ECRM Market Matchup: Rite Aid vs. Walgreens Atlanta, GA · • Marketing Strategies. ... Metrics like these help you understand the design and strategy behind retailer’s ... Haagen-Dazs

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ECRM Market Matchup:

Rite Aid vs. Walgreens

Atlanta, GA

ECRM’s promotional analytics & reporting provides the most comprehensive information needed to increase profits, predict competitive trends and make better decisions.



INDEX:

• Executive Summary

• Methodology & Definitions

• Who Is ECRM/What Do We Do

• Matchup Overview and Circular Design

• Advertised Pricing Trends

• Product Mix Comparison

• Marketing Strategies



METHODOLOGY & DEFINITIONS:

Feature Ad Block Count: Feature Ad count gives credit to every unique product in an ad block.

Each instance of a product promotion in an ad block assigns a Feature Ad Count of 1 for that product.

Effective Ad Count: This measure gives shares credit for an ad block among all products

included. If 4 products share an ad block each receives a 0.25 count for that particular promotion.

Percent of Space: We measure and aggregate the percent of physical space each brand

receives in a particular channel of trade or even at a specific retail chain.

Time Periods:

• Prior Year: 4/1/2012 – 3/30/2013• Current Year: 3/31/2013 – 3/29/2014



Overview and Circular Design:

• Market OverviewBuild an understanding of ATLANTA, with a

focus on the competitive environment and

demographics.

• Circular DesignGain a birds eye view of the style of

circulars Walgreens and Rite Aid release, in

terms of metrics including page count,

frequency, price transparency, and ad

count.



Metric Atlanta United States

Population 920,583 308,747,508

Pop/Square Mile 1,748.0 87.4

Female Population 51.2% 50.8%

Median Family Income $57,664 $52,762

Per Capita Income $37,238 $27,915

Retail Sales per Capita $13,363 $12,990

Poverty Rate 16.8% 14.3%

ATLANTA MARKET OVERVIEWMetrics for Atlanta, 2008-2012



ATLANTA MARKET OVERVIEWMetrics for Atlanta, 2008-2012

White

63.0%

Black

13.1%

Hispanic

2.0%

Asian

5.1%

Multi-

Racial or

Other

16.8%

United States

White

47.0%

Black

44.6%

Hispanic

0.8%

Asian

6.0%

Multi-

Racial or

Other

1.6%

Atlanta



COMPARING CIRCULAR DESIGNMetrics like these help you understand the design and strategy behind retailer’s

circular layouts. Notice that Walgreens promotes more private label in circulars than

Rite Aid. Also the Walgreens circulars are two pages larger on average but with one

less ad block per page; thus Rite Aid is squeezing more promotions onto circular

pages. Walgreens also ran 3 more circulars than Rite Aid for Current Year time period.

Ad blocks Rite Aid Walgreens

Current Prior Current Prior

Circular Count 55 53 58 59

Pages per Circular 14.3 14.8 17.1 16.4

Ad Blocks per Page 12 11 11 10

Ad Blocks per Front Page 11.6 12.4 11.2 9.5

% of Ads with Pricing 63.5% 62.4% 73.2% 75.1%

PL % of Total Ad Blocks 13.5% 12.9% 19.2% 20.1%



Pricing Analysis:

• Pricing ComparisonSee whether a basket of goods purchased at

both retailers costs the same

• Pricing Variation Over TimeDoes one retailer change prices or discount

rates more frequently than the other?

• Product Level Price Point VariationDoes one retailer have product offerings

across a wider variety of price points?

• Front Page Pricing StrategyAre front page items similarly priced to

comparable items on other circular pages?

• Year over Year Pricing AnalysisHow aggressive are retailers in raising prices

this year compared to the year prior?



PRICE BASKET CONTENTS AND METHODOLOGY

This example basket of goods was

developed by analyzing

frequently promoted items across

circulars to determine traffic

drivers.

In order to standardize prices,

price ranges were expressed as a

the average value and all units

were standardized to a single unit

type.

On the occasion that a month’s

data point was not available, this

analysis used the most recently

seen price point.

Product SizeAdvil Pain Reliever 10 ct./pk.

Blue Diamond Almond Snack Nuts 12 oz.

Bounty Paper Towels 2 roll

Colgate Total Advanced Toothpaste 6 oz.

Dawn Dish Detergent 12 oz.

