Rite Aid 2013 Annual Report Download - page 6

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customers and continues to provide significant value to members earning enough points to reach the
Gold, Silver or Bronze tier levels. In addition to tiered discounts and wellness rewards, members
receive exclusive sale pricing and the opportunity to earn Plus Up Rewards, which are offers on certain
items featured in our weekly circular that provide additional savings during return shopping trips.
Both participation in the program and wellness+ card usage continue to be strong. As of April
2013, the wellness+ program had over 25 million active members, defined as members who have used
their wellness+ card at least twice over the previous 26 weeks. At the end of our fiscal year, wellness+
members accounted for 79% of front-end sales and 68% of prescriptions filled. Members continue to
have higher basket sizes than non-members and also have a much higher rate of prescription retention.
In addition, our number of Gold and Silver members—Rite Aid’s most valuable and satisfied
customers—continues to increase. We believe that the wellness+ program has contributed to the
improvements in our front-end same store sales and same store prescription count. We plan on making
additional incremental investments in wellness+ in fiscal 2014, as we expect more customers to move
into the Gold, Silver and Bronze tiers. We also intend to expand wellness + in fiscal 2014 and leverage
our spend data through the use of advanced customer analytics.
Private Brands—In fiscal 2011, we began to roll out our new private brand architecture, which
included the consolidation of our private brands into three separate tiers. The initiative included
enhanced package designs for our private brand items and the introduction of our price-fighter brand,
Simplify. We now have approximately 3,000 private brand items and our private brand penetration has
increased from 16% in fiscal 2011 to 18.3% as of the end of fiscal 2013. This rollout has been
completed and we now have approximately 3,000 items in these brands. In fiscal 2014, we will continue
to aggressively promote our private brands, which offer great value to our customers and strong
margins for Rite Aid, through specific promotional programs and the introduction of new seasonal
categories.
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. As a result, in March we introduced our new and improved riteaid.com
website, which provides easier navigation, a more personalized web experience and enhanced
e-commerce. We are also releasing quarterly updates for our mobile app and have plans to introduce
apps for the iPad and Passbook.
Wellness Store Remodels—In fiscal 2013, we continued to strengthen Rite Aid as a wellness
destination by converting more than 500 stores to our Wellness format, which brought our chain-wide
total to nearly 800 by the end of the fiscal year. In addition to improved interior design, expanded
clinical pharmacy services and new wellness product offerings, these stores are staffed with our unique
Wellness Ambassadors, who serve as a bridge from the front-end of our stores to the pharmacy and
provide an added level of customer service. Our customers have responded favorably to this unique
store format as front-end sales trends in these stores have been above the chain average.
Also in fiscal 2013, we introduced the latest iteration of our Wellness store format known as
‘‘Genuine Well-being.’’ These stores feature new interior design, additional wellness items and unique
merchandising displays that bring technology to our stores so that our customers can make more
informed purchase decisions. This latest Wellness store format demonstrates how we are focused on
driving innovation in our stores so that we continue meeting the rapidly changing needs of our
customers.
We plan to complete an additional 400 Wellness remodels in Fiscal 2014. We believe these
remodels are a cost-effective way to strengthen our store base, grow sales and offer our customers a
unique and engaging wellness experience.
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