Hoping to connect more consumers with pharmacies, Rite Aid is piloting small-format stores to serve pharmacy deserts. Late last year, the retailer opened two of the prototypes in the rural Virginia towns of Craigsville and Greensville, and it plans to open a third — in Scottsville, Virginia — as early as March. Each of the three towns has fewer than 1,500 residents and is miles from another pharmacy. The nearest pharmacy to Craigsville, for example, was 20 miles away before Rite Aid set up shop. The drugstore operator plans to add a fourth small-format store over the next several months, as well, but has yet to determine where, a spokesperson said.

“With these new, smaller-format locations, we are bringing critical pharmacy services to underserved communities,” Rite Aid chief retail officer Andre Persaud said.

At around 3,000 square feet, the new format is as much as 75% smaller than Rite Aid’s standard locations, and each will feature a full-service pharmacy, as well as other health and wellness products. A full-time pharmacist and technician staff each of the two new stores, and a third technician shuttles between them. The stores occupy existing spaces in strip centers or on pad sites and don’t necessarily require drive-thrus.

The smaller formats play a role in improving the customers’ adherence to prescriptions. As part of a Rite Aid growth initiative, the retailer has enrolled 1.2 million customers in its courtesy refill program, according to the company. Rite Aid also cites recent research in the Journal of the American Pharmacists Association that reports that one in 10 Americans live more than 5 miles from the nearest pharmacy. Rite Aid pointed to other research that indicates interaction with pharmacists can improve medication adherence, which in turn can improve health outcomes.

Ultimately, underutilization of medication drove more than $500 billion a year in avoidable medical costs, or about 16% of U.S. health care expenditures in the U.S. in 2016, Rite Aid said, referring to a study in the National Library of Medicine. Last, the drugstore cited the Rural Policy Research Institute, which found that in rural U.S. counties without a pharmacy, a higher proportion of the population is considered vulnerable: elderly, uninsured, unemployed or impoverished.

“Pharmacists play a critical role in healthcare, [such as] providing education, counseling, screening for interactions between medications, encouraging prescription adherence and offering important preventative care like immunizations and health screenings,” Persaud said. “As a modern pharmacy, Rite Aid is committed to improving access and convenience to these important services and fostering relationships between community members and their local pharmacist.”

In 2019, Walgreens launched a similar pilot program, opening 30 slimmed-down stores in small towns as well as large cities across the Southeast, Midwest, Northeast and Mid-Atlantic. A newly developed small-format Walgreens in St. Paul, Virginia, is listed on Crexi for $2 million at a 5.4% cap rate, and one in Hagerstown, Maryland, is listed for $2.3 million at a 5.25% cap rate. Each has a 10-year lease with the pharmacy.