Grocery Chain Albertsons to Buy Rite Aid
Supermarket operator Albertsons agreed to buy the remnants of the Rite Aid drug chain on Tuesday, the latest deal to shake up a grocery industry already experiencing major upheaval. The combined company would have about 4,900 locations in 38 states and the District of Columbia, the companies said. Albertsons would rebrand its in-store pharmacies under the Rite Aid name, and would continue to operate some stand-alone Rite Aid pharmacies. Rite Aid agreed last year to sell 1,932 stores and three distribution centers to Walgreens for $4.38 billion after the companies failed to complete an even bigger deal.
Total Retail's Take: Consolidation in the grocery and pharmacy verticals continues with the announcement that Albertsons will purchase the remaining independent pieces of Rite Aid. Traditional grocers such as Albertsons are seeking ways to fortify their businesses as Amazon.com charges full speed ahead into their space, with its acquisition of Whole Foods last year being the driving force. There's a natural synergy to grocery and pharmacy, and therefore it makes sense that Albertsons would want to enhance its in-store pharmacies with the Rite Aid name, while at the same time being a single destination for consumers’ food, health and wellness needs. In addition to acquiring Rite Aid, Albertsons has been busy adding other businesses to the fold to fend off Amazon. In November it reached an agreement with Instacart to provide on-demand grocery delivery services, a market Amazon has targeted for growth with its merger of Prime Now and Amazon Fresh. Let the grocery wars begin!