Albertsons, Rite Aid cooking up a distinctive food, health competitor
Following the completion of the merger between Rite Aid and Albertsons, the Camp Hill, Pa.-based drug store chain will maintain its brand identity within Albertsons’ locations. Many of the 1,777 in-store supermaket pharmacies operated by Albertsons soon will fly the red, white and blue retail pharmacy logo most closely associated with the “With Us It’s Personal” slogan, officials from both Albertsons and Rite Aid shared with investors in a special meeting held Tuesday.
“We’re going to be a differentiated leader in the food, health and wellness offering,” John Standley, CEO of the combined Albertsons/Rite Aid. “We have a huge of resources and capabilities in the health/wellness/food space to really differentiate ourselves in the marketplace. We’re all going to take all of those resources, all of those capabilities, and we’re going to empower [our shoppers, our patients] to take care of themselves, their families and the community they live in with leading food and wellness offerings.”
Taken together, Albertsons/Rite Aid is a $81.4 billion company for the fiscal year ended Feb. 24, 2018, and is projecting to grow that base to $83 billion this fiscal year.
That full gamut of food and healthcare offerings includes everything from Plated to the PBM Envision Rx, from Health Dialog to RediClinic. It includes a loyalty program that reaches a collective 26 million shoppers with an approximate 520 million personalized deals each week.
The two banners will have plenty of opportunities to cross-promote, as more than 6 million households patronizing Rite Aid live within five miles of an Albertsons banner and more than 10 million households shopping an Albertsons banner live within five miles of a Rite Aid.
That’s exactly how Albertsons/Rite Aid executives see all of this coming together. A hectic millennial mom starts with a meal prepared from scratch, utilizing the convenience associated with the meal kit service Plated, for example. That same shopper can confer on incorporating the freshest of ingredients into her meal planning with Albertsons’ in-store food experts in the meat, deli or bakery departments as she waits for a prescription to be filled by her Rite Aid pharmacist.
For those managing polychronic conditions, a consultation with a Health Dialog-trained health coach may be in order, who can help her or family members lose weight, exercise more or quit smoking. As a reward for incorporating that healthier lifestyle, they can buy one of the many own brand beauty products available through either venue, Albertsons or Rite Aid, all the while using their loyalty card to generate better deals on future trips.
That model is scalable, whether it’s by adding more Rite Aid pharmacies into existing Albertsons supermarket banners or building more free-standing pharmacies. “As I look at the markets we’re in,” Standley said. “One growth area for us comes in two pieces. There are still 500-plus Albertsons stores without a pharmacy, 200 of which are in California. We have an opportunity to grow pharmacy by looking at some of those locations and seeing how they fit in the network. A market like Philadelphia is another great example, there are a lot of Acme’s that don’t have pharmacies. Putting that in with the Rite Aid stores can make a ton of sense. The second piece of the puzzle is, if you go to a market like Chicagoland, where we have a great pharmacy brand in our supermarkets, do we have the opportunity to grow freestanding drug stores in that marketplace with a well-established brand.”
Alternatively, Standley added, once Albertsons/Rite Aid builds the Rite Aid brand identity in markets like Arizona or Texas, it may beckon an opportunity to expand the freestanding retail pharmacy banner there.
Expert advice: pharmacist, in-store dietitian team can make a big impression with shoppers
The one-two juggernaut of the pharmacist and an in-store dietitian could make a big impact on consumers as they consider where to do the bulk of their grocery, health and pharmaceutical shopping in years to come.
While the combination of Amazon and Whole Foods is creating a number of impressive images, many retail industry officials have said that an in-store dietitian, working closely with the pharmacist, can help traditional retailers gain an edge with shoppers.
These operators are crafting a potent one-two punch combo that couples traditional chronic disease care and the kind of dietary lifestyle changes primary care practitioners have been advocating for ages. First, it dovetails nicely with a burgeoning health industry trend that rewards value-based care over fee-for-service agreements. Second, it’s a loyalty-inducing trip driver that could pull grocery shoppers back into the stores and off of their Fire Tablets and iPads.
Consumers are hungry for that health-infused nutrition information. “As many as 61% of our customers told us last year when we did a survey that ‘I need help with nutrition,’” said Colleen Lindholz, Kroger’s president of pharmacy and The Little Clinic. “They want us to simplify it for them.”
