Being an urban pioneer is paying off for Rite Aid Corp.
The nation’s third-largest drugstore company, which has been cautiously expanding with 25 new or relocated stores a year, made a bold move last May by opening a 17,000-square-foot store in downtown L.A.’s financial core.
For some it seemed to be a gamble. But the store located adjacent to Macy’s Plaza, which is undergoing a major renovation has become one of the chain’s top-producing stores. While the company does not publicly disclose individual store financials, it did confirm that sales have surpassed projections.
“The store is doing extremely well and is ahead of our plan,” said Sarah Datz, a Rite Aid spokeswoman at the company’s headquarters in Camp Hill, Pa. “(Downtown L.A.) is in an underserved market.”
Downtown has been an area where few mainstream national retailers have ventured. Though the number of high-rise condominiums and apartments continues to grow, besides Rite Aid there are no big name-brand drugstores or supermarkets in the area. Residents often drive to South Pasadena to do their shopping for groceries and drugstore items.
Rite Aid’s quick success bodes well for Ralphs Grocery Co., which is looking to open a supermarket close to Rite Aid’s store.
“We’re finding all kinds of surprises in the downtown retail business,” said Irving Bonios, senior vice president at NIA Capital Commercial, a real estate brokerage that has been helping Ralphs search for a downtown site.
Downtown advocates say the return of basic stores to the area is overdue, with $2 billion in major projects like Disney Concert Hall and Cathedral of Our Lady of the Angels expected to come on line in the next two years, along with nearly 3,500 residential lofts.
Looking to further its success, Rite Aid is eyeing other underserved neighborhoods around downtown. The company, which over the past two fiscal years has posted a combined net loss of $2.7 billion, opened another large store two weeks ago in a Westlake District shopping center, on Wilshire Boulevard at Union Avenue.
