Dive Brief:
- Raley’s will permanently close 27 pharmacies under its Bel Air, Nob Hill and Raley’s banners, the company announced on is website. The closures began Oct. 26 and will be completed Nov. 5.
- Existing prescriptions will be transferred from the pharmacies to Walgreens, CVS Pharmacy or Rite Aid locations. Customers will be notified of the timing and location for any transfers.
- Raley’s will continue to operate 69 existing pharmacies across California and Nevada.
Dive Insight:
The grocer regularly assesses the performance of stores and pharmacies, and these closures were based on relevance and profitability, the company said. Company spokesperson Chelsea Minor also told Grocery Dive in an email the pharmacy space faces many challenges today including consolidation, low reimbursement rates and high operating costs.
"We chose to close our pharmacies where profitability was low and alternative options were nearby to make the transition as seamless as possible for impacted patients," Minor said.
According to the company’s list of closures, three pharmacies will close in the Reno, Nevada, area and nine will close in the greater Sacramento area. Several in the San Francisco Bay Area will also close.
The loss of pharmacies could be a hit for a company that has been focused on building its reputation as a health-driven grocer. Raley’s has launched several initiatives from eliminating candy at checkout to employing a nutrition strategist to repositioning sugary cereals on the bottom shelf.
Minor said tough decisions like this enable Raley's to continue to make bold moves to make healthier food more available to everyone and to revolutionize the way people shop for groceries.
Grocers with successful pharmacies are ranked high in customer satisfaction and can boost basket size and build customer loyalty. On the other hand, retail pharmacy closures are becoming relatively common. Lunds & Byerlys exited the pharmacy business in Minnesota in July, and Shopko sold off its pharmacy business amid a spree of store closures late last year and early this year. Shoppers Food & Pharmacy and Stater Bros. have also closed down pharmacy operations.
Raley’s said it will support affected employees at each location, offering pay and benefits for "a period of time" and future employment assistance with the organization or outside of it.
