Albertsons Scoops up Rite Aid

On Feb. 20, food giant Albertsons announced plans to acquire the remaining Rite Aid stores not included in the watered-down Walgreens-Rite Aid deal of last year. Under Amazon’s threat to rule the consumer goods and healthcare kingdom, the Albertsons-Rite Aid deal is nothing short of a strategic move to improve sales of prescription drugs, spur growth in Rite Aid’s PBM EnvisionRxOptions, and expand consumer access to health products including Albertsons’ billion-dollar private-label brands such as O Organics and Lucerne. Consumers can expect to see increased healthcare services and products as Albertsons redefines its role as a health-oriented grocery store.

Historically, retail clinics have occupied corners of drugstores such as Walgreens and CVS/pharmacy. Cue the bitesize menu, a list of services proportional to the store’s physical capacity. Generally, urine tests typically collected in patient-designated bathrooms are out, as are sophisticated laboratory tests that require large refrigerator real estate (move over, vaccines).

The allure of clinics in grocery stores such as Albertsons, therefore, is the larger size that allows, quite literally, wiggle room for new services. In 2016, in a move that preceded Walgreens’ 2017 partnership with LabCorp in Colorado, North Carolina, and Illinois, Albertsons’ subsidiary Safeway saw the arrival of Quest Diagnostics Patient Service Centers in 12 markets in California, Colorado, Texas, Virginia, and Maryland. These service centers, adjacent to the in-store pharmacies, feature a patient waiting room and dedicated restroom for laboratory services.

For smaller stores such as Walgreens and CVS/pharmacy, dedicating a portion of an already limited space to a waiting room or separate bathroom means compromising valuable shelf space for products. Time will tell whether the Walgreens-LabCorp foray is sustainable and replicable or if stores like Albertsons will take the upper hand.

In the meantime, we can expect Albertsons to get creative with its RediClinic service lists or partnerships with providers. We could see the arrival of nutrition services (copying competitor Kroger’s The Little Clinic) and dedicated optical and hearing centers (which are duplicating across Walgreens and CVS Health stores). Albertsons is likely to tap Rite Aid’s population health management company, Health Dialog Services Corp., to improve foot traffic to Albertsons in-store RediClinics for routine or preventive care.

The broad footprint of the Albertsons-Rite Aid combination across 38 states and Washington, D.C., also promises easy diversification of healthcare services tailored to individual market dynamics, just like we’ve seen Walgreens offer pilot HIV testing services in particularly impacted markets such as Atlanta.

Ultimately, while the CVS Health-Aetna deal would likely drive up CVS/minuteclinic traffic based on payer incentives to use the low-cost clinics, the Albertsons-Rite Aid deal could drive clinic use based on services and strategic in-store positioning alone. New consumer-oriented products and services are likely to follow as Albertsons tests the waters of its expanded capabilities alongside CVS Health and Walgreens, which are each pursuing innovative consumer-as-patient strategies (Walgreens is not only outsourcing clinics but also teaming up with MedExpress to open adjacent urgent-care centers). Kroger’s The Little Clinic will remain a strong competitor, too, and may be prompted by the Albertsons deal to seek new partners and new patient care horizons.

Follow @mlavoneDRG on Twitter for #retailclinic and #convenientcare updates

The post Albertsons Scoops up Rite Aid appeared first on DRG.

Albertsons Scoops up Rite Aid posted first on http://rehabitation.blogspot.com