Rite Aid Optimizes Supply Chain, Category Management
With the retail supply chain in flux, Rite Aid has taken the initiative in improving its category management by expanding its partnership with Relex Solutions, a provider of unified retail optimization solutions.
After launching Relex’s end-to-end forecasting and replenishment solution in early 2021, Rite Aid will expand its use of Relex to include space and floor planning, as well as space-aware replenishment for more than 2,400 stores across the country.
By bringing together space planning, store and distribution center forecasting, and replenishment planning within a single centralized solution, Rite Aid will automate and streamline processes while gaining end-to-end visibility into its multi-echelon supply chain.
“Expanding our partnership with Relex is crucial to our merchandising transformation and journey to become a destination for whole health,” said Erik Keptner, chief merchandising and marketing officer at Rite Aid. “Creating a holistic, unified approach to supply chain and category management optimization will allow us to build a foundation for customer-centric assortment, enable greater speed and efficiency, and provide better assortment visualization and communication for our field and operations teams — ultimately improving our customer experience.”
“We are excited to expand the partnership and provide a truly unified solution to Rite Aid,” said Frank Lord, chief revenue officer at Relex, whose U.S. headquarters is in Atlanta. “They are moving to a fully unified forecasting and replenishment system, coupled with the benefits of space planning.”
Relex also recently teamed up with Dollar Tree Inc. to improve the discount retailer’s forecasting and replenishment ability. The new platform helps optimize collaboration and information sharing between Dollar Tree’s stores and central planning teams.
“Relex’s rich supply chain data will help enhance the customer experience by enabling accurate allocations, improved promotional forecasting and highly localized space optimization for each product in Rite Aid’s assortment,” added Carlos Victoria, Relex SVP of sales, Americas. “We’re excited to demonstrate how unifying their processes will reduce silos, increase efficiencies and improve outcomes across their business.”
Meanwhile, in other Rite Aid news, the company reported net loss from continuing operations of $36.1 million, or 67 cents loss per share, for its third fiscal quarter ended Nov. 27, 2021. Adjusted net income from continuing operations was $8.2 million, or 15 cents income per share, compared with the prior-year third quarter’s $21.6 million, or 40 cents per share. Adjusted EBITDA from continuing operations increased 12.7% to $154.8 million, compared with last year's $137.4 million.
Further, to reduce costs and improve profitability, Rite Aid has implemented a store closure program. The program will ensure that the company has a healthy foundation to grow from, with the right stores in the right locations. As a result of this ongoing review, Rite Aid has already identified 63 stores for closure in a move that's expected to provide an annual EBITDA benefit of approximately $25 million. The closures began this past November. The review work is still ongoing, so the number of closures is expected to increase.
With more than 2,000 retail pharmacy locations across 17 states, Camp Hill, Pa.-based Rite Aid is No. 19 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.
