Rite Aid 2015 Annual Report Download - page 9

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.
Cost Control—After years of reducing our SG&A expense, we have effectively managed our costs
as a percent to sales as we continue positioning Rite Aid for growth. At the same time, we have
completed several refinancing transactions that have significantly reduced our annual interest expense
over the past few years and will continue to benefit our business heading forward. We will continue to
focus on controlling costs in fiscal 2016 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 68.8%, 67.9%, and 67.6% of our total sales
in fiscal years 2015, 2014 and 2013, respectively. In fiscal years 2015, 2014 and 2013, prescription drug
sales were $18.1 billion, $17.2 billion, and $17.1 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
2015. Our principal classes of products in fiscal 2015 were the following:
Percentage
Product Class of Sales
Prescription drugs ......................................... 68.8%
Over-the-counter medications and personal care ................... 9.6%
Health and beauty aids ..................................... 4.9%
General merchandise and other ............................... 16.7%
We offer a wide variety of products under our private brands in virtually every department. We
intend to increase the private brand sales percentage in fiscal 2016 by introducing new brands, entering
new categories and enhancing our seasonal programs. We believe that our assortment is differentiated
and a compelling value to our customers based on our quality standards and everyday value pricing.
We have a strategic alliance with GNC under which we have opened over 2,200 GNC stores within
Rite Aid stores as of February 28, 2015 and have a contractual commitment to open at least
230 additional GNC stores within Rite Aid stores by December 2019. We incorporate the GNC stores
within Rite Aid stores concept into many of our new and relocated stores and into many of our
Wellness remodels. GNC is a leading nationwide retailer of vitamin and mineral supplements, personal
care, fitness and other health-related products.
Technology
All of our stores are integrated into a common information system, which enables our customers
to fill or refill prescriptions in any of our stores throughout the country, reduces chances of adverse
drug interactions, and enables our pharmacists to fill prescriptions more accurately and efficiently. This
system can be expanded to accommodate new stores. Our customers may also order prescription refills
over the Internet through our recently enhanced website, www.riteaid.com, or over the phone through
our telephonic automated refill systems for pick up at a Rite Aid store. We have automated pharmacy
dispensing units in high volume stores, which are linked to our pharmacists’ computers that fill and
label prescription drug orders. The efficiency of these units allows our pharmacists to spend more time
consulting with our customers. Additionally, each of our stores employs point-of-sale technology that
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