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Rite Aid is becoming a haunting sight across America.
Once a staple in the drugstore business, the chain has filed for bankruptcy, slashing its footprint by more than 40% in just a few years. As stores close and shelves go bare, consumers are left searching for prescriptions and basic goods at competitors like Walmart and Amazon, leaving Rite Aid’s future hanging by a thread.
In 2023, Rite Aid filed for bankruptcy and closed 470 locations, making it the retailer in the drugstore sector to shutter the most stores that year, according Coresight’s store closure data. At the time, Rite Aid had 2,324 locations. Just a year later, it’s footprint shrank to 1,818 stores, with an additional 188 closures planned for 2025.
As the Philadelphia-based company navigates its way out of financial distress, its shrinking footprint paints a grim picture of the wider challenges facing the pharmacy sector.
“The decision to close a store is not one we take lightly,” spokesperson Alicja Wojczyk said in statement on behalf of Rite Aid to Quartz. “The company regularly assesses its retail footprint to ensure we are operating efficiently while meeting the needs of our customers, communities, associates and overall business.”
Today, Rite Aid is a shadow of its former self. As of early December, about 100 Rite Aid locations remain open in the Philadelphia region, but many of these stores are operating as “zombies” – still open, but increasingly hollowed out. Shoppers often find shelves barren, with some sections understocked or lacking basic products. In many stores, basic items are locked behind glass cases, creating frustration and prompting customers to seek alternatives, often turning to Amazon for online shopping.
This growing vacancy isn’t confined to Philadelphia, and for some retailers, it’s optimal timing to swoop in and clean house. Experts believe these closed stores could provide an opportunity for other retailers. Steven H. Gartner, executive vice president of real estate company CBRE (CBRE-1.17%), told the Philadelphia Inquirer that many of the vacant locations are in good condition and have already been repurposed by grocers like Aldi and Dollar General (DG+0.37%).
But the question remains, why is Rite Aid struggling so much? A combination of fierce competition and shifting consumer habits has made it harder for the chain to maintain its relevance. Retail giants like Walmart (WMT-1.28%) and Amazon (AMZN-1.71%) have increasingly captured a share of the pharmacy market, offering consumers more convenience and lower prices. These companies can leverage their vast online reach, with Amazon even moving into prescription services and Walmart throwing its hat into the ring, too.
Rite Aid’s financial struggles are compounded by more than just shrinking sales and stiff competition. The company’s massive debt load and ongoing legal battles have further pushed it to the brink. To stabilize during its bankruptcy, Rite Aid secured court approval for a $200 million loan, but also agreed to enter settlement discussions with creditors and individuals suing it over its role in the U.S. opioid crisis.
Meanwhile, Walgreens is also having a tough time. The pharmacy giant said in October it would close roughly 1,200 U.S. stores over the next three years, including 500 locations in fiscal 2025. In June, it said about 8,600 locations would be shuttered over the next few years.
Like Rite Aid, the consequences are gruesome for Walgreens (WBA-0.67%) customers who depend on the pharmacies for prescriptions, especially in areas where options are limited. For those customers, the lack of local, reliable pharmacies makes accessing vital medications more difficult, forcing them to travel farther or deal with the inconvenience of limited stock and delayed orders, Moody’s (MCO-1.15%) vice president of corporate finance Chedly Louis previously told Quartz.
Rite Aid’s troubles are not unique. The chain, like the whole pharmacy sector, is grappling with rising costs, staffing shortages, and an increase in competition. As the chain continues its efforts to recover, it remains to be seen whether it can reinvent itself and ultimately survive.
For now, these “zombie” stores – empty and decaying – may mark the end of an era for Rite Aid.
