Rite Aid 2015 Annual Report Download - page 11
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Competition
The retail drugstore industry is highly competitive. We compete with, among others, retail
drugstore chains, independently owned drugstores, supermarkets, mass merchandisers, discount stores,
wellness offerings, dollar stores and mail order pharmacies. We compete on the basis of store location
and convenient access, customer service, product selection and price. We believe continued
consolidation of the drugstore industry, the aggressive discounting of generic drugs by supermarkets
and mass merchandisers and the increase of promotional incentives to drive prescription sales will
further increase competitive pressures in the industry.
Marketing and Advertising
In fiscal 2015, marketing and advertising expense was approximately $318.2 million, which was
spent primarily on weekly circular, broadcast, and digital advertising. Our marketing and advertising
activities centered primarily on the following:
• Product price promotions to draw customers to our stores;
• Our wellness + loyalty program, which benefits members based on accumulating points for
certain front end and prescription purchases, and offers + UP rewards to provide members
additional savings;
• Emphasis on the value of our private brand products;
• Support of specific initiatives and stores, including competitor market intrusion and prescription
file buys; and
• Our vision to be the customer’s first choice for health and wellness products, services and
information.
Under the umbrella of our ‘‘With Us It’s Personal’’ brand positioning, we promote educational
programs focusing on specific health conditions and incentives for patients to transfer their
prescriptions to Rite Aid. We are also emphasizing our automated courtesy refill service and
immunization services. We believe all of these programs will help us improve customer satisfaction and
grow profitable sales.
Associates
We believe that our relationships with our associates are good. As of February 28, 2015, we had
approximately 89,000 associates: 11% were pharmacists, 43% were part-time and 26% were represented
by unions. Associate satisfaction is critical to our success. Annually we survey our associates to obtain
feedback on various employment-related topics, including job satisfaction and their understanding of
our core values and mission.
The pharmacist shortage has eased significantly. The increase in the number of graduates from
U.S. Schools of Pharmacy is meeting our workforce demand. However, pharmacist employment
opportunities still exist in certain areas.
Research and Development
We do not make significant expenditures for research and development.
Licenses, Trademarks and Patents
The Rite Aid name is our most significant trademark and the most important factor in marketing
our stores and private brand products. We hold licenses to sell beer, wine and liquor, cigarettes and
lottery tickets. As part of our strategic alliance with GNC, we have a license to operate GNC
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