Will anything change when Bartell Drugs isn’t local anymore?

Dec 2, 2020, 10:38 AM | Updated: 11:06 am

Bartell Drugs...

On Thanksgiving Eve 2020, a Bartell Drugs employee installs a holiday banner to be ready for Black Friday; this holiday season is the Seattle-based chain's last as a locally-owned company prior to being acquired by Rite Aid. (Feliks Banel/KIRO Radio)

(Feliks Banel/KIRO Radio)

Tacoma-born and Spokane-raised mega-crooner Bing Crosby said it best.

It’s beginning to look a lot like Christmas, everywhere you go!

Take a look at the five-and-ten, glistening once again …

With candy canes and silver lanes aglow!

The deal to sell Seattle-based Bartell Drugs to national chain Rite Aid that was announced back on Oct. 7 is likely to close sometime this month. Rite Aid will pay $95 million, for a stunningly low average of about $1.4 million each for all 67 of Bartell’s locations in the Seattle area. It’s unclear exactly what impact the sale will have on Bartell’s retail and administrative workforce.

Bartell’s was originally founded in Seattle back in 1890 by George Bartell. The founder’s grandson – George D. Bartell – is the current chairman of the company.

On a personal note, I’ll admit it: I love Bartell’s, and especially at Christmastime. I’ve been shopping at the Wallingford location for 25 years, and I feel like there are kind and helpful employees who’ve been working there nearly that long, too. I run into my neighbors there, and the parents of my daughter’s long-ago schoolmates or soccer teammates who I otherwise would never see at school or the playfield anymore. And I like buying things I need there and knowing that the proceeds pay local wages and support local jobs, and I like that they carry a lot of local products – like Mountain Bars, Market Spice Tea, Johnny’s Seasoning Salt, or J.P Patches memorabilia.

KIRO Radio wanted to interview George D. Bartell to learn more about the personal and sentimental side of this story — to find out how it feels to him and to his relatives to be selling the family business, which is still a local favorite after 130 years. However, Bartell’s PR people demurred; they said Mr. Bartell won’t do interviews until the sale to Rite Aid is approved by regulators.

And to be clear, Bartell Drugs is a private company, and Rite Aid is publicly traded — both are private businesses that don’t need permission from anyone to do whatever they please. But so many businesses — whether we’re talking about Boeing, or Schuck’s Auto Parts, or QFC, or the Bon Marché, or even KIRO Radio – become part of Seattle and Pacific Northwest culture, and their employees and customers are local people who are affected by a change like this.

For her job, Áine Cain pays a lot of attention to acquisitions, such as what’s taking place with Bartell’s and Rite Aid. Cain is senior retail reporter at Business Insider in New York, and she says that nowadays, acquisitions like this are “a thing.”

“It’s pretty common in the drugstore business and the general retail business as a whole,” Cain said from Brooklyn on Tuesday. “But it can definitely cause a lot of friction if the chain that’s being acquired is a beloved local staple, because these acquisitions tend to bring about changes, and sometimes those are not super-welcome to the local community.”

Bartell Drugs CEO Kathi Lentzsch told KING TV’s Chris Daniels in October that the reasons for the sale include changes in the pharmacy business, higher taxes, and, perhaps not surprisingly, COVID.

“We have been going through this COVID period just like all other retailers, all other businesses,” Lentzsch told Daniels. “And when it hit, it made us realize that we needed to look at other ways to ensure our future was going to be here for Seattle. We have experienced changes in the pharmacy industry, as everybody’s aware of what’s going on with health care. We, of course, have seen business taxes rise, various taxes rise in Seattle. And COVID hits, and it was just one more thing, and we decided we had to figure out how to continue.”

Bartell’s specifics aside, Cain says there’s a whole host of what she calls “headwinds” facing drugstores – and she says this was true before COVID, and whether or not a particular business has a loyal customer base.

“You have the explosion of e-commerce, people getting their drugs online. You have insurance companies reducing their payouts, and basically the situation is that whether or not you’re delighting the customer doesn’t necessarily matter,” Cain said. “What matters is that you have the scale to operate, and unfortunately, we’re increasingly seeing big players like Rite Aid, CVS, Walgreens as the players that are really able to operate in this really bad environment.”

Is it irrational for local consumers to feel a kind of “attachment” to the idea of a locally owned store like Bartell Drugs?

“I think there used to be a lot more hew and cry about some of these acquisitions,” Cain said, “because these retail stores definitely mean something to these cities and these regions, and they’re a point of community pride in some cases, as it seems Bartell’s was.”

And, is what can often feel like knee-jerk disdain for big national chains like Rite Aid, CVS, or Walgreens – and the sometime perceived inability to best serve a particular region – somewhat misguided?

Cain says there’s really nothing wrong with the way any of those big companies run their stores, but at the same time, concerns for the loss of a locally owned and locally managed chain aren’t completely unfounded.

“I think from a customer service perspective, a regional chain is going to understand its community probably better than a national chain, just like a mom-and-pop store is going to be understanding of its main street better than perhaps a national retailer like a Walmart,” Cain said.

“So I’d say in terms of quality, yeah, there should be concerns,” Cain added.

And there were concerns earlier this year that drove Representative Alexandria Ocasio-Cortez of New York and Senator Elizabeth Warren of Massachusetts to float legislation called the “Pandemic Anti-Monopoly Act” that would have perhaps put acquisitions like what Rite Aid has planned for Bartell Drugs on hold.

