With Rite Aid's announcement earlier this month that it has acquired RediClinic, it's quite clear that the company, along with larger rivals CVS and Walgreens, sees in-store clinics as an increasingly important element in driving revenues and profits.
RediClinic, which currently operates 30 clinics in Texas, primarily in H-E-B stores, will operate as a wholly owned subsidiary of Rite Aid. The drugstore chain doesn't currently operate stores in Texas, where its presence could raise competitive concerns for H-E-B and other retailers that may be considering adding in-store clinics.
Most importantly, RediClinic will now provide Rite Aid with the means to open clinics in its own stores. While Rite Aid has not opened clinics, it has used NowClinic, a telehealth service that enables customers to speak with a doctor online. One major downside to the program is that it does not accept health insurance.
"Retail clinics play a critical role in today's health care delivery system and will play an important role in Rite Aid's overall health and wellness strategy, said John Standley, chairman and CEO of Rite Aid, in a statement when the deal was announced. "We are committed to working with RediClinic to expand its current footprint in Texas and, in the near future, begin to bring its expertise in delivering convenient healthcare and wellness programs to Rite Aid customers in select Rite Aid markets."
After years struggling under heavy debt and poor sales, Rite Aid has changed its fortunes in recent years through cost-cutting moves, an expansion of its loyalty program and store remodels. The company, which currently operates 4,584 stores, has seen same-store sales and company profits on the rise in recent quarters.
How likely is Rite Aid to succeed with its acquisition of RediClinic?