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Countless Rite Aid customers and employees are still waiting to learn the fate of their local pharmacies as the bankrupt drugstore chain sells off its assets and winds down operations. Now, at least three Rite Aid landlords are asking for more transparency into the process. Last week, Rite Aid announced that it has reached agreements to sell its prescription files for most of its 1,200 retail pharmacies, with successful bidders including CVS, Walgreens, and Albertsons, among others. Perhaps most notably, CVS agreed to buy prescription files for 625 of those pharmacies, even as it said it would only take over 64 physical Rite Aid locations in three states: Washington, Oregon, and Idaho. However, neither Rite Aid nor CVS has said which pharmacy locations were involved in the bid. Now three landlordsHVP2 LLC, New Hartford Holdings LLC, and Gallashea Properties LLChave filed a limited objection to the asset sales on the grounds that they have no idea if their own leases were included, according to a court filing earlier this week. “Conspicuously absent from the notice is any particular and critical information regarding who bought what and for how much?” the filing states. Privacy concerns as prescription data changes hands The landlords say they are not seeking the disclosure of sensitive customer data, which carries special privacy and regulatory considerations when prescription files are transferred from one company to another. Rather, they just want to know which Rite Aid locations were successfully bid upon, saying a more transparent process might allow them to secure better deals for their leases. Reached for comment by Fast Company, a spokesperson for CVS said store specific information has not yet been released but offered no timeline for when that might happenother than to say more details will be released following a hearing on the sale. The company did not respond to a question about the landlords’ objection. “Were working closely with Rite Aid on plans to ensure that the transition will be seamless for patients and customers and access to pharmacy care is not interrupted,” the spokesperson said. CVS is already the country’s largest pharmacy chain, with its pharmacy unit generating $124.5 billion in revenue and filling 1.7 billion prescriptions last year. A Rite Aid spokesperson told Fast Company that the sale of its assets to CVS and other pharmacies “will be implemented on a rolling basis and will take some time.” The spokesperson emphasized that Rite Aid pharmacies will remain open during this process, but court documents show the company is already planning to close more than 200 locations, as Fast Company previously reported. Plenty of anxiety to go around All Rite Aid locations will eventually either close or be sold to other companies. An auction for the bankrupt company’s remaining assets is planned for June. In the meantime, landlords aren’t the only one impacted by the uncertainty. On Reddit and other online forums, Rite Aid employees have expressed no shortage of frustration about not knowing the fate of their local stores. The CVS spokesperson told Fast Company that once the sale is finalized, “we look forward to welcoming Rite Aid colleagues who are interested in applying to join the CVS team.” For their part, the landlords have asked as part of their objection that Rite Aid disclose the “specific identities” of companies that successfully bid on its assets, along with which specific assets they won and how much they paid. Fast Company has reached out to the landlords’ lawyer for an update. The sale of Rite Aid’s assets is still subject to court approval, with a hearing scheduled for today.
Category:
E-Commerce
Sales at Target fell more than expected in the first quarter and the retailer warned they will slip for all of 2025 year as its customers, worried over the impact of tariffs and the economy, pull back on spending.Target also said that customer boycotts have also done some damage. The company scaled back many diversity, equity and inclusion initiatives in January after they came under attack by conservative activists and the White House. Target’s retreat created another backlash, with more customers angered by the retailer’s reduction of LGBTQ+-themed merchandise for Pride Month in June of 2023.Shares fell more than 4% before the opening bell Wednesday.Sales fell 2.8% to $23.85 billion in the quarter, and that was short of the $24.23 billion Wall Street expected, according to FactSet. Sales are also down from the $24.53 billion the company reported during the same period last year.Target said Wednesday that it now expects a low-single digit decline in sales for 2025, and earnings per share, which excludes the gains from the litigation settlements in the first quarter, to be anywhere from $7 to $9.For the year, analysts expect earnings per share of $8.34 on sales of $106.7 billion.Comparable store sales, those from established stores and online channels, fell 3.8%. That includes a 5.7% drop in store sales and a 4.7% increase in online sales. That reverses a comparable store sales increase of 1.5% in the previous quarter.The number of transactions across online and physical stores fell 2.4%, and the average ticket dropped 1.4%. Target said Tuesday that it couldn’t reliably estimate the individual impact of each of the factors that were hurting its business.Target is setting up a new office to be led by Chief Operating Officer Michael Fiddelke would focus on making faster decisions to help accelerate sales growth. Current Chief Strategy and Growth Officer Christina Hennington will move into a strategic adviser role.Target is also intensifying efforts to entice customers who are nervous about the economy and inflation. The retailer says it is offering 10,000 new items starting at $1with the majority under $20.“I want to be clear,” Target CEO Brian Cornell told reporters on a call Tuesday. “We’re not satisfied with these results, so we’re moving with urgency to navigate through this period of volatility . . . We’ve got to drive traffic back into our stores or visits to our site.”Out of 35 merchandise categories including discretionary and essentials that the company tracks, it’s gaining or maintaining market share in only 15, the company said.Target rival Walmart reported strong quarterly sales last week. The nation’s largest retailer said it’s already raised prices on some items due to tariffs and that more price hikes are on the way this summer when the back-to-school shopping season goes into high gear. For example, car seats made in China that currently sell for $350 at Walmart will likely cost customers another $100, executives said.Target didn’t offer specifics on tariffs’ impact on prices, but said that it was looking at different ways to offset those costs.