Rite Aid Enters Fiscal 2013 With Positive MomentumRite Aid enters its new fiscal year with positive momentum after growing same store sales and Adjusted EBITDA for five consecutive quarters and delivering on key sales initiatives such as wellness+, immunizations and Wellness store remodels.
In fiscal 2012, which ended March 3, same-store sales increased by 2.0 percent, the number of prescriptions filled grew by 0.9 percent and Adjusted EBITDA increased by nearly $84 million.
“Thanks to the hard work and dedication of our entire Rite Aid team, including our supplier partners, we achieved these outstanding results by more than doubling the number of flu shots we did last year; opening 274 wellness stores; significantly growing our Rite Aid brand program; and achieving continued success with our award-winning wellness+ customer loyalty program,” says President and CEO John Standley. “While there is still hard work ahead, I am pleased we are beginning our new fiscal year with positive momentum.”Rite Aid now looks to build on last year’s success by continuing to grow sales, maximizing returns on key capital investments and delivering a better, more personal customer experience. Rite Aid’s customer loyalty program – wellness+ – will continue to be a key initiative in the coming year. Earlier this year, the company introduced exciting new enhancements to the program, including the Load2Card online coupon management tool, the first of its kind in the industry.
Rite Aid also added new rewards for members who reach the silver level at 500 points. In addition to the 10 percent discount on qualified front-end purchases for one year, these members can also choose from several rewards options including a health screening, membership to a well-known national fitness center, a subscription to one of several general interest consumer and lifestyle magazines or a one-year GNC Gold Card membership.
Communicating these enhancements to customers will be critical in helping members enjoy the full value of wellness+, says Chief Operating Officer Ken Martindale. “As a company, we will also focus on encouraging more customers to ‘get to gold’ and earn the 20 percent discount every day in our stores,” Martindale says. “Gold wellness+ members are among our most valuable customers.”
In addition, the company will extend wellness+ to targeted groups that represent strong potential for growth, like the wellness+ for diabetes program that launched last September.
Another important focus will be continuing to grow the clinical pharmacy services business – including immunizations – in the face of declining reimbursement rates for prescription drugs. “We’re in a new era of patient care in which we must provide care beyond prescriptions,” says Executive Vice President of Pharmacy Robert Thompson. “That means we must continue to make strides in providing services such as Diabetes Care, Medication Therapy Management and Point of Care compliance consultations to more patients.”
The company is also focused on increasing the number of prescriptions filled by building on its highly successful immunization program. In addition, approximately $50 million is planned for purchasing prescription files.
Rite Aid plans to convert 500 additional stores to its new Wellness format.
In the coming months, Rite Aid will take its Wellness store initiative to the next level, with plans to complete 500 Wellness store remodels in fiscal 2013. Wellness stores feature a broad lineup of clinical pharmacy services, new wellness-related items and a more open store design to enhance the shopping experience.
These stores also feature Wellness Ambassadors, who act as a bridge from the front end to the pharmacy, where pharmacists are available to offer clinical advice and help customers select the right products for their specific needs.
“Our Wellness stores demonstrate – in a very personal way – our commitment to support the total health and wellbeing of our customers,” Martindale says. “They also give us a differentiated service model and provide a platform to showcase our personalized health and wellness products and services.”
The company will also leverage technology to drive customer engagement and deliver an enhanced shopping experience. Rite Aid recently unveiled its free mobile app that allows customers to browse the weekly circular, find the nearest Rite Aid using their smartphone’s GPS and refill prescriptions using their smartphone to scan their prescription bottle.
“We’re looking to be leaders in innovation when it comes to using new technology to reach new and existing customers while enhancing the in-store shopping experience,” says Senior Vice President of Marketing John Learish.
According to Standley, all of these priorities support the ultimate goal for fiscal 2013 – to continue growing sales.
“In putting it all together, our plan is built on continued sales growth from these critical sales initiatives we’ve identified,” Standley says. “While we focus on all of these initiatives, we must also continue to control costs so that our sales increases go straight to the bottom line. We have the structure in place, now we must maintain it and leverage it.”