Back in the USSR at Rite Aid…
It’s been a tough week, so I’m in the mood to air my grievances as a grouchy consumer. What is the retail outlet of my discontent? Rite Aid (RAD), which filed its third quarter 10-Q Wednesday, detailing continued losses.
Within a few blocks of my home in New York City, I can purchase croissants rivaling those found in Paris, $150 doggie sweaters in a variety of colors, and all the truffles I can eat. However, finding basic cleaning supplies or one’s preferred brand of toilet paper can sometimes be a challenge. The most convenient place to pick up such items has been a nearby Eckerd drugstore, always clean and well-stocked. So back in 2006, when I heard Rite Aid was buying the Brooks Eckerd chain from the Jean Coutu Group, my heart sank. There were already two Rite Aid stores within minutes of my home, both suffering chronically from Soviet Economy Syndrome, in which various household staples vanish from the shelves for days on end.
According to Rite Aid’s Q, it’s been busy working on a post-acquisition process that involves “replacement of the Brooks Eckerd store systems with our store systems.” Looks like that’s moving along well, at least in my neck of the woods; earlier this week, when I ran out to my local Eckerd-turned-Rite Aid, I found it fully Sovietized. Two lonely packages of toilet paper sat on otherwise bare shelves in the paper goods section. And was there a single bottle of dishwashing liquid in the joint? Nyet. (The firm says it will make about $300M in capital expenditures during fiscal 2008 on further “integration” of the Eckerd business.)
In the third quarter earnings press release, Rite Aid Chairman/CEO/President Mary Sammons blamed the company’s disappointing results in part on “a more cautious consumer.” Maybe, but most people are still buying toilet paper, when they can find it.