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Supplier Advisory Board Meeting Update

On April 7, Rite Aid associates and suppliers gathered in Las Vegas, Nev. for the bi-annual Supplier Advisory Board (SAB) meeting. The meeting’s theme, “Making the Rite Moves,” continued the theme of Rite Aid’s Store Operations Conference held in Baltimore, Md. one month earlier. The supplier advisory board embodies this theme by creating a forum through which Rite Aid and its suppliers come together as partners to make the right moves and work towards the common objective of winning in the marketplace.

Highlights of the day included:

Tony Montini, Rite Aid’s new Senior Vice President of Category Management, gave a high-level overview of each topic on the agenda before introducing President and COO John Standley, who provided an update on the company’s Fiscal 2010 accomplishments:

  1. Completed the refinancing of $2.5 billion in near term maturities
  2. Developed and tested the wellness+ customer loyalty program
  3. Launched segmentation initiatives, including different operating models for different types of stores
  4. Grew script count in comparable stores by 0.81 percent
  5. Reduced debt by $189 million
  6. Improved liquidity to about $1.2 billion


Standley also outlined the company’s Fiscal 2011 Strategic Plan that is supported by four pillars:

  1. The “Rite” People – Being the Employer of Choice
  2. Strategic Distinctiveness – Growing Sales and Market Share
  3. Efficiency – Leveraging size/scale/density
  4. Improve Capital Structure – Maintaining liquidity


Standley said these strategic pillars would help the company to grow front end sales and script count, stabilize gross profit and efficiently manage Selling, General and Administrative (SG&A) expenses.

Senior Executive Vice President of Merchandising, Marketing, and Logistics Ken Martindale explained how Rite Aid’s segmentation strategy is leading to improved results. He also discussed the need to improve in-stock rates, especially on advertised merchandise. Martindale challenged the Advisory Board to improve their collaboration with category managers on ad projections, take a holistic view of mutual supply chains to reduce barriers and review and update their annual collaborative business plans.

Senior Vice President of Marketing John Learish shared details about the wellness+ customer loyalty program and explained how the program is giving Rite Aid data it can act on. Ted Williams, Vice President of Category Management Support and Services, gave a timeline as to when Rite Aid would provide loyalty data through its supplier portal.

The meeting then changed gears when guest speakers Michael Kenny and Julie “Jewels” Hudson, both former U.S. fighter pilots who are now part of the Afterburner consulting team, led an energetic discussion on how business and flying an F-18 Jet Fighter have tremendous similarities. Kenny and Hudson provided a step-by-step approach to ensure success: Plan, Brief, Execute, Debrief = Win!

Williams then reported on updated bylaws approved by SAB’s Leadership Council in December that will keep the advisory board fresh and focused:

  1. Leadership Council membership will increase from four to six members, with the two new members to be announced at the October meeting
  2. Terms will increase from two years to three, with no extensions but the option to re-apply after one year away from the Leadership Council
  3. Leadership Council members will now serve as mentors to the project committees


Williams reviewed ideas for six potential Advisory Board project committees in Fiscal 2011: order forecasting and allocation; beauty reinvention; DSD system and process optimization; loyalty; segmentation and Supply Chain optimization. Members for each project committee had been selected prior to the meeting.

In Las Vegas, each project committee held interactive breakout sessions to help members understand key metrics the company would like to improve and to set realistic and achievable goals. In the coming weeks, Rite Aid will ask each committee to submit their project plan before selecting which projects to proceed with in Fiscal 2011.

To conclude the meeting, Montini challenged advisory board members to increase participation, stay involved and execute solutions for the Fiscal 2011 projects more quickly because, as he says, “speed wins.”

Rite Aid’s next Supplier Advisory Board meeting will be held October 14, 2010 in Harrisburg, Pa.