Frito Lay Doritos 22 oz.

General Mills Chex Mix 24 oz.

Haagen-Dazs Ice Cream 56 oz.

Jif Peanut Butter 17.5 oz.

Kellogg's Nutri-Grain Bars 8 ct./pk.

Keebler Crackers 16 oz.

M&M's Packaged Candy 20 oz.

Maxwell House Coffee 19.5 oz.

Nabisco Cookies 22 oz.

Prilosec Heartburn Relief Tablets 20 ct./pk.

Scrubbing Bubbles Bathroom Cleaner 16 oz.

Sunsweet Multi Serve Juice 54 oz.

Tide Laundry Detergent 40 lds.



BASKET OF GOODS PRICE COMPARISONWalgreens has a cheaper basket of products when using our sample basket of goods.

$80

$82

$84

$86

$88

$90

$92

$94

$96

$98

$100

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Rite Aid Walgreens

Average Basket Price

Rite Aid: $91.67

Walgreens: $84.22



VARIATION IN PRICES

By looking at the

coefficient of variation in

our basket products’

prices, we can begin to

see where retailers are

active in adjusting prices.

Excessive price variation

may modify shoppers’

behavior to hold off on

purchases until discounted

prices become available.

The average basket price

variations used by each

retailer are the same for

this study!

Product Rite Aid WalgreensAdvil Pain Reliever 0.19 0.24

Blue Diamond Almond Snack Nuts 0.17 0.10

Bounty Paper Towels 0.21 0.19

Colgate Total Advanced Toothpaste 0.19 0.16

Dawn Dish Detergent 0.07 0.09

Frito Lay Doritos 0.11 0.14

General Mills Chex Mix 0.13 0.15

Haagen-Dazs Ice Cream 0.05 0.06

Jif Peanut Butter 0.11 0.46

Kellogg's Nutri-Grain Bars 0.14 0.14

Keebler Crackers 0.55 0.27

M&M's Packaged Candy 0.10 0.14

Maxwell House Coffee 0.11 0.10

Nabisco Cookies 0.13 0.14

Prilosec Heartburn Relief Tablets 0.05 0.04

Scrubbing Bubbles Bathroom Cleaner 0.10 0.17

Sunsweet Multi Serve Juice 0.20 0.07

Tide Laundry Detergent 0.05 0.03

Average 0.15 0.15

47

1 2 1 11

48

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0

10

20

30

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60

$22.99 $24.99 $25.00 $25.99 $26.99 $27.99

Rite Aid Walgreens



PRICE POINTS WITHIN PRILOSEC HEARTBURN RELIEF TABLETSNet Unit Prices for 42 ct./pk. Comparing Net Unit Pricing shows the wide variety of

price points possible when you consider the implications of offers and incentives.

Walgreens used a slightly tighter price range for this product compared to Rite Aid

which used some higher promotional price points.



PREMIUM PAGE

PRICING STRATEGY

This analysis looks at the

pricing discount on the front,

back, and wrap pages for

products compared to where

seen in the middle pages at

that same retailer.

Premium pages can be a

great place to drive traffic

with competitive pricing.

Overall, Rite Aid’s premium

pages were more aggressive

than Walgreens, with prices

11% lower than seen in

middle pages.

Product Rite Aid Walgreens

Advil Pain Reliever -10%

Blue Diamond Almond Snack Nuts 2% 3%

Bounty Paper Towels -52% 1%

Colgate Total Advanced Toothpaste

11% 10%

Dawn Dish Detergent -16% -13%

Frito Lay Doritos -8% -12%

General Mills Chex Mix -6% -52%

Haagen-Dazs Ice Cream -13% 3%

Jif Peanut Butter

Kellogg's Nutri-Grain Bars -1% 13%

Keebler Crackers -12% 7%

M&M's Packaged Candy -8% -19%

Maxwell House Coffee -15% -17%

Nabisco Cookies -9% -6%

Prilosec Heartburn Relief Tablets -5% -3%

Scrubbing Bubbles Bathroom

Cleaner

Sunsweet Multi Serve Juice -28%

Tide Laundry Detergent 1%

Average -11% -6%



YEAR OVER YEAR

PRICING CHANGESComparing the prior year net unit

price per standardized unit to the

current year (YOY) can provide

great insight into the overall pricing

environment.

