The Associated Press December 16, 2010, 2:21PM ET

On the Call: Rite Aid discusses new store concept

Rite Aid Corp., the third largest drugstore chain in the U.S., has added grocery sections to 10 stores in South Carolina through a partnership with Supervalu Inc.

CEO John Standley told analysts Thursday during a conference call to discuss quarterly results that sales for the front-end, or non-pharmacy areas, of these stores have doubled on average. Some stores have even seen their front-end sales triple, although margins can be lower thanks in part to products like perishable items. He said the company needs a few more months to understand the economics of the concept.

An analyst asked about its potential.

QUESTION: Do you think this could be a vehicle for getting into more urban markets or having more of an impact in those markets?

RESPONSE: I think it could be. And I think it's real . exciting to take a store that was a low volume store that was doing $20,000 a week on the front end and make it do $60,000 or $70,000. That's a pretty good answer for us, and we have some real estate that fit this demographic very nicely.


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