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Rite Aid
American drugstore chain From Wikipedia, the free encyclopedia
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Rite Aid Corporation is an American drugstore chain based in Philadelphia, Pennsylvania.[1] It was founded in 1962 in Scranton, Pennsylvania, by Alex Grass under the name Thrift D Discount Center. Prior to its first bankruptcy in 2023, it was the third-largest drugstore chain in the United States. The company has more than 1,200 stores in 15 U.S. states, primarily on the East and West coasts.
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After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Rite Aid was publicly traded on the New York Stock Exchange under the symbol RAD, and ranked No. 148 in the Fortune 500 in 2022.[7] The company filed for Chapter 11 bankruptcy twice, in October 2023 and May 2025, due to a large debt load, thousands of lawsuits alleging involvement in the opioid crisis, and a failed restructuring.[8]
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History
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1962–1989
Alex Grass founded the Rite Aid chain in Scranton, Pennsylvania, in September 1962,[9] after marrying into Harrisburg Pennsylvania's Lehrman family in the early 1950s.[10] The first store was called Thrift D Discount Center.[11] The store expanded into five additional states in 1965 and went public as Rite Aid in 1968.[9] It moved to the New York Stock Exchange in 1970.[12][13]
Ten years after its first store opened, Rite Aid operated 267 locations in 10 states.[10] In June 1981, Teamsters Local 182 began a strike over paid vacation benefits. The union charged Rite Aid with being locked out. The strike went on for ten months when a National Labor Relations Board meeting was scheduled for July 19, 1982.[14] 1983 marked a sales milestone of $1 billion. A 420-store acquisition along the East Coast expanded Rite Aid's holdings beyond 2,000 locations.[citation needed]
In early October 1984, Rite Aid bought the Federal Plaza building in downtown Youngstown vacated by Woolworth's.[15] A large number of acquisitions brought the chain to the state of Michigan in late October 1984. These were of Grand Rapids, Michigan-based Muir Drug and Remes Drug, along with Lippert Pharmacy of Lowell and Herrlich Drug of Flint.[16][17][18][19] One year later, Rite Aid opened stores in Lansing, Michigan, through the acquisition of State Vitamin.[20] Rite Aid expanded further into Ohio in 1987 through the acquisition of Cleveland-based Gray Drug.[21] Among the companies acquired was Baltimore, Maryland's Read's Drug Store. In June 1988, the Ohio Division of Liquor Control processed the liquor licenses that were up for renewal after the Gray Drug acquisition to Rite Aid.[22] On April 10, 1989, Peoples Drug's 114-unit Lane Drug of Ohio was purchased by Rite Aid.[23][24][25]
1990–1999
In the 1990s, Rite Aid partnered with Carl Paladino's Ellicott Development Co. to expand the company's presence in upstate New York.[26] In June 1992, Maine's prescription drug program with Medco Containment Services came under fire by Rite Aid.[27] In May 1994, Rite Aid acquired LaVerdiere's as part of its expansion into Northern New England.[28] The company acquired twenty-four Hook's Drug Stores stores in late 1994, selling nine of those stores to Perry Drug Stores, a Michigan-based pharmacy chain. In December 1994, Rite Aid aunnounced that the company would acquire Perry, entering Metro Detroit for the first time and expanding its presence in Michigan even further.[29][30][31] In February 1995, Revco took over Rite Aid's store on Braddock Avenue in Pittsburgh.[32] In July 1995, Rite Aid expanded into Portland, Maine.[33] In October 1995, Rite Aid announced a new store opening in Hampden, Maine. Downeast Pharmacy was there servicing the roughly 6,000 residents at the time.[34][35] In November 1995, Rite Aid announced a deal to merge with Revco worth $1.8 billion in cash and stock,[36][37] however, the deal fell through as the Federal Trade Commission (FTC) was ready to file an antitrust lawsuit.[38][39] Revco's top executives were against the sale to Rite Aid, however, shareholders were for it.[40] CVS eventually bought Revco in 1997.[41]
