Placer.ai: Rite Aid could see ‘signficant’ benefits from recent momentum | Invezz
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Jul 1, 2021
The retail sector was among the hardest hit by the COVID-19 pandemic, but one subsection emerged relatively unscathed: pharmacies. According to a report from foot traffic analytics firm Placer.ai, the pharmacy sector is now showing strong growth.
Significant growth in May
The COVID-19 vaccine rollout, coupled with a broader economic reopening, resulted in the pharmaceutical sector showing strong growth in May, Placer.ai’s Ethan Chernofsky wrote in a blog post. Specifically, CVS Health Corp (NYSE: CVS) and Walgreens Boots Alliance Inc (NASDAQ: WBA) each benefited from a 14.1% year-over-year increase in visits.
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Rite Aid Corporation (NYSE: RAD) visits continue to trend negatively compared to 2019. But the company has seen notable improvements from negative 38.2% in January to just over 20% in March, April, and May.
Rite Aid has seen its momentum continue into June as visits were down 18.1% for the week of June 7. Put in perspective, visits were down 41.1% year-over-year in the first two weeks of February. Chernofsky commented:
If the brand can maintain the trajectory as residents and commuters return to cities, the impact could be significant.
Pharmacies are ‘well aligned with hot trends
Pharmacies play a key role in our day-to-day lives given the range of goods they sell. As is often the case, a consumer that picks up medication at a pharmacy must walk to the back of the store to see a pharmacist. This means consumers must spend a few minutes walking through aisles and are likely to see a product they want or need.
While this thesis is nothing new, pharmacies have shifted focus as of late and are now “exceptionally well aligned” with key trends like health and wellness. Granted, the COVID-19 vaccine rollout played a part in the recent momentum, but this could be a one-time catalyst. Chernofsky wrote:
There is also more to be said about the strategies these brands have championed for years, and the long-term benefits they provide. Pharmacy locations are heavily centered around daily routines, and the return of work and school is providing a lift.