Rite Aid 2016 Annual Report Download - page 10

We have also leveraged daily deliveries from McKesson to significantly reduce pharmacy inventory at
stores.
Private Brands—Our private brand items continue to resonate with consumers as private brand
penetration has increased from 16% in fiscal 2011 to 18.7% in fiscal 2016. Throughout fiscal 2016, we
continued our efforts to create a world-class portfolio of private brand items, which offer great value to
our customers, strong margins for Rite Aid and help to differentiate our offering from the competition.
We introduced our new Big Win brand, which offers budget-friendly value on high quality consumable
items, as well as Dreamhouse, which offers indulgent yet affordable treats. In addition, we completed
the chainwide launch of Receutics, an exclusive dermatologist strength over-the-counter skin repair
brand. We plan to introduce additional brands and items throughout fiscal 2017.
Enhanced Digital and Technology Offerings—Over the past few years, we have been highly focused
on improving the customer experience by providing enhanced digital resources that better reflect our
brand of health and wellness. These efforts have included the launch of our new and improved
www.riteaid.com website, an enhanced mobile app and our new e-commerce site that provides online
shoppers with easier navigation. In fiscal 2016, we built upon these efforts by accepting mobile
payments such as Apple Pay and Google Wallet at all stores. We also have installed proximity beacons
that give us a better understanding of our customer base so that we can better meet their needs.
Customer Service—We have put several store programs in place to improve customer service,
including the addition of Wellness Ambassadors in more stores. We are also investing in training for
our store associates to deliver a consistently outstanding experience for our customers. We continue to
invest in technology to make it easier for our store associates to perform necessary tasks both at the
point of sale and on the sales floor. 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 and completing several refinancing
transactions to lower our interest expense, we have effectively managed our costs even as we make
critical investments for growth such as acquiring EnvisionRx, supporting wellness+ with Plenti and
continuing to complete Wellness store remodels and prescription file buys. We will continue to focus on
controlling costs in fiscal 2017 so that we can maximize the benefits of our sales and customer service
initiatives along with our capital investments.
Products and Services
Sales of prescription drugs for our Retail Pharmacy segment represented approximately 69.1%,
68.8% and 67.9% of our total drugstore sales in fiscal years 2016, 2015 and 2014, respectively. In fiscal
years 2016, 2015 and 2014, prescription drug sales were $18.4 billion, $18.1 billion and $17.2 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
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