In February 1996, the Federal Trade Commission (FTC) required three stores be divested after the LaVerdiere's purchase in 1994.[42] In June 1996, Rite Aid was in the second year of a three year expansion.[43] In September 1996, representatives from Rite Aid met with residents of Orono, Maine about their concerns with building a larger store.[44] In October 1996, the company acquired Thrifty PayLess, a 1,000-store West Coast chain. The acquisition of Thrifty PayLess included the Northwest-based Bi-Mart membership discount stores,[45][46][47] which was sold off in 1997.[48] In August 1996, Rite Aid planned to build new stores in Madawaska and Fort Kent while enlarging stoers in Houlton and Caribou in Aroostook County, Maine[49] In March 1997, Rite Aid announced plans to build a distribution center in Harford County, Maryland creating 850 jobs.[50] In July 1997, Rite Aid acquired Harco, Inc. and K&B, Inc. which brought the company into the Gulf Coast area in 1997.[51][52]
In early January 1998, Rite Aid delayed its plans for a new store in Bucksport, Maine.[53] In mid January 1998, Rite Aid announced about 200 employees would lose their jobs at its New Orleans distribution center. The company said it would expand its customer service center in Tuscaloosa, Alabama and create 100 jobs.[54] In mid April 1998, Rite Aid made an agreement with National City Bank to sublease and operate a branch inside its store in the 5100 block of Penn avenue in Pittsburgh.[55] In late April 1998, Rite Aid closed its store in downtown Youngstown at Amedia Plaza.[56] In May 1998, HIV/AIDS activists picketed some of the stores in the Philadelphia area because they felt the company failed to adequately stock HIV prescriptions leaving customers in a risky position where they had to wait two or three weeks.[57] In July 1998, Rite Aid rebuilt the store previously built by Woolworth's and later occupied by Harco, Inc. in Tuscaloosa, Alabama that had burned down in November 1997.[52] In November 1998, Rite Aid decided not to build a store in Bangor, Maine sitting rising costs.[58] In December 1998, Rite Aid announced it would not open a new store in Five Mile Fork, Virginia as previously planned.[59] In 1999, Rite Aid closed 600 poorly performing stores.[60] On October 19, 1999, Martin Grass, chairman and CEO, stepped down with losses mounting from debt that occurred from rapid expansion. The board of directors named Timothy J. Noonan, the company's then current president and COO, as CEO. The board created a new executive committee consisting of four outside directors.[61] A few days later, Rite Aid shareholders were angered by the stock dropping from $50 per share in January to $9.56 per share. Douglas Wilburne said, "Frankly, some people are looking for a little catharsis".[62] In late December 1999, the company's stock had risen to $30 per share, however, dropped again precipitously to $4.40 per share.[63] In December 1999, Bob Miller took over Rite Aid as chairman and CEO, helping to stabilize and save the company from bankruptcy. Miller had worked thirty years for Albertson's and then Kroger.Rite Aid hired Deloitte & Touche as its auditing firm after KPMG LLP resigned in November.[64][65] Mary Sammons of Fred Meyer was tapped by Leonard Green of Leonard Green & Partners to become president and chief operating officer.[64][66] David Jessick, a former executive at Thrifty Payless and Fred Meyer, became the Chief administrative officer (CAO). John T. Standley, from Fred Meyer, became the Chief financial officer (CFO).[67]
2000–2009
In April 2000, Rite Aid announced it had secured a $1 billion in credit from Citibank in addition with J.P. Morgan converting $200 million in bank debt to Rite Aid stock at a price of $5.50 each. Rite Aid also announced it would take PCS Health Systems, Inc., a pharmacy benefit manager (PBM), off the market.[68] In mid July 2000, Rite Aid sold PCS Health Systems to Advance Paradigm for $1 Billion.[60][69] In July 2001, Rite Aid agreed to improve its pharmacy complaint process by implementing a new program to respond to consumer complaints.[70] In April 2003, Pittsburgh City Council and the residents of the 5100 block of Pennsylvania avenue were angered by the store closure in the neighborhood.[55] In July 2004, Rite Aid expanded for the first time its near-collapse in 1999. The company also sold 1,260 Eckard stores to CVS.[60] Sammons became CEO in 2003.[71]