“We look at competition,” Cornell told reporters. “We make adjustments literally each and every week, so we’re constantly adjusting pricing. Some are going up. Some will be reduced.”President Donald Trump’s threatened 145% import taxes on Chinese goods were reduced to 30% in a deal announced May 12, with some of the higher tariffs on pause for 90 days.Yet Americans were already pulling back on spending as they grow increasingly uneasy over the state of the U.S. economy. Companies including toy manufacturer Mattel, toolmaker Stanley Black & Decker and consumer products giant Procter & Gamble have announced higher prices or plans to raise prices because of the trade war kicked of by the U.S.Walmart was able to dodge some of the tariff damage other retailers are suffering because groceries account for about 60% of its U.S. business. Target is more reliant on discretionary items like clothing and accessories, with less than a quarter of its sales coming from groceries.Target has reduced the number of its store-label products sourced from China to 30% now from 60% in 2017. The company is on its way to reducing that number to 25% by the end of next year, the company said. Target is shifting sourcing to Guatemala and Honduras and is looking to sourcing in the U.S.Target is being pressured on other fronts as well.The company in January said it would phase out a handful of DEI initiatives, including a program designed to help Black employees advance their careers and promote Black-owned businesses. Conservative activists and President Donald Trump have sought to dismantle DEI policies in the federal government, schools, and at private businesses.The pastor of a Georgia megachurch who led a nationwide 40-day boycott of Target stores in response called last month for a continuation of that effort.The Rev. Jamal Bryant is seeking a reinvigorated commitment from Target on diversity, and he wants more support from Target for Black-owned banks and businesses.Target earned $1.04 billion, or $2.27 per share, for the period ended May 3. That compares with $942 million, or $2.03 per share, in the year-ago period.Target operates nearly 2,000 stores nationwide and employs more than 400,000 people. Anne D’Innocenzio, AP Business Writer
Category:
E-Commerce
Google has built a massive business selling ads that appear around search results: In its 2024 10-K filing with the Securities and Exchange Commission, the company reported roughly $198 billion under Google Search & Other, its largest profit segment and more than half of its parent company Alphabets total revenue. But search is undergoing a foundational shift toward accessing the webs information with the help of powerful AI models, and nobody has yet found a winning model for placing ads around AI search results. At the same time, new generative AI models can now handle much of the cognitive efforts users typically expend to arrive at their intended web contentand theyre doing it faster. This shift was evident in the search products and features that Google unveiled at this weeks I/O developer event, many of which are powered by this very reasoning capability. Fast Company spoke to Liz Reid, Googles head of search, and Nick Fox, SVP of knowledge and information product, about how the company is navigating this seismic shift. This interview has been edited for length and clarity. How are you thinking about where search is heading? Nick Fox: What [AI] means for search is probably the biggest shift in search ever. We’re talking about a shift from basic information retrieval to intelligence. These models enable a much deeper understanding of information [and] the ability to transform information. If we rewind a year, some of this was just theory. Liz Reid: One of the exciting things with AI Mode is that while it’s our cutting-edge AI search, it also provides a glimpse of what we think can be more broadly available. Our current belief is that we will take the things that work well in AI Mode and bring them right to the core of search and AI Overviews. We’ve started doing this with technology like query fan-out [in which the AI calls for a number of sources for information related to the users search], so you can just ask whatever question you have right in the search box. When we think about the future of search, we consider a few different areas: AI could be the most powerful engine for discovery because the ability for you to specify what you want means we can connect you to that really interesting niche page or artist that has something different to say that you’re interested in. We think it can end up transforming the web and people’s ability to connect. LLM technology allows multimodality both in inputs and in outputs. Humans speak in different waysconversationally, looking at images, seeing things before us. This is how we like to talk, describe our needs, and understand. AI allows you to say how you would really like to consume this information and makes that possible. What does the introduction of reason agents mean for search? LR: [Google] has been thinking about agentic work for a while [but] oftentimes that’s been confined by API integrations. The goal is to make search gather information, pull it together, and make it easy for you to take action on your information needs. This will be really exciting. We’re starting with bringing a lot of the Project Mariner (AI agent) technologies into search. This was something that was once easy to talk about, but now it feels like it’s actually going to be possible. This is related to the new reasoning aspect of LLMs and the tool calling ability to do tasks as opposed to just searching for a static piece of information. Thinking about traditional search with the 10 blue links, my brain was doing the work to figure out which link to click and to process all the information. It seems like with the new AI approach, AI is doing some of that mental work for me. NF: While a lot of the narrative out there is “AI or the web, we don’t view it as AI or the web, but rather the two of those really in concert together, building a holistic experience. A big part of that is exactly what you said, which is AI can help contextualize the web. AI can help organize, contextualize, and bring some of the simpler parts, and then you’re going to go deeper, often