Managing health toward better outcomes through food is the long game. “It can’t just be pharmacists. It can’t just be physicians. It really is the holistic approach. Food is medicine and food is at the core,” Lindholz said. “It’s a team approach to better health.”
Pairing the dietitian with a community pharmacist offers retailers an opportunity to double down on improving healthcare outcomes, said Lisa Coleman, lead nutritionist at Giant Food. “Increased involvement of community pharmacists and nutritionists in patient care offers increased access for improved health care for patients,” she said. “We recognize that [by] offering co-taught classes on diabetes care and heart health, our pharmacists and nutritionist are able to be a part of the patient’s healthcare team, providing education and tips to manage chronic disease states.”
“Pharmacies located in grocery stores provide the perfect backdrop for creating synergy between food and medicine,” said Chris Irmscher, group director of pharmacy human resources at Albertsons, noting the number of disease states with which a dietitian can help. “A team of dietitians and pharmacists brings the phrase ‘food as medicine’ to life by providing the added health benefit of nutritional advice for our pharmacy patients. We are utilizing this dietitian and pharmacist tandem approach with our year-round diabetes tour program, our healthy aging classes and our DPP program, and we are just getting started.”
Alleviating confusion is the ultimate goal, some said, and it is important that the retailer get the pharmacist and all of its buyers involved in the process. Lewis Goldstein, vice president of marketing at LeForge, Wis.-based Organic Valley, said that shoppers are clearly unsure about what they are buying sometimes, and a dietitian can make a big difference.
“Working with buyers at their chains, dietitians can help develop simple languages for the consumer that will help with any confusion in the aisle and on the packaging,” he said. “With organic products, for example, there are so many claims being made that it is necessary to have an educated teacher in-store to explain what is real and what is not.”
As the online retail industry is continually working to drive efficiencies into that last mile, the pharmacist/dietitian team is helping consumers navigate the journey toward better health through nutrition and adherence. “We talk so much about the last mile when it comes to e-commerce and the delivery of products,” said Paul Gerner, vice president of drug store H-E-B. “When you look at the cost of health care and a healthcare system that tends to be very reactive, [crossing] that last mile with dieticians is the proverbial last mile in health care. The last mile in health care exists in the food patients are putting into their bodies. And there is currently no one to help them navigate that last mile. Nutritionists and dietitians can help in that last, and most critical, part of a patient’s journey.”
To effectively make that trek, however, retailers need to invest in a good pair of hiking boots. “For it to be sustainable, it needs to have a neutral or positive ROI,” Gerner said. “It really requires partnership across the medical industry, suppliers and retailers.”
For example, in today’s world of micro-marketing and social media, suppliers can play a key role educating consumers around how that whole proposition — pharmacist-assisted medication management, dietitian-directed better nutrition and that supplier’s healthier-for-you food item — how that proposition can help drive better health outcomes, Gerner said.
H-E-B adds chief digital officer to c-suite
H-E-B late Monday announced the appointment of Jag Bath to the newly created position of chief digital officer, overseeing all of the company’s digital products and services.
The appointment was made as H-E-B continues to rapidly expand its omnichannel offerings across the state.
Bath will continue in his current role as CEO of Favor Delivery, the on‑demand delivery service founded in 2013 that is now a wholly-owned subsidiary of H-E-B. In his dual role, Bath will report to H-E-B COO Martin Otto.
“Jag is a leading national figure in the digital space and this appointment reflects the central importance of building out H-E-B’s omnichannel service to meet customers’ evolving needs and expectations,” Otto said. “Our primary goal is to enable our customers to shop, pay for and receive their products in whatever way they choose – all while delivering an exceptional customer experience.”
“The investment we are making is reflective of the importance of building out new digital products and services to complement H-E-B’s world-class brick-and-mortar stores,” Bath said.
In addition to Favor, H-E-B recently has invested in HEBtoyou Delivery and H-E-B Curbside, which is available in more than 100 locations and is on track to reach 200 locations in 2018.
HEB.com also offers customers the ability to order and ship grocery, drug store and general merchandise products to 48 states and military bases worldwide.