In March 2006, residents of Beaver, Pennsylvania, opposed the construction of a new Rite Aid store.[72] On August 23, 2006, The Wall Street Journal announced that Rite Aid would acquire the U.S. subsidiary of Quebec-based Jean Coutu Group, including 1,858 Eckerd Pharmacy and Brooks Pharmacy stores, for US$3.4 billion in cash and issuing stock, which would also give Jean Coutu a 32% equity stake in Rite Aid. The company's shareholders overwhelmingly approved the merger on January 18, 2007.[73][74][75] The Federal Trade Commission (FTC) approved the deal on June 2, 2007.[76] The deal closed on June 4 of that year.[73][74][75] Following an antitrust review, Rite Aid was required to divest 23 stores.[77][78] Rite Aid later announced that the two chains' stores would be rebranded, retiring the 109-year-old Eckerd banner; all stores were converted to Rite Aid by September 2007. The subsidiaries previously responsible for operating their respective chains remained active and began operating in name only.[79][80][81] The merger made Rite Aid the dominant drug store retailer in the Eastern United States and the third largest drug retailer nationwide; at its peak in 2008, Rite Aid had a total of 5,059 stores and employed 112,800 people.[82] The following fiscal quarter saw an increase in revenue but a sharp fall in net income as Rite Aid began the integration process, and The New York Times reported that Rite Aid saw record-breaking losses that year.[83] Rite Aid shares fell over 75% between September 2007 and September 2008, closing at a low of $0.98 on September 11, 2008, and subsequently dropping to $0.20 on March 6, 2009.[84] In February 2007, Rite Aid received permission from the Bryan city council to build a 11,000 square-foot pharmacy.[85]
Similar to what CVS experienced in the Chicago metropolitan area after its purchase of Albertsons drug store chains, the deal gave Rite Aid stores that were too close to each other. In many situations, especially in Pennsylvania, where both chains were dominant and had roots in the Commonwealth (Rite Aid originated in Scranton; Eckerd began in Erie, while Thrift Drug was popular in the Pittsburgh area), there were, in some cases, neighboring Rite Aid stores. However, in March 2008, some of these overlapping stores were closed. Most of these stores that closed were pre-existing Rite Aids from before the Eckerd deal, since Eckerd had built newer, more modern stores with drive-through pharmacies and larger space under ownership of both JCPenney and Jean Coutu Group; and the "moved to" sites were converted Eckerds. Employees at the closed stores were transferred to nearby locations.[86] As a former subsidiary of JCPenney, Eckerd accepted JCPenney's store credit card, a practice continued by Rite Aid to this day. Many stores acquired from Brooks Eckerd had previously been Rite Aid locations, as Rite Aid had sold some stores to JCPenney's Thrift Drug chain in the mid-1990s (shortly before JCPenney's acquisition of Eckerd), and had sold all of its Massachusetts stores to Brooks in 1995. After the Brooks Pharmacy and Eckerd Pharmacy mergers, Rite Aid became the third-largest retail drugstore chain in the country.[16] On January 4, 2008, Rite Aid announced the closure of all 28 of its stores in the Las Vegas Valley and the sale of patient prescription files from the market to Walgreens. The company said Las Vegas was a non-core market that had not been contributing to overall results and it had not opened a new store there since 1999. One Nevada store would remain open in Gardnerville, near the California border, where Rite Aid at the time had more than 600 stores.[87] It exited Nevada entirely as the Gardnerville store closed in December 2023.[88] On February 5, 2009, Rite Aid announced that it would terminate operations of seven Rite Aid stores in San Francisco, along with five stores in eastern Idaho through a sale to Walgreens.[89] Rite Aid formerly had a presence in the Columbus, Ohio, market but has since sold off its stores there to CVS.[citation needed] Founder Alex Grass died of cancer on August 27, 2009.[90]
2010–2019
In June 2010, John Standley was promoted from chief operating officer to chief executive officer, with former CEO Mary Sammons retaining her position as chairperson;[91] Ken Martindale, previously co-president of Pathmark, was named chief operating officer.[92] In April 2013, Jan Coutu sold 72.5 million of its shares in Rite Aid to the company.[93] In July 2013, Jean Coutu sold its remaining shares of Rite Aid.[94]
In 2015, Rite Aid purchased EnvisionRx, a pharmacy benefit manager, which owns subsidiary PBMs MedTrak, Connect Health Solutions, and Smith Premier Services.[95]
