Wednesday, December 21, 2016

Fred's Becomes America's Third-Largest Pharmacy Chain

For [what I'm planning to be, anyway!] my final post of 2016, I wanted to share some news regarding a company based out of the Mid-South - founded in Coldwater, MS, and currently headquartered in Memphis, specifically. As I'm sure you've heard, Walgreens is currently undergoing an effort to merge with Rite Aid, and as a result of that merger, the FTC will require many stores in overlapping areas to be divested. What you may not have heard is that a deal has been struck with a buyer for those stores – none other than Memphis's own Fred's! The Memphis Business Journal has a nice write-up on the deal here, and here is an article from the Cincinnati Business Journal detailing how Fred's role in the Walgreens-Rite Aid merger will affect (Cincinnati-based) Kroger. Why Kroger? Well, Kroger was reported to be interested in purchasing some of the stores, especially since many will likely be in the northeast (where Kroger currently doesn't have a presence), but ultimately it would've been a bit much for them to take on, given they don't operate under any similar store format. Fred's, on the other hand, is a key player (at least locally – and maybe will grow to be nationally!) in the pharmacy and discount retail markets. In addition to the 865 Rite Aid stores they will operate following the merger (keeping the Rite Aid name under a two-year changeover plan, as well as their employees), Fred's reportedly will also take ownership of any other stores that may need to be divested in the future. Even without the additional stores, this purchase makes Fred's the third-largest drugstore chain in the United States.

As some of my flickr contacts have noted over at my photostream there (where I've cross-posted this information), speculation has abounded since the sale as to whether or not Fred's can survive as a chain following this deal. After all, as recently as last week it was reported that they will be closing some 40 of their stores in the new year, yet this purchase more than doubles their store count. Some are even calling the sale "Haggen II," referring to supermarket Haggen's assumption of the divested stores from the Albertsons-Safeway merger last year. Evidently, Haggen took on more than they could handle and ended up declaring bankruptcy; many of the stores they closed wound up going right back into the hands of Albertsons, giving them a (legal!) monopoly in several places. Walgreens may well have even had this in mind as a strategy when selling the Rite Aid stores to Fred's. In any case, I have to assume Fred's was chosen as the highest bidder more so than as a potential failure, and while I don't doubt they will encounter some struggles with this hefty purchase, I do hope they find the necessary abilities to pull it off. Given that they are a local company, I'd sure like to see them succeed!


Changing subjects... I know many of my most recent posts have been largely focused on news stories or other content that is not my own. I've also almost entirely neglected to mention a major Mid-South retail occurrence over the past few months: the construction of IKEA Memphis, which finally opened its doors to the public just a couple of weeks ago! For January, I hope to have a post covering IKEA's construction, but at a cost - the photos would again not be my own content but that of my flickr friend Memphis Retail. In fact, I'm running slightly low on content/ideas for the blog myself, which is why I tend to push the fact that you can send in your own contributor posts to midsouthretailblog [at] gmail [dot] com. Nevertheless, I do have several posts with new content of my own in the works, and will begin posting those in the new year. As a programming note, however, I would like to mention that I am reducing my 'goal' number of posts per year to 10 from 12 (i.e. skipping two months instead of posting once a month). This is not to say that I won't exceed that number, just building in the excuse for if I don't.

Your continued patronage of the Mid-South Retail Blog is very much appreciated, and I hope my slowdown in posting doesn't turn you away! Thank you for continuing to visit and read for our first full calendar year on the web (!), and I hope you and yours have a happy holiday season and a prosperous 2017 :)

Anyway... that's what's going on with a major Mid-South retail chain. Until next time - next year, in fact! - have fun exploring the retail world wherever you are!

Retail Retell


  1. I'd sure like to see Fred's beat the odds and succeed with this purchase, just so Walgreens can't have the satisfaction of seeing their possible sell-off-to-a-company-that-will-likely-fail strategy work. Anyway, I already rambled on enough about that over on flickr.

    Have a Merry Christmas and Happy New Year, and looking forward to more posts next year!

  2. I for one don't want to see a repeat of Haggens, though I was unaware of that until this news broke. Hopefully Fred's succeeds.


Have any info to share, or simply want to join the discussion? Please feel free to leave a comment! Comments are welcome on any and all posts so long as you adopt a username and do not post any malicious links. Comments are subject to moderation before being approved, so please be patient if your comment does not appear automatically. Please remain civil in your comments. If we decide your comment is inappropriate, we reserve the right to delete it.

Disclaimer: The Mid-South Retail Blog exists solely for educational and historical purposes. This blog claims no ownership of, or relation to, any organization, retail or otherwise, whose property may be featured in pictures or in links within posts. We are not affiliated with, or endorsed by, any entity featured on the blog. However, we do claim ownership of our content, unless it is credited otherwise. If you find any inaccuracies in our posts, please let us know in the comments or via email so that we can make any necessary changes. Information on the blog may be frequently updated without notice.