in a web page. Robby Stein, VP of search products, mentioned giving AI Mode permission to look into search history, Gmail, and other Google services to personalize search results. What are the privacy concerns about accessing that kind of data? LR: A key part of this is that it is genuinely an opt-in thing; we really want people to actively decide that they want to do it. We’re really starting with business messaging and recommendations. It’s not about personalizing something like a health response based on email content, but using information like the type of brands you like to shop for to make shopping queries easier, or the type of restaurants you order takeout from to recommend places in a new country. We’re going to start in Labs (for experimental products) to see what the feedback is and focus on recommendation spaces where there’s an overwhelming number of choices and it can be hard to express what you want, to specify your taste. NF: My own usage has been super useful for recommendations, especially restaurant recommendations based on OpenTable confirmations in Gmail. Search understands some of this already, but the notion of which restaurant I actually liked is a particularly useful piece of information. LR: Our UX research shows people have very different views. Some people really don’t want it, which supports the opt-in. But a lot of younger users actually expect apps to be very personalized, and they assume we’re already doing a lot of personalization in search. For some users, we’re not meeting their expectations in that space, and we should do more. Others may just never want it, and that’s fine. It’s like you have to get a sense of the zeitgeist around privacy expectations, and it’s a generational thing. I always think of it in a transactional way: I would be happy to expose my information if the return was obvious, and if you earn and keep my trust, and don’t start doing something with my data that I didn’t know you were going to do. NF: Yes, the user value of it has to be really high. We believe it can be and will be, but this is what we’ll learn with our users. It must be rooted in whether there is truly compelling user value by getting highly personalized, highly relevant recommendations for the things people are really looking for. You built this huge business on showing search ads to people, and now we’re talking about this foundational shift in the way we’re doing search. Has your thinking around how you’re going to monetize AI search evolved as you’ve learned more about what it is and how people use it? LR: We still see that a critical class of information is commercial information, where people are still often making [product] choices. So there’s still a large opportunity for ads. AI is expanding what’s possible. People are asking more queries, sometimes more specific queries. They’re telling more about what the intent is, which allows us to do more useful ads; you’re not just guessing, you can get more explicit. That is a real opportunity [for Google] from a buiness perspective, with more various opportunities. It’s also really important for [businesses] that there are these opportunities for ads. If you’re a small merchant, often the only way you have a chance to break out is with ads. Otherwise, you just cement the brands everybody knows. That is how new brands come in and new merchants stand out, advertising to people looking for something they don’t know by name. If people get more specific about what they want, it gives more space for small merchants to show up and meet niche needs. NF: What I’d add is the hallmark of our approach to advertising and search has been showing ads when they’re relevant and highly useful for the user, and showing very few or no ads when they aren’t relevant or the query wouldn’t benefit. I’m looking for a Mother’s Day present or gift ideas, which can be tricky. Having an AI response that gives ideas, and then ads that provide specific places to go buy them, is highly useful. Because we have a baseline understanding of how to monetize and thoughtfully display ads or not display ads on a search results page, it gives us the ability to get this right and what the user is looking for while also creating the opportunity for advertisers and driving the business forward. Have you been talking to brands? Are they looking at this new mode of discovery and thinking about what they need to be doing to optimize for visibility and searchability in AI search? NF: The ecosystem is figuring it out; we’re all figuring this out together. Historically, it’s all been about clickssomeone searches, do I get a click? That’s going to continue to be important for conversions. But there’s an additional piece: Brands themselves want visibility in that experience even if they’re not the place the user is going to go to buy. There’s value to the impression or the mention, which is something search hasn’t focused on as much historically. This is something we’re going to be talking to advertisers and businesses about. Its interesting that the total number of searches is increasing with the introduction of AI search. NF: Theres been this narrative out there that the web is dying for 25 years or something. Whats interesting is that if you actually look at the data, the web is thriving. We were looking at data recently, and Google’s crawler, which crawls a lot of the web, is seeing way more content than ever before. Our crawlers are seeing 45% more content this yearin April versus April two years ago. More content is being created, more domains are being registered, and third-party data shows visits to the web increasing over time. Liz talked about AI being an engine of discovery; discovery also leads to creation. Google is an optimistic company that cares a lot about the web. We truly believe this will be an expansionary moment for the internet and the web, and the data seems to indicate this reality. Maybe you’re just making it a little bit more fun to search, more fun to shop. LR: It’s certainly the case that if you reduce the drudgery and the effort, people search more. People have limited time, and if it’s just easier to do, if it feels like a joy and you don’t have to do the hard parts but get to do the fun parts, then people will do it more often. We’ve seen this repeatedly, from the web overall to images, Lens, and AI Overviews. Lower the difficulty, make it more enjoyable with the response you get, and then people just do more of it because it’s worth their time.
Category:
E-Commerce
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