Rite Aid confirms exit from Michigan market with recent store closures

The closure of the last Rite Aid stores is officially planned due to new bankruptcy documents.

On August 2, 5 and 9, letters of intent to close 38 stores in Michigan were filed, completing the final list of Rite Aids stores in Michigan.

“All stores in Michigan have been placed on the list,” a Rite Aid spokesperson told Bridge Michigan in a brief email on Wednesday.

She did not answer questions about the timing or benefits for recently unemployed employees.

However, employees were hardly surprised by the confirmation from Rite Aid’s headquarters, says John Cakmakci, chairman of Local 951 of the United Food and Commercial Workers.

As Bridge previously reported, employees were told weeks ago that all stores in Michigan would have to close. The UFCW local union represented about 850 Rite Aid employees at about 85 stores in West Michigan.

With the job market desperate for workers, including in the pharmacy, Rite Aid employees have been able to find work elsewhere, Cakmakci said:

“For those who want to continue working, it is easy to find a job in the labor market.”

Pharmacies in a “state of contraction”

But ongoing restructuring efforts within the chain mean fewer options for Michigan residents as they face the closure of competitor stores.

Walgreens has also announced plans to close an unknown but “significant” number of its stores, and a Bridge review of lists of CVS stores in Michigan between 2020 and 2024 found that more than four dozen have closed.

The market “is in a state of massive contraction, and that contraction is accelerating,” Eric Roath, director of government affairs for the Michigan Pharmacists Association, told Bridge on Wednesday.

Online or mail-order pharmacies might work for healthy Michiganders or people with simpler, more stable health conditions, but they fall short for older citizens and people with more complex medical conditions, Roath says.

“Some patients need a better service than mail order and online solutions usually provide. When a patient goes to a pharmacy, they essentially get medical advice without having to pay a co-payment,” he said.

At least 17 Michigan cities have lost three or more Rite Aid stores since October, according to a Bridge review of court records. With the final list of closures, Detroit will have lost eight stores, followed by Flint with six stores, and Lansing and Saginaw with five stores each.

Pharmacies also offer vaccines and tests for diseases such as flu and COVID.

But both pharmacy chains and independent pharmacists have struggled in recent years with declining reimbursements and service providers keeping more and more of the revenue, Roath says.

Others blame a saturated market in which competing pharmacies are located just blocks away from each other or even across the street.

A long history

Rite Aid, founded more than 60 years ago in Scranton, Pennsylvania, filed for bankruptcy in October and quickly began shedding low-revenue stores – more than 500 in total, according to Bridge’s investigation and another analysis.

For several months, more than a dozen states suffered closures of stores identified in court documents as at-risk, including California and other West Coast states, New York and surrounding states, and Pennsylvania.

But by mid-June, Rite Aid had already shifted its liquidation efforts to Ohio and Michigan. Court documents filed since then focused the closure efforts on stores in Ohio and Michigan, with few exceptions.

In total, at least 230 Rite Aid stores in Michigan will be closed in less than a year, according to a Bridge review of bankruptcy court records.

As part of a deal approved in the summer, the chain will reduce its debt by two billion dollars and emerge from bankruptcy with around 1,300 stores, according to several media reports.

As of Tuesday, the chain’s website listed 170 stores in Michigan, down 14 from two weeks ago. Many of the remaining stores have posted “Store Closing” signs on their exteriors.

A statement from Rite Aid to Bridge last month highlighted the chain’s struggles to survive, even as news reports and a Bridge interview with union leader Cakmakci suggested all Michigan stores would close.

“While we have had to make difficult business decisions over the past few months to improve our business and optimize our retail presence, we are committed to becoming financially and operationally healthy,” the statement said at the time.

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