Loading ...Severe Budget Crunch Causes Worker Firing
January 4th, 2008Here’s the story, from CNN…
Rite Aid Corp., the nation’s third-largest drugstore chain, said Friday it will close 28 unprofitable stores in the Las Vegas area to focus on its core markets.
Some of the stores were previously part of the Thrifty PayLess chain that Rite Aid acquired in 1997. The company has not opened a new store in Las Vegas since 1999.
‘It’s been part of our long-term strategy … to focus our growth on key strategic markets,’ Rite Aid spokeswoman Karen Rugen said. ‘Las Vegas isn’t one of them.’
Friday’s announcement came two weeks after the company reported greater third-quarter losses — citing slower holiday shopping and a sluggish start to the cough, cold and flu season — and lowered its 2008 profit outlook for the second time in 2007.
The story doesn’t say how many Nevadans will become unemployed… meanwhile, despite “budget shortfalls,” governments in Nevada continue to add employees.
Too bad Rite Aid isn’t a government outfit. We’d just raise prices and give everybody a raise.
January 5th, 2008 at 5:53 pm
…and the rest of the story? Oh, Rite Aid (RA) just spent $2.36b, that’s ‘b’ for billion, to buy the Brooks and Eckerd drugstore chain. They are now the largest drug store chain on the East coast. The DOJ, FTC and several attorneys general required RA to sell 26 stores in the New England area due do antitrust issues.
From RA’s October 25, 2007 S-4 filing with the SEC, “Our goal is to open or relocate approximately 800 to 1,000
stores over the next five years”.
So, too bad it wasn’t a government outfit. Prices may stay the same; many more people will be employed in building and operating these stores; more property tax in those communities where 800-1,000 new stores are going; and oh, the stockholders will make money to boot.
As for a bad 3Q, I offer the following from RA 8-K filing, Decemeber 17, 2007, with the SEC; “Revenues for the 13-week third quarter were $6.52 billion versus revenues of
$4.32 billion in the prior year third quarter. Revenues increased 51.0 percent.”
January 5th, 2008 at 6:29 pm
I’ve got a business degree and CPA and I can’t figure out the significance of Mark D’s comment… anybody else?
Rite Aid’s departure from Las Vegas means they no longer believe they can get their best possible return for deploying their capital here. The specific symptom is that they are not achieving their profitability goals: expenses are too high or revenue is too low.
When that happens to government, far too many people passionately advocate that we increase both.
January 6th, 2008 at 10:29 pm
Bob, you being a CPA is not enough.
You need to be a CGB (Certified Government Believer).
I am a CGB so I will help explain to you what Mark is saying.
Mark says, “So, too bad it wasn’t a government outfit….”
and he says “Prices may stay the same;”
Government can fix prices/cost by rationing the product. During the 1970’s, the Federal government fixed the price of oil which resulted in long lines at gas pumps. It was a smashing success.
and he says, “many more people will be employed in building and operating these stores;”
The silly constraint of turning a profit is done away with. In the CGB world, a dip in demand is not a problem. For example, there are fewer students attending the university system. To layoff university employees would be a violation of one of key principles of the CGBP (Certified Government Believer Principles).
and he says, “more property tax in those communities where 800-1,000 new stores are going;”
A government run pharmacy would not pay any taxes. But all the employees that it hires and does not need (see above paragraph) will be paying taxes. Duh…you CPA…now do understand the principles of the CGB?
and he says, “and oh, the stockholders will make money to boot.”
This statement is the most accurate for us CGB’s. The stockholders are politicians, bureaucrats and those big bad pharmaceutical companies. Somebody has to make the drugs. The big bad pharmaceutical companies will love to lose the market risk and gain monopoly status to make all the drugs. Pharmaceutical companies would never have to worry about losing money ever again.
The politicians will make money by making deals with these companies.
The thousands of bureaucrats to administer the program will enjoy the lush benefits that all government jobs provide. The top bureaucrats will also get some of that special deal money.
To become a CGB, you need pass the CGBP boards test and be a member of a government employee union for 2 years.
January 7th, 2008 at 12:56 pm
“Rite Aid’s departure from Las Vegas means they no longer believe they can get their best possible return for deploying their capital here. The specific symptom is that they are not achieving their profitability goals: expenses are too high or revenue is too low.
When that happens to government, far too many people passionately advocate that we increase both.” That is all you had to say in the first place; why didn’t you? Government can’t hire more people than they can pay for, can they? And they can’t raise taxes unless the legislature approves same, so, government is living wihtin its means and is expanding its business model.
Unfortunately we have expenses too high and revenue too low and no one bothers to correct one or the other.
January 11th, 2008 at 10:43 pm
Maybe Ruffles can head over to Rite Aid after his term here.
“Too bad Rite Aid isn’t a government outfit. We’d just raise prices and give everybody a raise.” (ROFL!)
January 12th, 2008 at 7:10 am
Rite Aid can’t compete with Walmart and Cosco pricing on
prescription drugs.
January 15th, 2008 at 3:23 pm
Cutbacks? Loss of Jobs? The conmy is simple.
The ECONOMY needs money.
I can solve the economy problem and am wondering why no one else sees it as simple as I do.
This country needs a new market one that the US is very good at.
Well, what products do Americans export the most? I am not an expert but I see Coke Budweiser and Tobacco everywhere around the world.
We sell chemical mood enhancers around the world at superior product quality and for cheaper cost than anyone else in the world. We need to tap into the new market that marajuana could offer our farmers and this country.
We need a president that will step outside the box take a stand and recognize this opportunity to bring the US back to a top exporter, create jobs, help farmers and reinvigorate the economy.
There is a demand for this product. A product that is safer than alcohol and all natural with little need for addities or preservatives. You can grow it again and again fairly quickly like tobacco.
We sell caffiene, nicotine and alcohol all which have pluses and minuses, marajuana has them too and we have the best farmland in the world. We could be the top suppliers in the world on a global scale.
Imagine the possibilities if the tobacco industry got involved and started this market.
This country would be out of recession and a huge boost to the economy would occur and desperately needed jobs would be instantly created.
Guaranteed.
What are the reasons that these politicians deny this market that we could tap into?
We would have such a boost to the econmy we could fund universal healthcare like they have in every other civilized country.
This country was founded by people with a pioneering spirit. We need a pioneering president to break new ground open new markets and rejuvenate this country and get us to love it and believe in it once again.
Strengthing the home and heartland especially USA farmers would make this country strong.
January 18th, 2008 at 2:19 pm
Yes, it is Walmart and Costco for drop-in prescriptions, as well as the competition in most of the food stores…. But the real reason is that HMOs and Medigap Insurance Companies are using Wal-Mart for prescriptions…. Vegas is not a big market for older people like the Right Coast is…. In Reno, Right Aid stores were bought by Longs Drugs and not closed…..