Pharmacy chain Rite Aid files for bankruptcy again within approximately 2 years.
Hittin' the Wall: Indie Pharmacies Struggle, Closures Soar Nationwide
indepenDANT pharmacies have been HANGIN' on by a thread, with around one store shuttin' down ev-e-ry day as per the National Community Pharmacists Association. This grim trend ain't slowin' down anytime soon either.
Rite Aid, one o' the biggest players in the game, filed for bankruptcy not once, but twice in less than two years. The drug store conglom made the announcement in a press release on Monday, sayin' they're "pursuin' a strategic and value-maximizin' sale process for substantially all of its assets."
"For more than 60 years, we've been a proud provider of pharmacy services and products to our loyal customers," Matt Schroeder, Chief Executive Officer of Rite Aid, said in a statement.
Rite Aid's first restructurin' brought down the U.S. pharmacy chain's debt, but it didn't tackle the long-term business problems they were dealin' with – inflationary pressures and increased competition from giants like Walgreens, CVS, Walmart, and Amazon.
RITE AID STORES SHUTTING DOWN – OVER TWO DOZEN STORES TO CLOSE WITH BANKRUPTCY PROCEEDINGS
A man browses inside a Rite Aid store under a security camera in New York City, New York, U.S., 2020. (Lucas Jackson / Reuters)
"While we've continued to face financial challenges," intensified by the rapidly changin' retail and healthcare landscapes, "we're encouraged by meaningful interest from a number of potential national and regional strategic acquirers," Schroeder added.
Rite Aid still had $2.5 billion in debt when it emerged from bankruptcy as a private company owned by its lenders in 2024.
RITE AID FILES FOR BANKRUPTCY – COURT PROTECTION FILING IN 2023
The drugstore chain found itself in bankruptcy again in 2025, with a smaller retail footprint. Operatin' around 2,000 pharmacies in 2023, Rite Aid now has only 1,240 stores across the United States, with recent closures significantly reducin' their presence in markets like Ohio and Michigan.
Customers can still access pharmacy services and products in stores and online, including prescriptions and immunizations, Rite Aid said. Employees "will continue to receive pay and benefits" while transferrin' customer prescriptions to other pharmacies, the company added.
Enrichment Data: Independent pharmacies face numerous complex challenges, such as:
- Pharmacy Benefit Managers (PBMs): PBMs' rebate structures can lead to low margins for pharmacies, particularly for independents. PBMs negotiate prices and rebates with drug manufacturers, which can result in pharmacies being paid less than their acquisition costs.
- Competition and Market Shifts: Large chain drugstores have economies of scale, enabling them to offer lower prices and more services compared to independents. However, the closure of chain stores can sometimes benefit independents in small markets. The shift towards new treatments presents challenges due to small profit margins.
- Inflationary Pressures: Inflation raises operational costs, including payroll, inventory, and rent, worsening the financial situation of both independents and large chains.
- Regulatory and Market Changes: The growing demand for GLP-1 treatments, along with subsequent shortages and pricing pressures, can exacerbate pharmacies' financial woes. There are ongoing efforts to reform PBMs through legislation aimed at helpin' indie pharmacies.
- The National Community Pharmacists Association reported that approximately one pharmacy closes each day, indicating a persistent struggle among independent pharmacies.
- Rite Aid, a significant player in the industry, announced bankruptcy for the second time in less than two years, seeking a strategic sale of its assets to maximize value.
- Matt Schroeder, CEO of Rite Aid, stated that the company, which has been serving customers for more than 60 years, is facing financial challenges intensified by the evolving retail and healthcare landscapes.
- In a press release, Schroeder mentioned a welcome interest from potential acquirers as Rite Aid stores prepare for closure, with over two dozen stores set to close during bankruptcy proceedings.
- Walgreens, CVS, Walmart, and Amazon pose increased competition for Rite Aid, contributing to their long-term business problems and the inflationary pressures they've been experiencing.
- In a bid to ensure continuity, Rite Aid customers can still access pharmacy services and products in stores and online, while employees will receive pay and benefits during the transfer of customer prescriptions to other pharmacies.
