Sizing Up the Top 10 Competitors Facing Rite Aid in 2024

As one of the last major fully integrated pharmacy chains, Rite Aid faces relentless competitive pressure from all sides of healthcare retail. With over 2,300 drugstores nationwide, Rite Aid ranks fourth based on location count behind rivals CVS, Walgreens and Walmart, according to Drug Channels Institute.

Prescription sales and front-end merchandise still account for over 85% of Rite Aid‘s ~$24 billion in annual revenues. As consumer preferences and shopping habits evolve, Rite Aid aims to differentiate and digitize its offerings to retain pharmacy customers and related profits.

Below I size up Rite Aid against 10 major competitive forces with breakdowns of latest market positioning and 2023 outlooks.

Below I analyze 5 of Rite Aid‘s toughest pharmacy competitors and how the drugstore chain can better compete in 2024.

1. CVS Leverages Healthcare Reach

With the most U.S. locations and second-highest prescription revenues behind Walgreens, CVS Health is a perennial powerhouse. And the pharmacy giant continues to expand capabilities and pull customers into its ecosystem.

In April 2022, CVS opened 400 new HealthHUB locations for acute care and expanded primary care treatment. Its in-store MinuteClinics provide basic healthcare visits, COVID-19 testing and vaccinations, all things Rite Aid lacks. What‘s more concerning is CVS‘ planned expansion into full primary care services at its HealthHUBs starting in late 2023. By broadening its community health reach, I expect CVS to capture even more prescription share.

How Rite Aid Can Compete:

• Focus and improve RediClinic locations as CVS encroaches further into everyday health services
• Promote immunization expertise as CVS leverages COVID vaccination push
• Invest in prescription home delivery capabilities to counter CVS‘ mail order lead

2. Ascendant Kroger Pharmacies Anchor Grocery Trips

While Kroger only holds an estimated 4% national prescription market share compared to Rite Aid‘s 5%, the Midwest grocer operates over 2,200 in-store pharmacies that continue growing in importance. Anchored by increasing grocery store trips since COVID-19 began, Kroger pharmacies filled a record 246 million prescriptions in FY 2021.

Kroger also drove over 240 million visits to its websites and apps last year. Digital tools like Kroger Rx Savings Finder and Vitacost.com merger expand capabilities in health-focused e-commerce – an area Rite Aid looks to strengthen. With sturdy prescription growth momentum from its loyal grocery shoppers I see Kroger pharmacies taking share in key regions.

How Rite Aid Can Compete:

• Boost value perceptions through improved subscription savings programs
• Spotlight convenient stand-alone locations in regional ads
• Increase buy online, pick up in store prescription orders

3. Ascendant Publix Pharmacies Raise Southeast Threat

Though just a $2 billion prescription business, Publix Super Markets’ pharmacy unit makes this list given its outsized presence and growth in the Southeast. Publix dispensed nearly 150 million prescriptions in 2021 across 1,281 in-store pharmacies centered in Florida, Georgia and the Carolinas.

Publix also opened 49 new pharmacies last year and aims to add another 50 annually. Rite Aid considers the Southeast its strongest region with 30% of locations, so Publix’ looming expansion poses a long-term hurdle. Its renowned service quality and grocery store trips share resemblance to ascendant Kroger pharmacies.

How Rite Aid Can Compete:

• Talk up high pharmacist staffing levels in regional advertising
• Spotlight durable reputation with long operating history in Southeast
• Launch targeted subscription savings plans to counter Publix’ value push

4. Amazon Pharmacy Primed to Disrupt Mail Order Market

The e-commerce juggernaut’s two-year old pharmacy business may only account for 0.5% of prescription sales, but discount offerings linked to Prime make Amazon Pharmacy’s push a major concern for industry laggards. Unit growth has already accelerated with analyst Drug Channels Institute estimating 775,000 patients served in 2022 – up from 200,000 last year.

Backed by Amazon’s logistics machine, cost-focused shoppers save up to 80% on generic meds and 40% on branded prescriptions through Prime membership. Pharmacy VP John Love even called out Rite Aid by name as a key mail order share donor during Amazon’s Q3 2022 earnings call.

How Rite Aid Can Compete:

• Spotlight pharmacy expertise against Amazon’s cost-first focus
• Improve prescription home delivery speed and transparency
• Launch members-only Rx pricing to counter Prime subscriber appeal

5. Ascendant Aldi Discounters Add Price Pressure

While German discount grocery chain Aldi does not operate pharmacies yet in its 2,000+ U.S. stores today, recent moves demand Rite Aid‘s attention. Aldi’s stunning rise serving cost-focused shoppers has stolen grocery and mass retail market share for over a decade.

2023 poses even greater threats as Aldi moves into new healthcare services. The discounter began selling over-the-counter medications in all its U.S. stores last November at everyday low prices. Reports also emerged in late 2022 of Aldi filing trademarks for future pharmacy services.

While I expect a yearslong runway before potential pharmacies open, price-driven consumers would quickly flock to an Aldi prescription offering. Its momentum in opportunistic healthcare retail already forces struggling operators like Rite Aid to prepare.

How Rite Aid Can Compete:

• Promote clinical expertise over front-end merchandise facing OTC threat
• Improve value perceptions via prescription savings programs
• Consider European-style health hub pilots to counter looming care gaps

Rite Aid faces relentless competition for vital pharmacy sales and margin. And unfortunately the road ahead only grows more difficult as disruptors like Amazon Pharmacy and Aldi discounted healthcare offerings emerge.

By showcasing superior care quality, prescription savings value and convenience, Rite Aid can better stand out in its key regions of strength. Investments in evolving omnichannel capabilities also help Rite Aid compete for the future of drug retail.

But make no mistake – as fewer integrated pharmacy chains remain the fights for survival only intensifies. Rite Aid must work diligently to earn prescription share and front store trips over these capable competitors.