Rite Aid had a -3% YOY decline in

standardized unit prices for our

basket items.

The YOY pricing competition for

Kellogg’s Nutri-Grain Bars is

apparent when using this view;

Rite Aid down -4% &

Walgreens up +22%.

Also note Rite Aid decreased YOY

average net unit promotional price

for Keebler Crackers; -12% &

Walgreens increased average net

unit price by +17%.

Product Rite Aid Walgreens

Advil Pain Reliever 22% 18%

Blue Diamond Almond Snack Nuts 15% 7%

Bounty Paper Towels 1% 6%

Colgate Total Advanced Toothpaste -10% 11%

Dawn Dish Detergent -11% -1%

Frito Lay Doritos -7% -3%

General Mills Chex Mix 1% 22%

Haagen-Dazs Ice Cream -4% 1%

Jif Peanut Butter -2% -1%

Kellogg's Nutri-Grain Bars -4% 30%

Keebler Crackers -12% 17%

M&M's Packaged Candy -6% -5%

Maxwell House Coffee -12% -4%

Nabisco Cookies -10% 22%

Prilosec Heartburn Relief Tablets -3% 2%

Scrubbing Bubbles Bathroom

Cleaner -16% -6%

Sunsweet Multi Serve Juice 12% 12%

Tide Laundry Detergent 1% 2%

Average -3% 7%



Product Mix:

• Top Manufacturers, Categories, and BrandsSee the largest differences in how these retailers

choose to allocate their space

• Private Label Share of Ad CountAre retailers over-promoting their own goods at the

expense of branded products?

• Investigate Targeted MarketingLook for key product types such as Organic or Locally

grown.

• Product Variety ComparisonAre retailers pushing the same products every week?



COMPARING CIRCULAR SPACE BY SEGMENTSegment level circular share of space for current year circulars only.

Segment level data gives you a birds eye view of circular strategy and product mix.

Rite Aid Walgreens

Personal Care 23.9% 18.5%

Dry Grocery 23.8% 20.8%

Health Care 19.0% 22.5%

Other Segments* 16.4% 19.8%

Cosmetics, Fragrance

& Bath6.9% 5.7%

Household Products 6.5% 6.9%

Electronics 1.9% 4.8%

Pharmacy Services 1.6% 1.0%

Rite Aid allocates more circular space to Personal Care, Dry Grocery & Cosmetics,

Fragrance & Bath products than Walgreens. Walgreens promotes Health Care

products with a larger share of circular space than Rite Aid.



DIFFERENCES IN CIRCULAR SPACE BY CATEGORYThis table shows the ten largest cases where category share of circular space at

Rite Aid exceeded Walgreens.

Rite Aid Walgreens Difference

Everyday Candy 6.4% 3.4% +3.0%

Hair Care 5.9% 3.3% +2.6%

Cosmetics 5.6% 3.9% +1.7%

Adult Beverages 2.8% 1.5% +1.2%

Seasonal Candy 2.7% 1.4% +1.2%

Oral Care 3.5% 2.5% +1.1%

Baby 2.4% 1.4% +1.0%

Picnic, Patio & Outdoor Living 1.5% 0.6% +0.9%

Digestives 2.6% 2.0% +0.6%

Wellness 1.6% 1.0% +0.6%

The largest differences are in Personal Care and Dry Grocery categories.



DIFFERENCES IN CIRCULAR SPACE BY CATEGORYConversely, this table shows the ten largest cases where category share of circular

space at Walgreens exceeded Rite Aid.

Rite Aid Walgreens Difference

Photo 0.7% 2.6% +1.9%

Vitamin Supplements 3.7% 5.6% +1.9%

Home Health 1.5% 2.7% +1.2%

Frozen 0.6% 1.4% +0.8%

Dairy 0.1% 0.9% +0.8%

Fragrances 0.6% 1.3% +0.7%

Paper Products 2.4% 3.1% +0.7%

Allergy 1.4% 2.0% +0.6%

Beverage 3.0% 3.6% +0.6%

Telephones & Accessories 0.2% 0.8% +0.6%

In contrast, Walgreens uses more circular space to promote

Electronics and Health Care categories.



CONSOLIDATION IN ADVERTISED BRANDSCumulative Share of Space for Top 50 Brands in Current Year Circulars. This metric shows

how each retailer chose to allocate its ad space among brands; was it with the larger

macro brands or with more niche brands to match nuanced consumer tastes.

