Retail expert Neil Saunders, of GlobalData, said: “The second bankruptcy of Rite Aid comes as no real surprise. The first bankruptcy did little to resolve the chain’s issues, and it has been teetering on the edge of survival for quite some time.”
According to Saunders, the business currently lacks the financial firepower to trade on a normal basis. Rite Aid is struggling to secure enough inventory to keep shelves stocked—an issue that deters customers, reduces sales, and squeezes cash flow. “Sadly, the chain has now reached the bottom of this vicious cycle and bankruptcy is the only route available to it,” he added.
The entire pharmacy sector is in the midst of a significant upheaval. Walgreens recently agreed to go private in a leveraged buyout led by Sycamore Partners, underscoring how even the biggest names are seeking new lifelines in the face of industry turmoil.
Rite Aid’s fall is tied to a series of compounding challenges. Drugstores in general are struggling to remain relevant amid fierce competition from big-box retailers and digital giants like Amazon, which launched its online-only pharmacy in 2020. With lower prices and greater convenience, these rivals have steadily eroded foot traffic to traditional drugstores.
Additionally, Rite Aid has been burdened by multiple lawsuits alleging the overprescription of opioids. The legal and financial toll from these cases has added immense pressure, pushing the company further toward insolvency.