💊 Rite Aid’s bankruptcy pill
Hey Snackers,
There were two types of people at movie theaters this weekend: those there for Taylor Swift and everyone else. Swifties, dressed in tour merch, flooded cinemas, helping the “Eras Tour” concert film rake in $95M its opening weekend.
Stocks climbed yesterday as investors settled into the idea that the Fed may actually, finally, for real this time be done with rate hikes for the year. Meanwhile, economists increasingly believe the US will avoid a recession.
Rite Aid files for bankruptcy as other pharmacy chains struggle with labor shortages
What the (financial) doctor ordered… Rite Aid filed for bankruptcy on Sunday after years of sales declines, debt issues, and costly opioid-related legal battles. The drugstore chain, which had closed 200+ stores in the past two years, is expected to shutter even more of them, threatening the job security of its 47K employees.
Not-so-thrifty balance sheet: Rite Aid rang up $2B+ in losses over the past five years, and its 2.1K store count is about half of what it was a decade ago. As of this summer, the chain had $3.3B in debt.
Prescription probs: Rite Aid said it would work to transfer prescriptions from locations that are closing to other pharmacies to avoid delays in customers getting their meds.
Headed to court: The Justice Department sued Rite Aid in March, alleging that it ignored red flags when filling “at least hundreds of thousands” of opioid prescriptions between 2014 and 2019. The DOJ also said Rite Aid dismissed concerns from employees. Similar suits have dinged Walgreens, CVS, and Walmart to the tune of $13B.
In need of a boost(er)… Rite Aid isn’t the only pharmacy struggling: a nationwide pharmacist shortage has upended the industry, leading CVS and Walmart to cut pharmacy hours. Walgreens employees who said they were overworked staged a walkout last week, and the protests could expand to other chains. Staff shortages were also behind a recent 75K-worker strike against the Kaiser Permanente health system.
Burnout has a high cost… and the receipt’s getting longer. 74% of US pharmacists said they didn’t have time to safely perform their job duties. And workloads may be about to increase even more with a busy cold, flu, and Covid-booster season expected. Understaffing can lead to dangerous situations, like incorrectly filled prescriptions, which can be far pricier than the cost of labor.
Netflix takes a page from Disney’s playbook with a plan to open IRL venues
Coming soon… Netflix recently sent its last red DVD envelope, but the streamer’s not ditching physical offerings. Introducing Netflix House. The biz said the venues will feature dining, retail, and entertainment inspired by its top shows and movies. The first two locations are set to open in the US in 2025, and global spots could follow.
⏪: Netflix House will be the streamer’s first brick-and-mortar after years of pop-up experiences in big cities. Recall the Netflix Bites restaurant and ticketed events like “The Queen’s Ball: A Bridgerton Experience.”
⏩: The IRL news comes before Netflix’s earnings tomorrow. Investors expect to hear how the streamer’s password crackdown is panning out.
Scoops Ahoy ice cream… with flavors like Pineapple Upside Down. Netflix’s digital content world is getting physical: the streamer debuted a “Stranger Things” ice cream line at Walmart last month and signed its first gambling deal for a “Squid Game” slot machine heading to casinos next year. Netflix also bought Hollywood’s historic Egyptian Theatre to host special events and screenings. Plus, it’s been selling show-themed merch on its e-commerce site since 2021. After seeing fans engage with its IRL offerings, Netflix says it wants to take the experience to the next level with Netflix House.
Experiences last longer than ad impressions… and some analysts say it’s high time Netflix ramped up its experiential marketing. Disney and Universal have been expanding their theme-park experiences (think: Galaxy’s Edge at Disneyland, Super Nintendo World at Universal) to breathe fresh life (and $$) into old IP. Netflix frames its experiences as marketing tools, not revenue drivers, but there could be a bigger franchise opportunity on the horizon.
What else we’re Snackin’
Out: Microsoft-owned LinkedIn said it would lay off 668 employees, bringing cuts this year to nearly 1.4K. Revenue growth at the career-networking platform has slowed for eight quarters straight.
Ignition: As the United Auto Workers union expands its strike against the Big Three carmakers, Ford exec chair Bill Ford made a rare plea to union leaders to end the “acrimonious” talks and make a deal.
StarShip: Shipping titan Maersk (you’ve seen its massive containers) said it’s adding SpaceX’s Starlink internet to 330 ships to keep crews connected. Starlink has launched 5K+ satellites for various industries.
Bagged: Cigarette giants including British American Tobacco are trying to get ahead of an EU ban on flavored heated tobacco by selling nicotine-infused tea (picture: rooibos). Experts say it’s unclear whether the tea’s safe.
NoLambo: Ferrari started accepting payment in crypto in the US and said it plans to do the same in Europe. The iconic carmaker said it was responding to requests from customers.
Tuesday
Earnings expected from Albertsons, Bank of America, Goldman Sachs, Johnson & Johnson, Lockheed Martin, Prologis, and United Airlines
Authors of this Snacks own shares of: CVS, Disney, Microsoft, and Walmart