On October 27, 2015, Walgreens Boots Alliance announced that it expected to acquire Rite Aid for $9.4 billion, pending shareholder and regulatory approval.[96] The combined company would have been the largest pharmacy chain in the United States, reportedly controlling 46% of the market.[97] Walgreens planned to keep the Rite Aid name on existing stores if the deal went through, though the company's long-term plans for the Rite Aid name were unknown.[98]
Most analysts expected that the merger would close by the end of 2016; it was initially delayed by regulatory review.[99] It was announced on December 21, 2016, that to address antitrust concerns, Rite Aid would sell 865 stores to Fred's for $950 million,[100] though the Federal Trade Commission (FTC) was dissatisfied with the proposal, and requested the sale of 650 additional stores.[101] In January 2017, Rite Aid and Walgreens further delayed the merger's closing to July, and reduced the sale price to approximately $6.8 billion.[101] 1199SEIU United Healthcare Workers East, a labor union representing 6,000 Rite Aid employees, announced its opposition to the merger on January 31.[102]
On June 29, 2017, Walgreens announced the cancellation of the merger. Walgreens instead offered to purchase 2,186 Rite Aid stores, less than half of the chain, for $5.18 billion (plus a $325 million cancellation penalty), a deal which would have seen Rite Aid effectively exit the southeastern United States.[103][104][105] Further negotiations led to a fourth revised deal, in which Walgreens would purchase 1,932 Rite Aid locations for $4.38 billion, which was approved by the FTC on September 19.[106] The revised sale was completed on March 27, 2018, leaving Rite Aid with roughly 2,600 remaining stores.[107][108] Three distribution centers and related inventory were transferred starting September 1, 2018, and the majority of stores were then rebranded as Walgreens. 600 stores were closed, most of which were Rite Aid stores within a mile of an existing Walgreens.[109][110]
On February 20, 2018, Albertsons announced plans to acquire the remainder of Rite Aid, in a merger of equals, subject to shareholder and regulatory approval.[111][112] On August 8, 2018, Rite Aid announced that the plan had failed to please shareholders and the proposed acquisition would be cancelled.[113]
2020–2025
In October 2020, Rite Aid announced the acquisition of the privately held Bartell Drugs, a 67-location Seattle-area chain, for $95 million.[114][115] Some customers criticized the acquisition with reports of heavy staff turnover and computer system glitches.[116]
In 2022, Rite Aid relocated its headquarters from Camp Hill, Pennsylvania, to Philadelphia.[117][118] As of fiscal year 2022, Pennsylvania, with 494 stores, is home to the largest number of Rite Aid locations, followed by California and New York, with 487 and 281 respectively.[119] On October 4, 2023, Rite Aid was told that it could be delisted from the New York Stock Exchange.[120] On October 16, 2025, the process of delisting Rite Aid from the New York Stock Exchange commenced.[121]
First bankruptcy
On August 25, 2023, Rite Aid announced that it was preparing to file for Chapter 11 bankruptcy protection within the coming weeks, in an effort to settle federal and state lawsuits over the company's role in the opioid crisis. Plans called for the potential closure of up to 500 underperforming locations nationwide.[122][123] In October 2023, CreditRiskMonitor reported that Rite Aid was nearing a potential bankruptcy filing.[124]
On October 15, 2023, amid several opioid lawsuits and legal battles, Rite Aid and some of its affiliated debtors filed for Chapter 11 bankruptcy protection in the United States District Court for the District of New Jersey. The next day, the company was delisted from the New York Stock Exchange and commenced trading over the counter.[125] The company said in a statement it had secured $3.5 billion in financing and debt reduction agreements from lenders to keep the company afloat through its bankruptcy. Around 500 stores shutter over the remainder of 2023.[126] On October 16, Rite Aid announced that 92 additional stores would either be shuttered or sold to other pharmacies.[127] On October 18, Rite Aid warned investors that it might not be able to survive its bankruptcy filing and might have to permanently shutter or sell all of its remaining stores over the next twelve months.[128] That day, the company announced the closure of 154 stores, and its stock closed at an all-time low of $0.13 per share.[129][130]
