What the Rite Aid Bankruptcy Means for You

The national chain isn’t closing for good, but its footprint will get smaller

Donna Fuscaldo,

AARP

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En español

Published October 16, 2023

Rite Aid has filed for Chapter 11 Bankruptcy.

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Rite Aid, the Philadelphia-based drugstore chain with 2,100 retail pharmacy locations across 17 states, filed for Chapter 11 bankruptcy protection over the weekend, as opioid lawsuits and years of playing second fiddle to CVS and Walgreens finally took their toll. The bankruptcy filing comes as all of the nation’s drugstore chains are facing increased competition from Amazon, Walmart, Target and Costco, all of which sell drugstore items and fill prescriptions, sometimes more cheaply.

Rite Aid isn’t shutting down completely but will close underperforming stores. The company has proposed closing roughly 400 to 500 stores in the bankruptcy, according to a Wall Street Journal report. In the first three months of this year, Rite Aid closed 25 stores. Since 2021, it has shut down 180 locations. The drugstore company did not say how many stores it will be left with following the restructuring or where the closings will occur.

As part of its bankruptcy filing, Rite Aid said it had reached an agreement to restructure the company and has received $3.45 billion in new financing to support its operations. The company also named Jeffrey S. Stein as its new CEO. Stein said in prepared remarks that the bankruptcy will enable Rite Aid to move ahead as a stronger company.

Rite Aid, Walmart, CVS and Walgreens have all been the target of lawsuits over how they filled prescriptions for highly addictive opioid painkillers. In March, the U.S. Department of Justice filed a lawsuit against Rite Aid, alleging that from May 2014 to June 2019, it had filled hundreds of thousands of prescriptions for opioids knowing they were illegally obtained. Walmart, CVS and Walgreens have already announced multibillion-dollar settlements over similar allegations.

What it means for you

It’s not clear which Rite Aid stores will close, but the company said in its filing that it’s making every effort to ensure customers of impacted stores have access to health services at either another Rite Aid or a nearby pharmacy. Rite Aid said it will work with customers to transfer prescriptions to avoid any disruptions. It didn’t announce any changes to its loyalty program as of now.

While the Rite Aid bankruptcy is worrisome for older adults who fill their prescriptions at the drugstore chain, Edgar Dworsky, founder and editor of Consumer World, says the impact should be minimal. “My sense is that there will be no change in operations at Rite Aid stores, at least in the short run,” says Dworsky. “If they begin closing some stores, they will transfer existing prescriptions to other nearby pharmacies.” That shouldn’t be too hard given that Rite Aid stores are usually located close to the other chains. For example, near Dworsky, in Revere, Massachusetts, the Rite Aid is directly across the street from a Walgreens store. If you are concerned, experts say to call your local Rite Aid and ask them to transfer your prescriptions now.

Any store closing may also mean a discount on drugstore items. Shopping experts say any liquidation sale is an opportunity to stock up. But be mindful of the shelf life of items including vitamins, sunblock and cleaning materials, which tend to lose their efficacy over time.

“We can expect to see sales on inventory at Rite Aid as they get closer to closure dates,” says shopping expert Andrea Woroch. “Keep an eye out and ask the store manager/ associates if they have any insider intel on when you can expect markdown.”

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Donna Fuscaldo is a contributing writer and editor focusing on personal finance and health. She has spent over two decades writing and covering news for several national publications including The Wall Street Journal, Forbes, Investopedia and HerMoney.

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