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Our Wellness Journey Continues: Shifting from Turnaround to Growth

In a celebration that was many years in the making, Chairman and CEO John Standley kicked off Rite Aid’s Annual Store Operations Meeting by making a proud declaration about the company’s recent performance.

John Standley

Rite Aid Chairman and CEO John Standley talks about the company’s successful reinvention and return to profitability at the Annual Store Operations Meeting.

In front of nearly 1,000 company leaders at the Gaylord Convention Center in Washington, D.C., Standley declared that Rite Aid’s historic turnaround, which included a reinvention of the Rite Aid brand and a return to profitability, is now complete.

“Mission accomplished. We did it,” Standley told the audience of field, supply chain and corporate leaders. “It was one of the best turnarounds in retail history, and it wouldn’t have happened without your efforts.”

With Rite Aid’s turnaround in the rearview mirror, Standley said it’s time to more aggressively pursue opportunities for growth while accelerating the company’s ongoing wellness transformation. He outlined key areas of focus that will help set the stage for a new chapter of growth at Rite Aid, including:

  • Ramping up efforts to build new stores
  • Expanding the new Rite Aid Health Alliance program
  • Adding clinics to Rite Aid stores
  • Further enhancing wellness+
  • Implementing the new pharmaceutical distribution agreement with McKesson
  • Strengthening Rite Aid’s pharmacy service offering
  • Delivering a consistently outstanding experience for associates and customers

By succeeding in these key areas, Standley said Rite Aid would take significant steps toward achieving its ultimate goal on the Road to Wellness: “To become a growing, thriving and sustainable retail healthcare company.”

Delivering an Outstanding Associate and Customer Experience

President and COO Ken Martindale

President and COO Ken Martindale addresses company leaders at the Annual Store Operations Meeting.

As they took the stage throughout the three-day meeting, company leaders echoed the importance of the key opportunities discussed by Standley, especially the opportunity to deliver an outstanding associate and customer experience.

“I think we can all agree that delivering a terrific associate experience will translate into an outstanding customer experience,” said President and Chief Operating Officer Ken Martindale. “That has to be a central part of our culture. Let’s foster a more dynamic Rite Aid culture, where everyone feels valued and is eager to contribute their ideas and actions.”

 

Martindale urged field leaders to connect with their teams, emphasize associate development and make recognition a bigger part of their daily routines.

Bob Thompson, executive vice president of store operations, said that improvements in Associate Engagement Survey (AES) scores show that progress has been made. The challenge is to ensure that Rite Aid delivers an outstanding associate
experience throughout the entire chain.

“In some cases, we’re providing a tremendously positive experience,” Thompson said. “In other cases, we are not.”

To support its efforts in delivering a consistent associate experience, the company is increasing its training budget for a third consecutive year and working to develop an enhanced associate recognition strategy.

Embracing the Future of Pharmacy

The future of pharmacy was a key topic throughout the meeting as Rite Aid continues to evolve its pharmacy offering in a rapidly changing healthcare environment.

Congresswoman Cathy McMorris Rodgers, who holds the fourth highest leadership position in the U.S. House of Representatives, served as a special guest speaker. McMorris Rodgers has long been a champion for community pharmacy, and is leading the charge to pass legislation allowing more seniors to receive medication therapy management services through Medicare.

“Bottom line, I think what this legislation does is recognize the changing role that pharmacists and pharmacies are playing and how important that role is as far as being on the front-lines of healthcare delivery,” said McMorris Rodgers.

John Standley with Congresswoman Cathy McMorris Rodgers

Rite Aid Chairman and CEO John Standley talks onstage with Congresswoman Cathy McMorris Rodgers at the Annual Store Operations Meeting in Washington, D.C.

Meanwhile, Executive Vice President of Pharmacy Robert Thompson stressed the need for Rite Aid to help drive positive health outcomes through new programs such as Rite Aid Health Alliance and pharmacy services like immunizations, medication therapy management and medication compliance consultations.

“We believe that our business and the payment models of the future will be based on our ability to deliver improved healthcare outcomes,” said Thompson, adding that Rite Aid is developing new tools to support clinical service delivery and medication compliance efforts that will be rolled out in fiscal 2015.

Strengthening Rite Aid’s Wellness Offering

Rite Aid’s front-end assortments and merchandising will continue to reflect the broader health and wellness transformation that is taking place throughout the entire chain.

“Health and Beauty are the cornerstones of our front-end business and we’ll focus heavily on them in the coming year,” said Executive Vice President of Merchandising Tony Montini.

That will involve a continued emphasis on testing and learning to explore innovative merchandising strategies that resonate with today’s consumer, such as Rite Aid is doing at its Beauty Advisor test stores and stores piloting enhanced product education displays for OTC categories.

In addition, Montini highlighted additional innovations in the seasonal, general merchandise and consumables divisions designed to drive excitement, convenience and value.

To further support the company’s wellness transformation, Senior Vice President John Learish said the marketing team is focused on developing stronger relationships with Rite Aid’s best customers through personalized offers.

And while Rite Aid continues to ramp up efforts to engage customers through its enhanced website, mobile app and social media, it’s also focused on further enhancing its highly popular wellness+ loyalty program.

“We’re remaining true to our commitment to keep wellness+ fresh, proprietary, evolving, and improving — to continue to set the bar for our industry and beyond,” he said.