As shown in the company's bankruptcy filings, its 2007 acquisitions, The Jean Coutu Group (PJC) USA Inc. (Jean Coutu's former U.S. subsidiary) and Eckerd Corporation, remain active in-name-only subsidiaries of Rite Aid, despite the conversions of Brooks and Eckerd to Rite Aid and Coutu's sale of its remaining shares in Rite Aid 10 years prior.[131]
On October 19, competitor Walgreens agreed to pay $192.5 million in an effort to settle a lawsuit from Rite Aid investors accusing them that their executives misled them about their bid to acquire Rite Aid back in 2017.[132]
On November 16, Rite Aid sued the United States Department of Justice in an effort to block an opioid lawsuit that accused the company of ignoring warnings and falsely filed thousands of prescriptions for addictive opioid medications.[133] On November 21, a bankruptcy judge ordered Rite Aid to fully reorganize its operations by March 1, 2024. Rite Aid warned that if it failed to fully reorganize by the deadline, the company could face liquidation.[134] On November 29, Rite Aid announced the closure of 30 additional stores by December 2023.[135] On December 5, Rite Aid announced that 79 stores would be put up for sale.[136]
On December 19, Rite Aid agreed to a bankruptcy mediation with its opioid victims and creditors that would be supervised by the court. Rite Aid received a loan approval that would allow for the company to receive approximately $200 million.[137] That same day, Rite Aid announced that they had settled with the Federal Trade Commission over their AI-powered facial recognition technology, agreeing to a five-year ban to forbid using facial recognition technology in all of their stores after being accused of misusing the system for falsely identifying shoppers of race and color. The system was originally supposed to be used to identify shoppers likely involved in criminal activity.[138] In addition, Rite Aid announced the closure of 19 additional stores nationwide.[139]
On December 21, Rite Aid cancelled an auction for its Elixir division after no other higher bids came in, selling the insurance-related company to MedImpact Healthcare Systems for approximately $575 million.[140]
In June 2024, the Detroit Free Press reported that Rite Aid was preparing to close all remaining stores in Michigan.[141] Soon thereafter, the chain filed a WARN notice disclosing plans to close its Waterford, Michigan, distribution center in August 2024, laying off nearly 200 employees.[142] By August, the company had closed or announced the closure of 38% of its stores, amounting to 778 locations,[143] including all stores in Michigan and all but four in Ohio.[144][145]
In September 2024, Rite Aid announced it was exiting bankruptcy, becoming a privately held company. Matt Schroeder, the former chief financial officer, was elevated to the CEO role.[13][146][147]
Second bankruptcy and closure
Following a failed restructuring, on April 4, 2025, it was reported that Rite Aid was preparing to file for Chapter 11 bankruptcy for a second time, while looking into other options such as a possible sale of some or all of its assets.[148] On April 22, Rite Aid announced that it would be preparing to sell itself in multiple pieces as it had run low on cash. It was announced that the vast majority of stores were expected to be sold to the highest-paying bidders, whereas stores not sold would shut down.[149]
On May 5, 2025, Rite Aid filed for Chapter 11 bankruptcy for the second time in two years, listing assets and liabilities between $1 billion and $10 billion. Rite Aid stated that it would sell all of its assets and close all remaining pharmacies as part of the procedure, as it worked to overcome financial challenges such as debt, increased competition, and inflation. The company planned to eliminate all jobs after its failure to secure financing, as well as close or sell all of its remaining 1,200 locations.[150] Rite Aid claimed that it was unable to keep store shelves stocked at many of its locations due to lenders walking away from the company.[151] Later that month, it was reported that Rite Aid would close 115 stores in 10 states within weeks and that the last day to place bids for its pharmaceutical assets would be May 13, with auctions being held the next day. The last day to place bids for the company's remaining assets was June 13, with auctions being held on June 20.[152] On May 13, Rite Aid announced that the last day to use gift cards, coupons, and rewards, as well as the last day for returns and exchanges, would be June 5.[153]
