Rite Aid, Walgreens and Longs

[rrr]

The freestanding store concept must have economic considerations...

I suppose if they've got the capital to tie up, owning the land is cheaper and better cost control in the long run. Could be wrong, but I don't think that Walgreens ever builds its own strip centers to rent space to others, so that kinda leaves only the freestanding option. Plus the need for drivethru and the fact that a lot of them are open 24 hours.

[Dave]

Besides owning stores, another common deal is to enter into a lease with the landowner - a 30 year lease with a 15 year out exercisable by the tenant is common. Walgreens or whoever builds the store and the building reverts to the owner of the land at the end of the lease. The cash flow from the lease payments usually supports a property value of one or two million dollars, possibly more.

[jamcool]

The freestanding store concept must have economic considerations that I'm not fully conversant with. All I know is that if you own a piece of vacant commercial property, it's usually very good news to hear that one of the large pharmacy chains is interested in buying or leasing your property. I've seen a couple of examples where the Walgreens of the world were willing to pay two or three times what was being offered by others for the same location.


The current Walgreens (and CVS) store-on-the-corner design actually uses the same square footage as a 7-11 or Circle K - and seem to be going up faster than those stores.

Drug stores out West have always seemed to be bigger in size than those in the east...we had Skaggs/Osco stores selling TVs and stereos and Walgreens with garden depts.(their stores seemed bigger in the 60s-70s)

[yoss99]

In 1983, Rite Aid spun off a grocery wholesaler they called Super Rite Foods located in Harrisburg, PA. It was spun off from Louis Lehrman and Sons food wholesaler of which Alex Grass' (Rite Aid founder) in-laws were partners in.
Grass took Super Rite public in 1984, made a bundle of money on that IPO, then took the company private again a few years later. Then had a second IPO to take the company public for the second time in the late 1980's, made more money, then sold Super Rite to Richfood in 1995 for $320 million.

Some of this info is on my website at http://www.fdrama.com

Years later, Martin Grass ousted his father as Chairman and CEO, made a few risky acquisitions, cooked the books, and is now serving a jail sentence in Florida. The guy had it all and blew it.
Martin Grass used to take a helicopter to work every morning from his Greenspring Valley, Maryland home to Rite Aid headquarters in PA.
In the 1990's Alex Grass' daughter opened several huge book stores called Bibelot, like Barnes and Noble stores, racked up huge debt, then funnelled money to an offshore account in the Cook Islands. Eventually she got caught by creditors and is now serving prison time as well.

Is there anyone honest in the Grass family? I doubt it.

[Steve Landry]

Wow.............they sound like the Friedlands of Food Fair.

[norcalraclerk]

Longs is California based. They have grown mainly organically. Strongholds are NorCal and Hawaii. Presence in other markets including NV, CO, WA, and OR is poor. They exited Arizona and Alaska in the 90's. Later in the 90's, they expanded into Oregon and Washington by purchasing the Drug Emporium franchisee up there (just 20 stores). Not sure how or why they are in Colorado, but they no longer do any business in Denver. Longs did buy some Sav-On Stores in NorCal about 20 years ago.

Rite Aid is based in PA. They've bought out dozens of other chains, and run mainly very small stores on the east coast, of under 8,000 square feet. They have not been around as long as many of the companies they bought, getting their start in the 60's or 70's, while buying chains like Thrifty (founded in 1929) and Payless (founded in 1939).

Payless was quite the animal itself during the 80's and 90's. They purchased Osco Stores in WA, ID, UT, and WY. They also purchased Pay N Save (from Thrifty) in WA, AK, and HI. Meanwhile, they grew their store base in core markets like OR and CA during that period quite strongly as well. Payless was owned by Kmart at that point. Yes, Kmart.

As Payless was growing in the early 90's, Thrifty was contracting. They sold off a couple sporting goods chains, and also sold Pay N Save. They removed the Thrifty brand from AZ, NM, and NV; stores were closed or sold to Osco (Sav-On).

When Thrifty and Payless joined (actually the investment group that had purchased Thrifty in 1992 purchased Payless in 1994 from Kmart) in 1994, the only pieces of Thrifty that were left were the CA Thrifty Stores, Thrifty Ice Cream Plant (probably the product that was keeping the CA Stores in business at that time), Big 5 Sporting Goods, and Bi-Mart in the pacific Northwest. Big 5 was split from TPI, and has since gone public. Bi-Mart was retained by TPI as an independently operating subsidiary and was sold by Rite Aid to some investors, who have in turn I think ended up selling the chain to employees within the past year or so (don't quote me on this).

http://www.bimart.com

Another thing:The west coast PayLess drugstore chain was originally 2(the Oregon-based Northwest one as well as Oakland-based "PayLess Super Drug Stores" that played a role in Albertsons' first entry into Northern California in the 60's/70's)that both got started in the late 1930's and merged circa 1980.Speaking of which,I have a sudden urge to start a new ABS/PayLess NorCal history topic...

[bigbubby]

Another thing:The west coast PayLess drugstore chain was originally 2(the Oregon-based Northwest one as well as Oakland-based "PayLess Super Drug Stores" that played a role in Albertsons' first entry into Northern California in the 60's/70's)that both got started in the late 1930's and merged circa 1980.Speaking of which,I have a sudden urge to start a new ABS/PayLess NorCal history topic...

The PayLess Super Drug Stores were ginormous. The largest was Rockridge in Oakland, it's now a Longs. The next largest I believe was Castro Valley, which was originally Lee Bros. I don't know if Rockridge was Lee Bros. or something else, but I wouldn't be surprised, even as a Longs in 1999-2000, they had pretty much a full apparel department.

[tkaye]

Another thing:The west coast PayLess drugstore chain was originally 2(the Oregon-based Northwest one as well as Oakland-based "PayLess Super Drug Stores" that played a role in Albertsons' first entry into Northern California in the 60's/70's)that both got started in the late 1930's and merged circa 1980.Speaking of which,I have a sudden urge to start a new ABS/PayLess NorCal history topic...

We've gone over this a couple of times before, but there were actually three PayLess chains. The two you mentioned and very small one (I think it was about five stores at its largest point) based in Tacoma, Wash. PayLess Northwest absorbed them around 1989.

[romleys]

The Payless Drugstore located at 5100 Broadway used to be an International Super Store. You can check out a picture on my website from the links at this site. Go to...
PURE GROCERY STORES

C.H.

[J-Man]

I thought I was the only one who remembered that store in Rockridge-- but I remember it as "International Market Place" or IMP. Maybe I'm mis-remembering, but this was around 1968 or so.