Boston, MA 01/31/2014 (wallstreetpr) – Rite Aid Corporation (NYSE:RAD) future has been thrown into shreds amidst CVS Caremaker announcement that that it intends to launch a new Vitamin Centre. The new project will be implemented online intended to encourage customers to buy Vitamins and supplement due to their nutritious value. CVS which is a fierce competitor to Rite Aid has in the past started acquiring a good market size in the market with its site locations growing by 7.7% from 6,923 to 7458 between 2008-2012, the increase in locations has also resulted in its sales increasing over the given time frame.
This is a complete contrast to Rite Aid Corporation (NYSE:RAD) which has seen its count fall 5.7% from 4,901 to 4,623 over the past five years. Sales at Rite Aid have also been tumbling, falling by 3.4% from $26.3 billion to a low of $25.4 billion. In the past five years Rite Aid has been posting net losses almost every year with GNC recording improved sales of 123.1 billion an increase of 40.8% from $87.5 billion. Rite Aid has been paying more attention on cost reduction and management policies while GNC has focused entirely on boosting its growth in sales thus the new venture online.
Rite Aid Corporation (NYSE:RAD) move to cut on costs of operation by closing unprofitable ventures has resulted in its profit margin dropping from highs of 3.8% to lows of 3.1%. A dismal performance in the quarters has caused Rite Aid to be trimmed to a neutral mark in the markets. 2013 was Rite Aid year in the market with its stocks soaring by up to 3 times this leaves a lot to be desired in terms of sustainability and stability in the coming months amidst increased competition from GNC. Their needs to be a change in strategy on the way the company operates if it is hold on to its grip in the market