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40%

0 10 20 30 40 50

Rite Aid Walgreens

Top 50 Brands Combined

Share of Space

Rite Aid: 29.9%

Walgreens: 36.0%



SUB-CATEGORY SATURATION BY CIRCULARUsing a similar concept, this graph displays the Effective Ad Count per featured sub-

category for current year circulars. This metric can provide insight into whether retailers

are branching out their offerings across many sub-categories (shown by lower Effective

Ad Count sum)or have a more narrow focus (a larger Effective Ad Count sum).

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Rite Aid Walgreens

Week of Black Friday 2013.

Walgreens promoted many

of the same sub-categories in

a second circular leading to

higher Effective Ad Count

sum.

Conversely, Rite Aid

promoted more diverse sub-

categories in a second

circular hence the lower

Effective Ad Count sum.



TOP ADVERTISED ADULT BEVERAGE BRANDSThis compares the top brands share of category space for the adult beverage

category in current year circulars (excluding ads without a clear manufacturer).

Walgreens Space

Cordina 8.7%

Bud Light 6.9%

Miller Lite 6.9%

Coors Light 6.9%

Corona Extra 6.1%

Budweiser 5.7%

Heineken 5.3%

Yellow Tail 4.3%

Cupcake Vineyards 3.9%

Liberty Creek 3.3%

Walgreens Top 10 Total 58.1%

Rite Aid Space

Five Oaks 12.8%

Budweiser 11.1%

Miller 8.8%

Coors 7.3%

Bud Light 3.3%

Natural Light 3.2%

Miller High Life 3.2%

Busch 3.2%

Lime-A-Rita 3.2%

Michelob Ultra 3.1%

Rite Aid Top 10 Total 59.2%

Walgreens & Rite Aid appear to be offering about the same amount of variety

due to the similar percent of space share for the Top 10.

Adult Beverage is a good example of the importance of product mix, as

consumers tastes constantly evolve towards a greater variety.



PRIVATE LABEL CIRCULAR PRESENCE BY CATEGORYTop cases of private label share of category space in current year circulars. This view

shows you where retailers are filling shelves with their private label products exclusively.

Mostly different categories with large Private Label product promotions were found!

Walgreens Space

Maintenance Items 100.0%

Clothing Care 100.0%

Photo 93.0%

Dogs 57.6%

Home Climate 56.2%

Domestics 52.6%

Diagnostics 51.5%

Home Accessories 49.6%

Diabetes 49.0%

Kitchen & Tabletop 48.0%

Rite Aid Space

Outdoor 89.5%

Photo 74.7%

Exercise Equipment 67.2%

Nutrition 58.1%

Role Play 57.7%

Bath Accessories 56.9%

Feeding/Nursing Accessories 55.2%

Condiments & Dressings 47.1%

Cosmetic Accessories 38.8%

Foot Care 37.2%

Categories with >= 1 Effective Ad Count in Current Year



SHARE OF PRIVATE LABEL SPACE BY CATEGORYCategory share of private label space in current year circulars. This view shows which categories hold the majority of each retailer’s private label share of space. Walgreens devoted 9.3% more space to Private Label Photo products. At both retailers, Vitamin Supplements, Digestives, Analgesics, Home Health & Beverage categories are well represented with Private Label promotions.

Walgreens Space

Photo 12.9%

Vitamin Supplements 6.8%

Home Health 6.2%

Paper Products 5.7%

Snacks 4.9%

Digestives 3.8%

Analgesics 3.3%

Christmas 3.0%

Beverage 2.7%

Kitchen & Tabletop 2.6%

Top 10 Total 51.8%

Rite Aid Space

Vitamin Supplements 7.7%

Digestives 6.8%

Baby 6.3%

Snacks 5.6%

Paper Products 5.5%

Nutrition 4.3%

Analgesics 3.9%

Home Health 3.9%

Beverage 3.6%

Photo 3.6%

Top 10 Total 51.0%



PROMOTIONS WITH COUPON MENTION SHARE OF SPACEShare of all circular promotional space dedicated to mentioning a manufacturer

coupon. It shows the commitment to a strategy of using coupon promotions in

conjunction with circular promotions.

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Rite Aid Walgreens



PRODUCT REPTITION OVER TIMEThis graph displays the percentage of products featured in each week’s circulars that

were also featured in the prior week’s circulars. Intensity of repetition at both retailers is

notable for the weeks of Black Friday through Christmas!

