Rite Aid Makes a Big Change As Pharmacy’s Struggles Continue

Rebounding from a challenging 2021, some retailers performed well in 2022. But struggling stock values were too much for some to continue business as usual.

Covid caused trouble in the retail sector in 2021. After a year when Americans suffered through lockdowns and many remained mostly at home, the reopening in 2022 made it difficult for stores to figure out what inventory was necessary to stock. Increasing costs in both goods and labor, not to mention supply chain challenges, forced retailers of all sizes to confront serious headaches.

Then, the Dow Jones Industrial Average (^DJI)  began 2022 flying high. The blue chip index reached its all-time closing high of 36,799.65 points early in the year, on Jan. 4, 2022. From there, however, the rest of the year was grueling.

Volatility shook stock values all year long, as investors were spooked by fallout from Russia’s invasion of Ukraine, rising inflation and interest rate hikes.

But 2022 was a year when the biggest retailers generally got stronger. Walmart  (WMT) – Get Free Report, Amazon  (AMZN) – Get Free Report, and Target  (TGT) – Get Free Report had the customer reach and buying power to avoid many of the supply-chain issues that plagued smaller rivals. Costco  (COST) – Get Free Report and Dollar General  (DG) – Get Free Report also had strong years, driven by their ability to keep prices in check.

In most cases, though, strength was not reflected in retail sector stock prices as fear of a recession, worries about inflation, and inventory concerns dragged on shares.

Rite Aid Faces a Difficult Challenge

One company, Rite Aid  (RAD) – Get Free Report, encountered difficulties to such a degree that it found it necessary to make a change at CEO.

The drug store chain announced on Jan. 9 that Heyward Donigan, CEO since 2019, is no longer with the company.

Rite Aid named Elizabeth Burr as interim CEO as it searches for a permanent replacement for Donigan.

“As the Company continues its efforts to enhance its competitive position in this dynamic environment, the Board determined and Heyward agreed that now is the right time to identify the next leader of the business,” said Bruce Bodaken, Rite Aid chairman, in a press release. “With a deep understanding of the industry and our strategy, the Board was unanimous in its belief that (Burr) is highly qualified to serve as interim CEO while the Board conducts a search for a permanent successor.”

Rite Aid had been struggling, and has made at least one list of companies at potential bankruptcy risk

What We Know About Elizabeth Burr

Burr was previously a vice president at health insurance company Humana  (HUM) – Get Free Report.

Most recently, at Carrot Inc., she served as president and chief commercial officer. Before that, Burr was global head of business incubation at Citigroup  (C) – Get Free Report. She has also worked for Credit Suisse, eBay  (EBAY) – Get Free Report and Gap  (GPS) – Get Free Report, where she was vice president of global brand management.

“Having served as a Director since 2019, I have great respect for the important role Rite Aid plays as a full-service pharmacy improving health outcomes for millions of Americans,” Burr said in the press release. “I will work with the Board and management team to realize our vast potential while supporting our thousands of pharmacists and team members who are focused every day on meeting the needs of our communities and customers. With Rite Aid’s well-established brand and its committed and talented team, I look forward to delivering on our business strategy and driving value for all our stakeholders.”

Rite Aid reaffirmed its fiscal year 2023 guidance for total revenues between $23.7 billion and $24.0 billion.

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