On May 15, Rite Aid sold pharmacy prescriptions at over 1,000 of its locations to many retailers, such as CVS Pharmacy, Walgreens, Albertsons, and Kroger. CVS Pharmacy was identified as the largest bidder, buying prescription files from 600 locations in 15 states, as well as purchasing 64 Rite Aid stores in the states of Idaho, Oregon, and Washington.[154] The sale was approved on May 21.[155]
On May 16, Rite Aid announced the closure of 27 more locations.[156] By May 27, 360 locations were slated to close. Rite Aid stated the company was unable to find buyers for prescriptions at these locations.[157] On May 29, Giant Eagle acquired pharmacy prescription files from 78 Rite Aid locations in Pennsylvania and Ohio.[158] By June 6, more than 800 locations had been closed since October 2023.[159] On June 9, another 230 stores were reported to be closing.[160]
On June 27, 2025, Rite Aid received court approval to sell its Thrifty PayLess and Thrifty Ice Cream subsidiaries to the privately held company Hilrod Holdings for $19.2 million. Hilrod Holdings is managed by Hilton Schlosberg and Rodney Sacks, top executives for Monster Beverage.[161] On July 6, 2025, it was reported that 114 more stores would be closing, bringing the total count of closures over 1,000. As of July 2025, 1,184 Rite Aid stores that were open before the company's second bankruptcy have either closed or are conducting liquidation sales, leaving only 56 stores still operating; the fate of those stores has not been announced yet.[162]
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Finances
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For the second quarter of 2022, Rite Aid reported basic[clarification needed] and diluted earnings of -1.86 per share. This is significantly down from prior quarters' report of -0.24 per share.[163]
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Legal problems
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Federal Trade Commission (FTC)
In late February 1998, the Federal Trade Commission (FTC) fined Rite Aid $900,000 for failure to divest two drugstores in Maine and one in New Hampshire. The FTC had ordered the company to sell those stores in 1994 to resolve antitrust issues when the company acquired LaVerdiere's.[165]
Sale of expired products
In June 1999, Rite Aid reported that it stocked more than 200 outdated condoms, baby formula, and infant medications from fifty California stores. In mid June 1999, Attorney General for the state of West Virginia Darrell V. McGraw, Jr. prepared to file suit against Rite Aid for selling outdated baby formula, condoms, and other items in West Virginia's 132 stores. Rite Aid agreed to remove the outdated products after the WCHS-TV report for outdated items in Rite Aid and CVS stores.[166]
Fraud
In October 2018, a former Rite Aid vice president of advertising and two co-owners of Nuvision Graphics, pleaded guilty in a $5.7 million kick-back scheme defrauding Rite Aid.[167][168][169]
In June 2002, the SEC announced criminal charges against top Rite Aid executives for accounting fraud.[170] CEO Martin Grass and Franklin C. Brown had increased its losses over several years by $1.6 Billion. Rite Aid had reported originally $541 million in profit for fiscal years 1998 and 1999. In the first quarter of 2000, the company reported $670.5 Million in losses. In the indictment, prosecutors asserted that Grass and Brown agreed to pay more than $11 Million to settle a lawsuit filed by a former executive to silence him.[171] Several executives served subsequent jail time, including Grass. Grass, who is the son of the founder, ultimately served six years in prison.[172][173]
In January 2003, Rite Aid agreed with its insurers to pay $10.75 million settlement to the retirement fund for employees after a lawsuit alleging that the company breached its responsibility by allowing employees to buy company stock while Grass and Brown were falsifying the company's ledgers.[174] On June 28, 2003, the federal judge presiding over Brown's case gave him until July 14 to change his plea of innocent or go to trial on the 35 count indictment. Eric S. Sorkin pleaded guilty on one count of obstruction of justice. Sorkin had misled and provided false information to the government. Sorkin faced a minimum of five years in prison and a fine of $250,000.[175]
Litigation
Rite Aid v. Wilczynski
