Rite Aid is grabbing headlines for locking up nearly all items in a southern California store, putting everything from baby formula and paper towels to makeup and potato chips behind plexiglass.
The drugstore chain, which emerged from federal bankruptcy protection earlier this month, took measures at its store in Compton that go beyond locking up higher-value items that require a drugstore employee to unlock a case. Rite Aid’s Compton store this summer began requiring customers to “ring for help” by pressing a button that alerts an employee to come unlock the encased products throughout the store.
Rite Aid wouldn’t say whether the near all-item lockup would be replicated at stores outside of southern California, but said it’s part of a strategy to test “a range of product protection solutions across (the company’s) footprint to ensure merchandise is available to our customers.”
“At the same time, we are also exploring different shrink mitigation actions to ensure our pharmacies serve our communities without any disruption,” Rite Aid said in a statement. “We are taking an active role in helping law enforcement in their pursuit of shoplifters, as well as continuing our efforts to educate community leaders on the impact of retail theft and advocate for solutions. We are applying multi-layer product protection solutions that we continue to assess regularly, and we are doing all we can to provide a safe environment for our associates and customers while we support the health needs across the communities we serve.”
Rite Aid, which has eliminated $2 billion in debt and earlier this month said it has “received approximately $2.5 billion in exit financing to support the business going forward,” is operating in 16 states after shedding more than 500 stores during the bankruptcy proceedings. The drugstore chain, which had been losing money for several years, filed for Chapter 11 bankruptcy protection in October of last year. At that time, the company operated more than 2,200 drugstores across 17 states.
Some see Rite Aid’s theft control effort as “extreme,” but drugstore chains, including rivals CVS Health and Walgreens, are facing tough decisions to close underperforming stores and theft and its costs to the companies are figuring into those moves.
Walgreens, for example, in June disclosed it was finalizing a “footprint optimization program” to close certain underperforming stores of the company’s more than 8,600 U.S. locations. Manmohan Mahajan, Walgreens executive vice president and global chief financial officer, said “25% is the overall footprint” that executives are evaluating for potential closure. While there are many reasons Walgreens stores are underperforming, company insiders and analysts who follow the company say store theft definitely figures in store underperformance.
“Retail crime continues to be one of the top challenges facing our industry today. We are focused on the safety of our patients, customers and team members, and have taken a number of steps to help reduce organized retail theft in our stores,” Walgreens said in a statement. “We also continue to partner with others across the retail industry, as well as law enforcement, elected officials and community leaders to improve shrink trends.”
