Rite Aid builds on co-branding success with Save-A-Lot deal

WHAT IT MEANS AND WHY IT’S IMPORTANT There have been a spate of announcements in the past month around the growing prominence of fresh-food offerings in nontraditional retail settings (aka the corner drug store) that capitalize on the convenience opportunity a typical pharmacy footprint represents. Walgreens announced a move to bring healthier food choices to more inner-city residents, and CVS/pharmacy recently expanded its Urban Cluster store concept featuring a more prominent consumables department. But Rite Aid’s story is not a me-too story. It’s a branding story, or rather, a co-branding story.

(THE NEWS: Rite Aid inks deal with Save-A-Lot. For the full story, click here)

After all, Rite Aid has had a lot of success with their co-branding efforts. Take their partnership with GNC, for example. Rite Aid tapped a specialty retailer that is recognized by consumers for its pedigree in dietary supplements, and now that GNC store-within-a-store concept exists in almost 2,000 Rite Aid storefronts today. That partnership continues to be touted as a significant contributor to front-end performance by Rite Aid and a significant growth driver for GNC during each of those company’s respective quarterly conferences.

And now Rite Aid is joining forces with Supervalu’s Save-A-Lot banner, a food-store brand that also has a lot of traction with consumers. And Supervalu has dedicated quite a bit of capital against the rapid expansion of Save-A-Lot outlets — as many as 100 new locations are planned for the company’s current fiscal year. Further, much of that Save-A-Lot expansion is slated for the Southeast, with more than half of this year's stores planned for the Carolinas, Georgia, Alabama, Mississippi and Louisiana, which means Rite Aid’s partnership with Save-A-Lot on these combo stores will benefit from some synergistic marketing.

And the coupling between Rite Aid and Save-A-Lot affords Rite Aid instant credibility in the offering of fresh foods — deli meats, fresh produce, etc. — in a channel better known for stocking strictly snack foods and such grocery items as milk, which fill a fill-in need for shoppers who are in between grocery trips.