When even drug stores in the US are suffering, you know things are bad. America, home of marketed pharmaceuticals, might be saying goodbye to drug store Rite Aid as it files for bankruptcy for the second time in as many years.
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The latest filing for bankruptcy comes only seven months after Rite Aid pulled out of Chapter 11 bankruptcy. They had already been on the rocks, and their lack of money, stock, and footfall has put them right back there.
Chapter 11 bankruptcy is essentially a cry for help. A business will use it when it's one step away from complete collapse. It allowed the drug store to go into a kind of administration. Stores stay open, staff keep jobs, and shareholders still get a payout. However, it meant Rite Aid was looking for a buyer and a serious change of direction.
After the initial bankruptcy Rite Aid filed for in 2023, the drug store chain closed many of its storefronts. Their numbers dropped from around 2,000 stores that employed about 47,000 people pre-bankruptcy. Now, they have only 1,245 drug stores open around the country. This is a drastic drop from their peak of 5,059 Rite Aid drug stores in 2008.
This Could Spell The End For The Third-Largest Drug Store In The US
It's alarming to see that a drug store, which is a part of the fourth biggest industry in the US worth $1.416.0B yearly, file for bankruptcy. Rite Aid is no small fish in the line up either, coming third behind CVS and Walgreens. However, those giants hold a lion's share.
For Retail expert Neil Saunders, the fall of Rite Aid into bankruptcy was inevitable. He said that "The second bankruptcy of Rite Aid comes as no real surprise. The first bankruptcy did little to resolve the chain's issues... It is currently in the position of not being able to secure enough inventory to keep shelves stocked. This, in turn, deters customers, which reduces sales and squeezes cash flow."
Like many of the other companies in the US filing for bankruptcy, drug store Rite Aid is struggling to compete with huge outlets like Walmart and Amazon. Not so long ago, the latter opened up its own online pharmacy. They sell many of the items in Rite Aid, delivered right to people's doors, and at a competitive price.
