Rite Aid Pharmacy Is Closing All Locations In This US State And The Reason Couldn't Be Clearer

Major pharmacy and drugstore chain Rite Aid is set to close all New York state locations by June 2025. The shutdown applies to 178 stores, and will negatively impact thousands of employees, with layoffs scheduled to begin on June 4, 2025.

The store closures announcement comes paired with Rite Aid's latest bankruptcy filing. While Rite Aid has been in existence for more than 60 years, the May 5, 2025 filing is actually Rite Aid's second Chapter 11 bankruptcy protection filing in just two years. Per a press release issued by Rite Aid, the company is attempting to sell the bulk of its assets, and a multitude of parties are already demonstrating "meaningful interest."

The chain has used its voluntary bankruptcy filings, commenced in New Jersey state, to secure $1.94 billion in new financing commitments from its already-established lenders, which will allow the chain's stores to remain fully operational during bankruptcy proceedings — or, in the case of New York state stores, fully operational until June, barring a last-minute sale.

It may seem like you can't fill a prescription these days without hearing about a neighborhood pharmacy closing locations or a major healthcare provider declaring bankruptcy. In fact, Rite Aid's official statement on its bankruptcy filing and store closure even makes a point to highlight the hard times hitting healthcare. "We have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate," admits Rite Aid Chief Executive Officer, Matt Schroeder, in the chain's press release.

It is true that shifts in consumer spending, upticks in shoplifting, and increased competition from discount prescription providers like Target and Walmart have all played a part in the decline of the traditional drugstore and pharmacy model. It is also true that prescription reimbursement slowdowns from insurance companies, paired with rising operational costs and drug costs (with some pharmaceutical prices rising due to tariffs), have made stores like Rite Aid less profitable in recent years.

However, Rite Aid entering a second bankruptcy less than a year after it already closed hundreds of stores in order to exit its previous bankruptcy can't be chalked up to changing consumer habits entirely. The fact that Rite Aid is facing mass layoffs and asset liquidation speaks to deeper problems within the company. While the leadership and brand may continue to dodge these problems unscathed, workers and consumers will ultimately suffer.

Rite Aid's first and now second bankruptcies, plus the hundreds of store closures and thousands of layoffs that hang in the balance, have significant roots in Rite Aid's role in the opioid crisis. In July 2024, the United States Justice Department announced, via an Office of Public Affairs press release, that Rite Aid had agreed to pay a civil settlement for profiting from the sale of falsely prescribed opioids. In the release, Drug Enforcement Administration (DEA) Administrator, Anne Milgram, said that "Rite Aid contributed to this crisis by ignoring obvious red flags and dispensing hundreds of thousands of unnecessary opioids." Private lawsuits were also levied against Rite Aid for these crimes, and the chain has clearly continued to suffer under the debt burden incurred through settlements and legal proceedings.

Rite Aid also suffers from its own over-expansion, and history of internal misdeeds. Much like its primary competitor, Walgreens, Rite Aid spent billions on its own rapid growth throughout the late 1980s and into the early 2000s. All of that acquisition, however, was not without scandal — with Rite Aid C-suite leaders being convicted of accounting fraud charges in 2003.