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Rite Aid Walgreens



Marketing Strategy:

• Price TransparencyAre retailers showing their prices to the consumer?

• Compare ExclusivityAre ad blocks sharing space? Are larger

manufacturers getting preferential treatment?

• Offer Type ComparisonAre different retailers trying different promotions to

change consumer behavior?

• Circular Incentive ComparisonAre retailers trying different circular incentives to get

consumers into stores?



DIFFERENCES IN PRICE TRANSPARENCY BY SEGMENTThis table shows the percentage of ad features that have pricing information included

in them. The remaining either focus on a specific offer or are brand equity ads.

Rite Aid Walgreens




Other 47.5% 64.8%



Cosmetics, Fragrance & Bath 9.6% 26.2%


Total 56.3% 58.3%

Walgreens has slightly greater pricing transparency across all segments.



DIFFERENCES IN EXCLUSIVITY BY SEGMENTWithin current year circulars, this table shows what percentage of ad features did not

feature multiple manufacturers in the same ad block.

Rite Aid Walgreens




Other 59.5% 57.3%



Cosmetics, Fragrance & Bath 88.7% 67.5%


Total 64.7% 72.5%

Walgreens is less likely to share its ad blocks among multiple vendors. Walgreens gave

Personal Care products manufacturers a high exclusivity of 92.8% and Rite Aid gave

Cosmetics, Fragrance & Bath products manufacturers 88.7% exclusive promotions.



DIFFERENCES IN EXCLUSIVITY BY MANUFACTURERThis table allows you to see how aggressive retailers are in sharing ad space for each

group of manufacturers grouped by their share of voice in current year circulars.

Rite Aid Walgreens

Private Brand and Fresh 92.7% 91.1%

Top-Tier Manufacturers 63.6% 86.6%

Mid-Tier Manufacturers 20.8% 65.4%

Bottom-Tier Manufacturers 15.3% 54.8%

Total 64.7% 85.3%

Rite Aid gave much lower exclusivity to

Top-Tier, Mid-Tier and Bottom-Tier Manufacturers.



OFFERS TYPE USAGE BY RETAILERIn current year circulars, these are the most seen offer types attached to products.

Rite Aid Walgreens

Price Point 39.5% 39.3%

BOGO 29.4% 25.0%

X/For 16.7% 16.3%

Save X% 6.5% 8.3%

Incentive 6.2% 7.8%

Other Offers* 1.1% 0.2%

Save $X 0.6% 3.2%

Rite Aid and Walgreens appear to have very similar promotional Offer Type strategies. Walgreens is utilizing Save $X offers +2.6% more often than Rite Aid

Other Offers*: w/purchase, Free w/X, w/X, None, Save $X.



AD BLOCK INCENTIVES BY RETAILERThis table displays the share of ads effected by selected ad block level incentives in

current year circulars.

Rite Aid Walgreens

Rewards Program 84.8% 77.5%

Coupons 14.5% 18.1%

Free Item/ Free Service 0.2% 2.3%

Other Incentives 0.5% 2.1%

Portion of Promotions with Incentives Attached

57.1% 67.8%

Walgreens attached approximately 10.7% more incentives to promotional ad blocks.Both retailers focus on retailer reward program incentives to drive sales.



CIRCULAR INCENTIVES BY RETAILERThis table displays the share of ads effected by selected circular level incentives in

current year circulars.

Walgreens

No Circular-Wide Incentive 100.0% 70.9%

Retailer Rewards 0.0% 23.0%

Save $X /X% 0.0% 4.7%

Free Offer 0.0% 1.3%

Walgreens is much more aggressive in promoting circular wide incentives,

with nearly 30% of circular ad blocks affected by a circular incentive related

to a Retailer Rewards program.

Rite Aid did not use circular wide incentives in current year!



Contact Information

Account Manager

Sarah Roda

440-528-0464

[email protected]

Analyst

Danal Harvey

440-498-0500

440-524-3040 x1214

[email protected]

mailto:[email protected]

mailto:[email protected]

Documents

ECRM Market Matchup: Rite Aid vs. Walgreens Atlanta, GA · • Marketing Strategies. ... Metrics like these help you understand the design and strategy behind retailer’s ... Haagen-Dazs