Rite Aid is continuing its restructuring efforts by closing approximately 30 additional locations in the US, on top of the 100 closures the company already announced last month. The latest closures were revealed in a bankruptcy court filing, with stores shutting down in a dozen states. When both rounds of closures are complete, Rite Aid will have about 2,000 stores remaining. The company declined to comment on the recent development.
Rite Aid has faced significant challenges in the face of competition from Amazon and large retail chains like Walmart, Target, and Costco. Furthermore, legal troubles stemming from allegations of illegal opioid prescriptions have compounded the company's difficulties. Rite Aid's financial situation is significantly worse than its competitors, having incurred losses of almost $3 billion over the past six years, with its stock plummeting more than 90% in the past year.
However, the company has secured financing and debt reduction agreements to navigate through bankruptcy. Store closures and the sale of certain businesses, including prescription benefit provider Elixir Solutions, are part of Rite Aid's plans to address its financial and legal issues. The declining profitability of prescription sales has prompted Rite Aid and its competitors to reduce their physical footprints in recent years. Other major pharmacy chains, such as CVS and Walgreens, have also announced store closures in response to market challenges. The consulting firm McKinsey notes that the number of independent pharmacies has decreased by almost 50% from 1980 to 2022.