maintain warehouses in areas where they don’t have many stores.
Which areas would fit that description for Rite Aid?
Here — according to an exclusive analysis of store visits for abc27 News by Placer.ai — are a few of Rite Aid’s weaker markets by market share among the big three pharmacy chains:
| Metro area | Rite Aid | CVS | Walgreens |
|---|---|---|---|
| Cleveland | 15% | 47% | 38% |
| Detroit | 15% | 56% | 29% |
| New York City | 10% | 53% | 36% |
Here are a few markets where Rite Aid is either No. 1 or No. 2 by the same metric:
| Metro area | Rite Aid | CVS | Walgreens |
|---|---|---|---|
| Pittsburgh | 47% | 31% | 22% |
| Buffalo | 48% | 20% | 32% |
| Wilkes-Barre/Scranton | 32% | 63% | 4% |
| Harrisburg/York/Lancaster/Lebanon | 28% | 67% | 5% |
Brown said although he feels quite sure Rite Aid will file for Chapter 11, he’s equally sure the chain will survive a trip through bankruptcy.
“It’s a really safe bet that they will almost certainly not only file but emerge from Chapter 11, probably 6 to 12 months down the road, leaner and meaner, with a better balance sheet — and then also in a better position to deal with the inevitability of what they’ll pay out in the opioid cases,” Brown said.
CVS and Walgreens are already paying about $5 billion each to settle opioid-related lawsuits.
