Rite Aid 2014 Annual Report Download - page 8

margins for Rite Aid, through specific promotional programs and the introduction of new private brand
items.
Enhanced Digital Offerings—As we continue working hard to improve the customer experience in
our 4,600 stores, we’re also focused on providing enhanced digital resources that better reflect our
brand of health and wellness. In addition to our new and improved www.riteaid.com website, we
continue to enhance our mobile app with quarterly updates while engaging with customers on social
media sites like Facebook and Twitter.
Customer Service—We have put several store programs in place to improve the customer service
experience, including the addition of Wellness Ambassadors to more stores and our chain-wide
emphasis on greeting our customers more frequently and assisting them with purchases. We have also
made investments in technology to make it easier for our store associates to perform necessary tasks
such as price changes and backroom inventory management. By providing our associates with the ability
to execute these tasks more efficiently, we give our store teams more time to focus on providing
excellent service to our customers. In addition, fiscal 2015 will be the third consecutive year in which
we have increased our budget for associate training and development. We believe this additional focus
on developing our associates to provide superior customer service has and will continue to help us
drive our improved overall performance.
Cost Control—We continue to leverage the significant reductions we have made to our SG&A
expense over the past few years. At the same time, we have completed several refinancing transactions
that saved approximately $85 million in annual interest expense for fiscal 2014 and will continue to
benefit our business heading forward. We will continue to focus on controlling costs in fiscal 2015 so
that we can maximize the benefits of our sales and customer service initiatives and capital investments.
Products and Services
Sales of prescription drugs represented approximately 67.9%, 67.6%, and 68.1% of our total sales
in fiscal years 2014, 2013 and 2012, respectively. In fiscal years 2014, 2013 and 2012, prescription drug
sales were $17.2 billion, $17.1 billion, and $17.7 billion, respectively. See ‘‘Item 7 Management’s
Discussion and Analysis of Financial Condition and Results of Operations’’ and our consolidated
financial statements.
We carry a full assortment of non-prescription, or front end products. The types and number of
front end products in each store vary, and selections are based on customer needs and preferences and
available space. No single front end product category contributed significantly to our sales during fiscal
2014. We also offer photo finishing services in a majority of our stores. Our principal classes of
products in fiscal 2014 were the following:
Percentage of
Product Class Sales
Prescription drugs ........................................ 67.9%
Over-the-counter medications and personal care .................. 9.8%
Health and beauty aids .................................... 5.1%
General merchandise and other .............................. 17.2%
We offer a wide variety of products under our private brands. We intend to increase the private
brand sales percentage in fiscal 2015 by entering new categories, enhancing our seasonal programs and
improving the in-stock position with our private brand suppliers. We believe that our customers find
these products to be of high quality and provide great value.
We have a strategic alliance with GNC under which we have opened over 2,200 GNC stores within
Rite Aid store as of March 1, 2014 and have a contractual commitment to open at least 300 additional
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