Rite Aid Corp. has a market cap of $1.27 billion; its shares were traded at around $1.43 with and P/S ratio of 0.1. RAD is in the portfolios of David Tepper of APPALOOSA MANAGEMENT LP, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:In our stores, we sell prescription drugs and a wide assortment of other merchandise, which we call "front end" products. In fiscal 2010, prescription drug sales accounted for 67.9% of our total sales. We believe that our pharmacy operations will continue to represent a significant part of our business due to favorable industry trends, including an aging population, increased life expectancy, anticipated growth in the federally funded Medicare Part D prescription program as "baby boomers" begin to enroll in 2011, expanded coverage for uninsured Americans as the result of the Patient Protection and Affordable Care Act and the discovery of new and better drug therapies. We offer approximately 25,000 front end products, which accounted for the remaining 32.1% of our total sales in fiscal 2010. Front end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, beverages, convenience foods, greeting cards, seasonal merchandise and numerous other everyday and convenience products, as well as photo processing. We attempt to distinguish our stores from other national chain drugstores, in part, through our private brands and our strategic alliance with GNC, a leading retailer of vitamin and mineral supplements. We offer approximately 3,300 products under the Rite Aid private brand, which contributed approximately 15.0% of our front end sales in the categories where private brand products were offered in fiscal 2010.
The overall average size of each store in our chain is approximately 12,500 square feet. The average size of our stores is larger in the western United States. As of February 27, 2010, approximately 59% of our stores are freestanding; approximately 50% of our stores include a drive-thru pharmacy; approximately 40% include one-hour photo shops; and approximately 40% include a GNC store-within-Rite Aid-store.
We have several initiatives underway to simplify work processes in our stores to enable better customer service. We continue to offer our free Rx Savings Card, which provides cost savings on all prescription drugs to patients with limited or no insurance. We offer an automated refill option for customers with maintenance prescriptions, and also make courtesy refill reminder phone calls. In the front end business, we plan to aggressively grow our private brand offerings, as we believe that our private brand products offer cost effective alternatives to national brand products that are very attractive during difficult economic times. We are rolling out our new private brand architecture with strong promotional support, good price positioning and continued development of new items, which will help us grow private brand sales and meet the needs of today's customers. We expect this will increase our private brand penetration in categories such as health and beauty products, food and other consumables, household goods and baby products by approximately 75 basis points from approximately 15.00% to approximately 15.75% by the end of fiscal 2011. Additionally, we also have several other front end initiatives planned, including merchandising and sales growth, and shrink reduction. We also plan to add 105 new GNC stores-within-Rite Aid-stores.
Sales of prescription drugs represented approximately 67.9%, 67.2%, and 66.7% of our total sales in fiscal years 2010, 2009 and 2008, respectively. In fiscal years 2010, 2009 and 2008, prescription drug sales were $17.4 billion, $17.6 billion, and $16.2 billion, respectively. See "Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements.
In fiscal 2010, 96.2% of our pharmacy sales were to customers covered by third party payors (such as insurance companies, prescription benefit management companies, government agencies, private employers or other managed care providers) that agree to pay for all or a portion of a customer's eligible prescription purchases based on negotiated and contracted reimbursement rates. During fiscal 2010, the top five third party payors accounted for approximately 41.4% of our total sales, the largest of which represented 14.4% of our total sales. During fiscal 2010, Medicaid related sales were approximately 6.9% of our total sales, of which the largest single Medicaid payor was approximately 2.0% of our total sales. During fiscal 2010, approximately 16.7% of our pharmacy sales were to customers covered by Medicare Part D.
We believe that our relationships with our associates are good. As of February 27, 2010, we had approximately 97,500 associates; 13% were pharmacists, 44% were part-time and 26% were unionized. Associate satisfaction is critical to the success of our strategy. We have surveyed our associates to obtain feedback on various employment-related topics, including job satisfaction and their understanding of our core values and mission. We have also instituted an internal group, consisting of managers and staff from all components of our business that is responsible for using feedback from associates throughout the Company to create a better work environment.
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