Bottom Dollar Food making its way to greater Pittsburgh, Youngstown, Ohio, markets
SALISBURY, N.C. — Discount grocery chain Bottom Dollar Food announced plans to enter the greater Pittsburgh and Youngstown, Ohio, markets.
The expansion includes 14 stores that will open in 2012 and is said to create more than 600 jobs.
The banner, which is owned by Delhaize America, has grown to 47 stores in North Carolina, Virginia, Maryland, New Jersey and Pennsylvania. In addition to its expansion in Pittsburgh and Youngstown, Ohio, Bottom Dollar Food also remains focused on expanding in the greater Philadelphia market, which currently encompasses 17 stores in the state of Pennsylvania and two stores in New Jersey.
"We look forward to serving the greater Pittsburgh and Youngstown, Ohio, communities by providing consumers with unbelievably low prices on groceries," said Bottom Dollar Food president Meg Ham. "Customers will find Bottom Dollar Food unique because we carry private brands and the national brands that matter most, and offer a meaningful, efficient assortment of fresh produce, meat and other products. Additionally, we provide our customers an energetic and lighthearted shopping experience."
What Walmart’s rumored acquisition would mean for Rite Aid’s West Coast operations
WHAT IT MEANS AND WHY IT’S IMPORTANT — If the rumors that surfaced last week about Walmart eyeing Rite Aid for a possible buyout turn out to be true, it would be one of the biggest stories of the year: Walmart would acquire the country’s third-largest drug store chain and more than double its U.S. store count.
(THE NEWS: Report: Walmart may be eyeing Rite Aid. For the full story, click here)
But the rumors — which so far, neither chain has commented on — raise at least one big question: What would Walmart do with 4,700 stores whose average size is 12,400 sq. ft., notwithstanding the good chance that the Federal Trade Commission would require it to give up many of them due to market overlap?
While known for its big-box stores, Walmart lately has expanded on the small-format front as well, notably with Walmart Express stores, which have an average size of 15,000 sq. ft. and at their largest are 30,000 sq. ft. Many of Rite Aid’s stores on the West Coast, some of which are as large as 20,000 sq. ft., could accommodate the format, and perhaps its 14,000-sq. ft. stores could as well; but its East Coast stores, which average about 11,000 sq. ft. and often are less than 10,000 sq. ft. would be too small to be anything except drug stores.
Other issues call the rumors’ veracity into question as well.
For years, analysts have suggested that Rite Aid sell off its West Coast stores, but while expressing openness to doing so if the right offer came along, it has basically said no. Despite they’re not performing as well as their East Coast counterparts, the stores represent a big part of Rite Aid’s business, and selling them would mean abandoning an important region of the country.
Another issue is the company’s efforts to spur organic growth — particularly, the Wellness+ loyalty card program and such store segmentation efforts as the new Wellness store format — which have taken place under the leadership of president and CEO John Standley and chairman Mary Sammons. Standley was part of Sammons’ original recovery team at Rite Aid, and he engineered the recovery at Pathmark before that chain’s acquisition by A&P, but Rite Aid’s growth efforts don’t look like those of a company getting ready to put itself up for sale. This includes a new Wellness store in Newport Beach, Calif., which indicates a continued commitment to its West Coast business, not to mention a $300 million capital expenditure budget that includes $127 million for store remodels and merchandising initiatives and plans to remodel about 500 stores in fiscal year 2012.
Wellness+ reaps benefits for chain and consumers
Since its nationwide launch in April 2010, Rite Aid’s wellness+ loyalty card program rapidly has proven itself to be a phenomenal boost to the chain’s business as the first-ever loyalty program designed to enhance customers’ savings and well-being together.
“Our customers told us they wanted a program that offered more than just discounts. The wellness+ program marries our customers’ fiscal and physical well-being, and we reward them with both member- only shopping discounts and health-and-wellness benefits that increase the more they shop and the more prescriptions they fill at Rite Aid,” SVP marketing John Learish said when the card was launched.
In a June 23 conference call with investors to discuss the company’s first quarter 2012 financial results, president and CEO John Standley said that wellness+ card members were emerging as some of Rite Aid’s most valuable customers. At that time, the program boasted nearly 40 million members across the country — compared with 16 million as of July 26, 2010, just 12 weeks after the program’s nationwide launch.
Card members accounted for 67% of front-end sales during the quarter and 62% of total scripts. Gold and silver members were shopping at both ends of the store, and 50% of those customers were visiting the stores every week. In addition, members had higher basket rings than nonmembers.
Needless to say, wellness+ has been a smashing success and, along with store-segmentation efforts, a major factor in ushering in a renaissance for the country’s third-largest retail pharmacy chain, a company once better known for its period of retrenchment following legal and financial troubles during the last decade.
The program offers a multitude of benefits for members, such as shopping discounts — including 10% off Rite Aid-brand products — weekly members-only discounts and access to pharmacists 24 hours a day and seven days a week by telephone or online. Members earn points through certain pharmacy and store purchases, which they can put toward free health screenings and additional merchandise discounts.
But the program also is a big opportunity for suppliers. When Tony Montini returned to Rite Aid as SVP category management in February — he served brief stints there in the late 1980s and early 2000s, and has since been promoted to EVP merchandising, with former SVP business development Bryan Shirtliff taking over as SVP merchandising — he appeared well-prepared to increase the success of wellness+ among suppliers.
Suppliers that participate in the program get to participate in Rite Aid’s weekly promotional email program to members and get access to the chain’s CRM analytics reports, which include a scorecard of loyalty metrics, shopper decile analysis, category affinity analysis and market basket analysis, according to a program brochure for suppliers. The brochure also touts target marketing opportunities, such as weekly emails, the online member dashboard on Rite Aid’s website and direct mail.