In May 1989, Rite Aid filed a defamation lawsuit against Melvin Wilczynski. Wilczynski, a state pharmacy board member, who prosecutors claimed was the target of a bribe by president Martin Grass. The suit claimed that Wilczynski misled state officials that Grass was bribing him. The attorneys for Rite Aid intended to have questions for Wilczynski in a deposition. In June 1989, United States district judge Alvin Krenzler of the United States District Court for the Northern District of Ohio blocked the deposition as well as Rite Aid's request that Wilczynski produce documents and his admissions to the acts he had done on behalf of Rite Aid pending the outcome of a criminal bribery charge against Grass.[176]
Death of Ronald S. Demorest
On November 8, 1995, Ronald S. Demorest, the manager of the Homewood, Pennsylvania location, was kidnapped and murdered by Eric Taylor and Ernest Jones. In March 1996, Demorest's parents filed a wrongful death suit against Rite Aid and PNC Bank over his death by failing to provide adequate security.[177] Judge Bernard Scherer of Westmoreland County removed PNC Bank from the suit in November 1996. In October 1997, Judge Scherer dropped Rite Aid in the suit stating that the company was exempt from liability under worker's compensation rules.[178]
William Ronci v. Rite Aid Corp.
In 1999, Bill Ronci, owner of Family Discount Drugs and Trendi's Emporium, filed a lawsuit against Rite Aid. Rite Aid proposed to build a smaller dock in a different location so customers could use the drive-thru pharmacy. During construction of the Rite Aid store, the roof leaked into Trendi's Emporium damaging clothes and other merchandise.[179] After three years, Ronci was still suing Rite Aid.[180]
Rite Aid shareholders v. Rite Aid Corp.
In November 2000, Rite Aid agreed to a settlement with its shareholders for $45 million in a class action lawsuit pending United States district courts in Philadelphia and Delaware in exchange for pursuing litigation against Grass, Noonan, Bergonzi, and outside auditor KPMG. It was funded by liability insurance and $155 million in stock.[181]
Allegations of mishandling of drugs
In September 2002, Keith Saylor, a pharmacist in the Barbourville, Kentucky store alleged mishandling of drugs being shipped to his store. Some medications would arrive frozen or with frost on them. In the summer, patients brought back new inhalers that were almost empty which Saylor had surmised that the inhalers had been left in overheated trucks. Saylor would start to record his conversations with the truck drivers. Saylor went to management about the problems with the drugs. Saylor filed a lawsuit to protect his job after recording meetings with management. Rite Aid ended his employment stating that refusing an order and taping conversations were grounds for termination.[182]
Allegations of false prescription claims
On July 25, 2004, Rite Aid agreed to pay $7 million to settle allegations that the company had submitted false prescription claims to United States government health insurance programs.[183]
On July 14, 2022, Rite Aid inked a $10.5 million settlement with counties in Georgia, North Carolina, and Ohio, which allowed the company to sit out the next wave of trials stemming from the opioid epidemic in the U.S., which were slated to begin against national pharmacy chains by 2023.[184]
On March 14, 2023, the United States government sued Rite Aid for missing "red flags" as it illegally filled hundreds of thousands of prescriptions for controlled substances, including opioids from May 2014 to June 2019.[185]
Hall v. Rite Aid Corporation
In the employee seating lawsuit (Hall v. Rite Aid Corporation, San Diego County Superior Court), the parties reached a class action settlement for $18 million plus institution of a two-year pilot seating program for front-end checkstands. On September 14, 2018, the Court granted preliminary approval of the settlement. On November 16, 2018, the court granted final approval of the settlement.[186]
In re National Prescription Opiate Litigation
As reported by Rite Aid, the company is a defendant in the consolidated multidistrict litigation proceeding, In re National Prescription Opiate Litigation, pending in the U.S. District Court for the Northern District of Ohio. Various plaintiffs (such as counties, cities, hospitals, and third-party payors) allege claims concerning the impacts of widespread opioid abuse against defendants along the pharmaceutical supply chain, including manufacturers, wholesale distributors, and retail pharmacy chains.[186]
Byron Stafford v. Rite Aid Corp. and Robert Josten v. Rite Aid Corp.
