Rite Aid Corp. plans to add a limited-assortment grocery concept to its stores in Greenville, S.C., under a co-branding arrangement with Supervalu Inc.'s Save-A-Lot supermarket chain.


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Rite Aid to test grocery format with Save-A-Lot

September 7th, 2010

GREENVILLE, S.C. – Rite Aid Corp. plans to add a limited-assortment grocery concept to its stores in Greenville, S.C., under a co-branding arrangement with Supervalu Inc.'s Save-A-Lot supermarket chain.

The drug store chain said Tuesday that under the licensing pact, its 10 stores in Greenville will be called Save-A-Lot Food Stores/Rite Aid Pharmacy and continue to be owned and operated by Rite Aid.

Plans call for the 10 stores to stay open during the conversion, which is expected to be completed in October. The remodeling process has been designed to make sure the pharmacies remain accessible, according to Rite Aid.

"We believe this new co-branded concept meets the needs of today's consumers, who continue to search for value, quality and convenience, and we're excited about the chance to offer our customers high quality grocery products including fresh meats and farm-fresh produce at great prices," Rite Aid chief operating officer Ken Martindale said in a statement.

"We chose to add Save-A-Lot because of its strong sales record, wide selection of attractively priced exclusive brands and its solid reputation for discount grocery," Martindale explained. "Plus, it's a model that's efficient for Rite Aid associates to operate."

Rite Aid noted that the 10-store test is part of its segmentation strategy. Since early 2009, the retailer has been moving from operating all of its stores the same way to identifying unique opportunities among groups of similar stores.

"This is one of those unique opportunities, and we're excited about the test," Martindale commented.

Bill Shaner, president and chief executive officer of Save-A-Lot, stated, "This new format, featuring aspects of both traditional Rite Aid pharmacies and Save-A-Lot food stores, will provide added convenience and value to consumers in the Greenville, S.C., area. This relationship is an opportunity for Save-A-Lot and Rite Aid to test a co-branding strategy and the integration of Rite Aid pharmacies into our traditional Save-A-Lot grocery store model."

Rite Aid's move comes as its chief rivals, Walgreen Co. and CVS Caremark Corp., have ramped up their grocery offerings.

In August,  CVS unveiled an urban store format that features a revamped floor plan and much more space devoted to groceries and consumables. Meanwhile, Walgreens last month rolled out an expanded food selection at 10 stores in Chicago communities identified as "food deserts" and introduced DR Delish premium private label snacks and beverages in stores nationwide. Walgreens picked up the brand through its acquisition of metropolitan New York drug chain Duane Reade.

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