2025 has been a bad year for chain pharmacies across the United States. There is a variety of factors affecting their business, and as a result, most of the major chains have been closing locations, especially in areas that may be traditionally underserved.
Rite Aid has long been a major group of stores, especially in the Northeastern part of the United States. But now the one-time pharmacy giant is rapidly closing its stores. The chain recently got the go-ahead to close an additional 114 locations as it slowly disappears.
Rite Aid’s First Bankruptcy Came in 2023
Rite Aid was experiencing plenty of success throughout the 2000s, expanding and opening stores outside of its Pennsylvania headquarters. Things hit a snag in 2023, when the company was forced to declare bankruptcy. This first bankruptcy was caused by several lawsuits related to Rite Aid’s role in the opioid crisis.
Store closures quickly followed this first bankruptcy declaration, with 154 stores being eliminated. The company’s stock went down to 0.13 a share, an all-time low. While Rite Aid looked like it could eventually have to shutter all its stores for good, the company was able to make it through its first filing.
Pharmacies Are Said to Have Played a Part in the Opioid Crisis
According to experts, the United States opioid crisis began in 1999 and has only gotten worse since then, as overdose deaths have skyrocketed. Many people who abused opioids first tried them as legal painkillers that required a prescription.
The 2000s were filled with scams, sometimes involving doctors, in which people used real or fake prescription scripts to score painkillers that could then be sold for major profits. It is alleged that Rite Aid reportedly filled many of these prescriptions without identifying clear red flags.
Rite Aid Faced Multiple Lawsuits Related to the Crisis
Pharmacies of all kinds had fallen victim to prescription drug scams, but it was believed that Rite Aid had filled an inordinate amount of fake scripts. This was especially true in the period between 2014 and 2019. As a result, the company was soon hit with several lawsuits.
Several Rite Aid pharmacists acted as whistleblowers, and the United States Department of Justice filed a complaint against the chain in 2023. Rite Aid paid $30 million in settlements and also settled with the DOJ, paying the department a $7.5 million penalty.
The Second Bankruptcy Was Due to Mounting Debt
While Rite Aid was able to temporarily recover from its first bankruptcy, the company never really got back on its feet. There was mounting debt for the chain, and at the same time, the United States was undergoing a severe retail slump.
These two factors created an environment where Rite Aid couldn’t recover. As part of the second bankruptcy, the chain will be closing a huge number of its stores. The chain will not be going away for good; however, some stores will remain open while others are closed and sold.
Rite Aid Needed Permission to Close These 114 Stores
As the company is going through bankruptcy, it has to request permission to perform certain actions like closing stores. A New Jersey bankruptcy court recently granted Rite Aid the ability to close 114 stores on a permanent basis.
Considering that Rite Aid was originally a Philadelphia-based company, many of the closures will occur in the Northeast. The state of Pennsylvania will close 42 stores, New York will shutter 13, and New Jersey will eliminate 11. The state of California is cutting the second most stores, a total of 27.
Retail Pharmacies Are Having a Terrible Time in General
Over the last few decades, chains like Walgreens, CVS, and Rite Aid have popped up in towns, putting local pharmacies out of business. But due to several factors, all of these retailers are now closing hundreds of locations.
People’s shopping habits have changed over time, with many preferring to shop online if that is an option. And it is becoming an increasingly more common option for many types of pharmaceuticals. It is hard for stores to compete with that sort of convenience.
The Closures Are Also Part of a Market Correction
Just like online pharmacies, Rite Aid, CVS, and Walgreens can dispense medication online. By doing so, they end the need for a storefront and multiple workers to staff that storefront. So some closures, regardless of how the business is going.
Many economists believe retail pharmacies have overexpanded. Many United States towns feature both a local pharmacy and multiple chain pharmacies within a few miles of each other. This has oversaturated a market that simply doesn’t have enough demand to support that many stores. It makes sense for the chains to close stores in areas that are oversaturated.
Rite Aid’s Fall Has Been Dramatic
Founded as Thrift D Discount Center in Scranton, Pennsylvania, in 1962, Rite Aid grew into a massive conglomerate. The 1990s and 2000s were periods of explosive growth for the chain, and at its peak, Rite Aid operated 1,200 stores.
It is a much different story today. At current count, there are only 385 stores left in the United States. As recently as 2022, the chain was expanding into new territories but wasn’t able to survive both the changes in retail habits and the lawsuits related to the opioid crisis.
Conclusion
Rite Aid’s store closures are surely a sign of things to come for not only retail pharmacies but for retail stores in general. The need for actual brick-and-mortar stores is decreasing. You will likely start to only see large-scale retail pharmacies in larger metropolitan areas.
But people in smaller areas may still have access to these stores if they want it, as they all keep a large online presence. But it will be incumbent on all major chains to market themselves to these customers so they remain at the top of their minds.