Rite Aid Corp. has decided that they are opening discount groceries to some of its stores in South Carolina. Rite Aid is adding “Save-A-Lot” grocery products, which are units of Supervalu Inc. Its stores sell produce, meats, and household goods. Rite Aid thought it was best to add groceries in their South Carolina stores because they are all medium-sized, and also because their pharmacy businesses are solid. Their sales of items, such as beauty products, are not as strong.
On the other hand, Rite Aid’s rival, Walgreen Co. is trying to accomplish the same thing- their stores will start selling fruit and vegetables, soups, sandwiches and salads. They are also thinking about carrying goods such as salad bags and frozen pizza.
Thus, because both companies are testing out a similar strategy, there exists a lot of competition. This makes it difficult for both Rite Aid and Walgreen Co. because not only do they have to re-think their cost on items, but they must also have to come up with different ways to reach out to their customers. This then involves more money for advertising because both companies need to attract customers from all over the state.
I believe that this new emergence of grocery products in the stores is a great way of increasing their profit because food attracts a larger number of buyers. Now, Rite Aid will not only have a pharmacy, but it will provide us with lower-priced foods as well. With this bad economy, I think many customers will want to shop at their stores, for they provides great deals. Competition will be tough, but risk will always be a factor in the industry.
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Posted by Tania Dabdoub
Great job Tania!
ReplyDeleteThank you!
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