Rite Aid reported in January 2019 that the company was involved in two consumer class action lawsuits in the United States District Court for the Southern District of California, alleging that it overcharged customers' insurance companies for prescription drug purchases, resulting in overpayment of co-pays.[186]
Surveillance practices
In July 2020, the Reuters news agency reported that during the 2010s Rite Aid had deployed facial recognition video surveillance systems and components from FaceFirst, DeepCam LLC, and other vendors at some retail locations in the United States.[187] Cathy Langley, Rite Aid's vice president of asset protection, used the phrase "feature matching" to refer to the systems, a technical term related to the process of image feature extraction in the field of artificial intelligence for video surveillance, and said that usage of the systems resulted in less violence and organized crime in the company's stores, while former vice president of asset protection Bob Oberosler emphasized improved safety for staff and a reduced need for the involvement of law enforcement organizations.[187] In a 2020 statement to Reuters in response to the reporting, Rite Aid said that it had ceased using the facial recognition software and switched off the cameras.[187]
According to director Read Hayes of the National Retail Federation Loss Prevention Research Council, which in 2018 called facial recognition technology "a promising new tool" worth evaluating, Rite Aid's surveillance program was either the largest or one of the largest programs in retail.[187] The Home Depot, Menards, Walmart, and 7-Eleven were among other US retailers also engaged in pilot programs or deployments of facial recognition technology at that time.[187]
Of the stores examined by Reuters, those in communities where people of color made up the largest racial or ethnic group were three times as likely to have the technology installed,[187] raising concerns related to the substantial history of racial segregation and racial profiling in the United States. Rite Aid said that the selection of locations was "data-driven", based on the theft histories of individual stores, local and national crime data, and site infrastructure.[187]
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Customer loyalty and rewards programs
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The Wellness+ card was Rite Aid's free shopping rewards card. Launched nationwide on April 18, 2010, it became a part of the American Express-backed Plenti rewards program in May 2015, in which customers would earn Plenti points with each purchase. Rite Aid returned the Wellness+ program on January 1, 2018, with Wellness+ BonusCash redeemable at Rite Aid stores, ahead of Plenti's shutdown and bankruptcy on July 10, 2018.
Rite Aid's rewards programs were ceased and closed on June 5, 2025, as part of its closure and second and final bankruptcy.[153]
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Partnerships
General Nutrition Centers (GNC) and Rite Aid formed a partnership in January 1999, adding GNC stores-within-stores at roughly 1,500 Rite Aid pharmacies.[188][189] A partnership with Drugstore.com in June 1999 allowed customers of Rite Aid to place medical prescription orders online for same-day, in-store pickup.
Amazon announced in June 2019 that Amazon shoppers would be able to pick up their purchases at designated counters inside more than 100 Rite Aid stores across the US. The new service is called Counter[190] and launched in the US after being used in the UK with the Next clothing chain and in Italy with Giunti Al Punto Librerie, Fermopoint and SisalPay stores.[191]
In May 2022, Rite Aid partnered with Homeward, a rural home care startup. Under this partnership, Medicare-eligible customers have been directed to Homeward's clinical services and have access to Homeward mobile care units.[192]
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References
External links
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