Pharma

Rite Aid is testing out small stores to combat pharmacy deserts

The chain has opened four small-format stores so far.
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Illustration: Dianna “Mick” McDougall, Photos: Getty Images

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Rite Aid executives have started experimenting with a new strategy in their crusade to turn the company into a “modern pharmacy” and compete with Walgreens and CVS: smaller stores.

The retail pharmacy chain began a small-format store program in November 2022, with executives saying the goal is to improve access to pharmacy services in pharmacy deserts, or areas that lack convenient access to a pharmacy.

“With these new smaller-format pharmacy locations, we are bringing critical pharmacy services to underserved communities,” Andre Persaud, the then-chief retail officer at Rite Aid, said in a November 2022 statement.

Rite Aid spokesperson Catherine Carter told Healthcare Brew that the small-format store program is part of the company’s growth strategy to “expand into untapped markets and customers.” Heyward Donigan, who was Rite Aid’s CEO until the start of this year, said in a December 2022 earnings call that the stores would be a “core driver” of growth for Rite Aid.

The company has plenty of pharmacy deserts to choose from—more than 40% of all US counties are considered pharmacy deserts, meaning residents have to drive more than 15 minutes to get to a pharmacy, according to research from drug marketplace GoodRx.

Lacking access to a pharmacy makes people more likely to stop taking their medications, and that lack of adherence costs the US healthcare system a lot of money. In 2016, ineffective medication therapy, including nonadherence, cost the US about $528.4 billion, or 16% of the total US healthcare spend, a study found.

So far, Rite Aid has opened four small-format stores in rural Virginia, with the latest opening at the end of April in a town called Grottoes, which has fewer than 3,000 residents. Carter told Healthcare Brew the stores are “strategically placed in areas without nearby access” to pharmacy services.

“We sought to identify areas where there weren’t pharmacies within a certain mile distance, and where there was potential for customer growth,” Carter said.

Instead of the average 11,000–⁠15,000-square-foot Rite Aid store, the small-format stores are about 3,000 square feet and still sell health and wellness products. The stores are staffed by a single pharmacist (called a community pharmacy leader), one pharmacy tech, and one part-time pharmacy tech who floats between stores.

Ryan Minnich, community pharmacy leader at the flagship small-format store in Craigsville, Virginia, told Healthcare Brew that before his store opened, the nearest pharmacy was more than 30 minutes away.

“A lot of people here unfortunately live below the poverty line […] so a lot of people don’t have cars,” he said. “Now they have a healthcare provider right in their backyard.”

Carter said the small-format store program is an “important step in our work as a modern pharmacy, and we’re committed to improving access to these critical health services and fostering relationships with a local pharmacist.”

Navigate the healthcare industry

Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.