Cain says that AOC even mentioned Rite Aid by name in promoting the bill.

“Ocasio-Cortez specifically called out Rite Aid in her recent comments regarding monopolies,” Cain said. “Basically, what she’s calling for and what Warren is calling for, is that retailers and other companies stop acquiring right now during the pandemic. She specifically singled out Rite Aid buying up smaller businesses in order to consolidate the market at this vulnerable time for everybody.”

A press release posted in April on Senator Elizabeth Warren’s website included this quote from AOC:

“This legislation is desperately needed. Antitrust agencies have already admitted their capacity to review mergers is reduced by the crisis. Meanwhile, reports say that Rite Aid, private equity and other big businesses are actively looking to scoop up smaller businesses and consolidate industry for their gains. These companies should be using their cash reserves to help their employees not to acquire more power. If we don’t stop predatory M&As now, the actions of big corporations will have decades-long economic consequences — for all of us. With less competition, the whole country will see job loss and higher costs for consumers.”

The House version of the bill was referred to the House Judiciary Committee back in May, and appears to have stalled. It’s unclear if it will be reintroduced or if it will just fade away.

Something else that might fade away is the 130-year old “Bartell Drugs” brand-name – and all that signage, and all those uniforms, and other bits and pieces of the retail business that bear the family name.

There’s been a lot of speculation about whether or not the “Bartell Drugs” brand identity will survive beyond a one or two-year transition period that begins once Rite Aid takes over. Will it remain known as Bartell Drugs? Will there be some unfortunate hyphenated name? Many people in the Northwest have not-so-fond memories of the “transition period” of other local brand names such as Bon-Macy’s and Schuck’s-O’Reilly.

A press release about the acquisition – a version of which is posted on the website of each company – includes a sub-heading that says “Historic Brand Remains in Place,” and includes a line that says that “Bartell Drugs’ stores join Rite Aid’s existing 69 Seattle area stores and will continue to operate under the Bartell Drugs name.” If so, that will be a fairly unusual arrangement.

In October, Rite Aid CEO Heyward Donigan seemed to tell Chris Daniels of KING 5 that Bartell Drugs could possibly remain a somewhat separate entity, perhaps some kind of niche-y, not-quite-homeopathic “natural” drugstore chain-within-a-chain?

It’s all very vague at this point. Rite Aid does already have those 69 stores in the Seattle area, so it’s difficult to imagine that the larger chain wants to spend advertising and other dollars promoting two separate brands to compete against each other in the same market. And, a quick search reveals that there are at least five regional chains that Rite Aid has acquired in the past 20 years or so whose names did fairly quickly go away.

Can Áine Cain of Business Insider imagine any scenario where the Bartell name remains?

“Honestly, no,” Cain said. “I don’t want to speculate too much because there’s a first time for everything, but I don’t think most national retailers are in the habit of doing that for more than a transition period.”

“Their strength is their name brand recognition,” Cain continued, describing the reach of Rite Aid and its thousands of stores. “And I don’t think they want to be seen as just keeping these different other brands alive for nostalgic purposes or for even supporting the local community.”

The timing of a name-change – if there is one – is impossible to predict.

“I think at some point, there’s going to be a switch flipped,” Cain said. “But of course, I’m speculating. Maybe Rite Aid in this case is so enamored with the Bartell brand that they are going to change their playbook, but I guess I’m just speaking from seeing how these things usually operate.”

“I would say that’s not a likelihood,” Cain said.

Will you miss locally-owned Bartell Drugs? Like me, are you making extra “goodbye visits” to your local Bartell Drugs this holiday season? This is what some have said in response to my informal survey on social media in the past few days:

“Bartell’s has always been so local and so friendly. The change to a corporate, out-of-state-based chain will feel cold. The Rite-Aid stores, along with Walgreen’s, already feel out of place in Southwest Washington.”

“Who says Bartells is going to change? Don’t stir up trouble until we see what happens after the switch.”

“I get sad every time I go there lately. I don’t trust the ‘it won’t change’ propaganda.”

“We moved ‘out of town’ 16 years ago and Bartell’s is on my way home. One week my husband called me on my way home and asked, ‘Where are you?’ My response was ‘Bartell’s.’ That week he called me three different days and I just happened to be at Bartell’s. He finally asked if I go there every day on my way home. I replied, ‘Yes!’ Now whenever he asks me where I am, I give him the same reply and I sure hope that doesn’t change! There is a Rite Aid maybe a mile up the road that looks like it is stuck in the 1990’s and it has been years and years since I have stepped foot in one. I still sneak into MY Bartell’s at 7:01am on my way to work during Covid. No one is in there and the employee that opens is just the sweetest.”

“Of course! Every holiday I would go to the Bartell’s on lower Queen Anne. I do not live near there anymore but still need to visit since it was ‘my store’ and will always hold a special place in my heart”

“We love our Inglewood neighborhood Bartells! Had to pick up the space needle and the red hand blown glass ornament, and Theo’s chocolates, and a bottle of Chateau St Michelle wine. I’ll miss them being our local brand. Cheers to 130 years.”

Please let me know how you feel about Bartell Drugs changing hands via my contact info below.

You can hear Feliks every Wednesday and Friday morning on Seattle’s Morning News and read more from him here. If you have a story idea, please email Feliks here.

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Will anything change when Bartell Drugs isn’t local anymore?