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Thrifty PayLess Holdings, Inc. was a pharmacy holding company that owned the Thrifty Drugs and PayLess Drug Stores chains in the western United States. The combined company was formed in April 1994 when Los Angeles–based TCH Corporation, the parent company of Thrifty Corporation and Thrifty Drug Stores, Inc., acquired PayLess Drug Stores Northwest, Inc.

Key Information

At the time of the merger, Thrifty operated 495 stores and PayLess operated 543 stores. TCH Corporation was renamed Thrifty PayLess Holdings, Inc. In 1996, Rite Aid acquired Thrifty PayLess Holdings.

History of PayLess

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Logo for PayLess Drug Stores.

Independence

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In 1932, L.J. Skaggs opened Payless Drug Stores in Tacoma, Washington, which soon expanded across the western United States. In 1939, four stores were sold to his brother Samuel "L.S." Skaggs and two associates after they resigned as executives at Safeway. These stores later became known as Skaggs PayLess Drug Stores, and later part of Skaggs Companies.[1][2] The stores that remained with L.J. Skaggs eventually became part of Thrifty PayLess.

During the 1940s, Peyton Hawes and William Armitage acquired five drug stores in Oregon and Washington, which were named PayLess, and grew their chain through both acquisition and internal expansion.[3][4][5] Hawes lost two stores in the 1948 Vanport flood. By 1950, he had 11 stores across Oregon, Idaho, and Washington.[6] By the 1960s, the Payless name was used by three separate companies: One based in Washington and Oregon, one in California, and a four-store chain in Tacoma, Washington.[7] By 1961, Hawes had 12 stores throughout Oregon, four in Washington, one in California, and one in Idaho.[8]

In 1967, Pay Less Drug Stores Northwest became a public company.[9] As early as 1971, the 32-store Skaggs Pay Less Drug Stores of Oakland discussed a merger with the 39-store Pay Less Drug Stores Northwest, Inc. of Portland. The combined company would drop the Skaggs name to be called Pay Less Stores.[10] In 1973, the company acquired Seattle-based House of Values and Portland-owned Gov-Mart Bazaar to form PayLess House of Values. In 1976, it bought 21 Value Giant stores in Northern California, Oregon, and Washington.[11] Pay Less Drug Stores Northwest finally acquired PayLess Drug Stores of Oakland, California, in 1980.[12] Pay Less hit $1 billion in sales in 1984.[13]

Sale to Kmart

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In 1985, the 164-store Pay Less Drug Stores Northwest Inc. was acquired by Kmart for $509 million as part of the company's expansion program created by CEO Joseph Antonini.[12][14][15] In 1986, there were 225 PayLess stores.[citation needed] In 1987, the company purchased 25 Osco Drug stores in California, Idaho, Oregon, and Washington. In 1990, the company acquired Pay Less of Tacoma, Washington. By this time, PayLess operated in nine western states before its parent company was acquired by Rite Aid and the stores rebranded.[citation needed]

In 1992, PayLess purchased 124 Pay 'n Save stores in Washington, Alaska, Hawaii and Idaho from Pacific Enterprises.[16][17] By 1993, PayLess was the 10th-largest drugstore chain in North America and operated in 12 Western states.[14] However, by August 1993, Kmart announced it was putting Payless up for sale in order to concentrate on its core discount operations.[18]

History of Thrifty

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A Thrifty Drug Store at Sunset Blvd. and Fairfax Ave. in Los Angeles, c. 1939

Thrifty Drug Stores

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In 1919, brothers Harry[19] and Robert Borun, along with brother-in-law Norman Levin, founded Borun Brothers, a Los Angeles drug wholesaler. By 1929, the brothers opened their own Los Angeles retail outlets under the name Thrifty Cut Rate Drug Store.[20] The first store was located at 412 S. Broadway in downtown Los Angeles, just across the street from the original Broadway Department Store.[21]

After opening five additional downtown area stores,[22] Thrifty opened its seventh store in the recently completed Pellissier Building in the Mid-Wilshire district, on Wilshire Boulevard and Western Avenue, in 1931. This was their first store outside of downtown,[23] and it was quickly followed by several new stores within a few miles of downtown.

By 1942, Thrifty Drug Stores operated 58 stores and 78 stores in 1948.[24] By the time its 100th store opened in Studio City in 1950,[25] Thrifty ranged as far north as Santa Rosa, California, and as far south as San Diego. Thrifty soon expanded outside California, opening a Las Vegas location in 1952.[26] In 1959, the chain expanded into the Pacific Northwest with a store in Eugene, Oregon.[27][28]

A selection of Thrifty store-branded products

Store grand opening events were always a large spectacle, with politicians as well as movie and television celebrities involved in the ceremonies. Actor Errol Flynn participated in the 1941 opening of the South Pasadena store.[29] A neon Thrifty Drug Store sign is visible in the background of a scene from the 1954 Judy Garland version of A Star Is Born.

During the 1950s, a Thrifty commercial jingle played on numerous radio stations in Southern California:

Save a nickel, save a dime.
Save at Thrifty every time.
Save a dollar and much more,
at your Thrifty Drug Store![30]

Diversification as Thrifty Corp.

[edit]

In the early 1970s, Thrifty's parent began to diversify outside the drug store industry through the acquisition of Big 5 Sporting Goods, a sporting goods chain, in 1972.[31] Thrifty expanded into general merchandising by the gradual acquisition of The Akron chain, 40% in 1976,[32] increasing to 90% the following year,[33][34] and eventually to 100%.

Thrifty's parent, Thrifty Drug Stores Co. Inc., became Thrifty Corp. in 1977 to better reflect the parent company's expansion into non-pharmacy businesses through the purchase of companies such as Big 5 Sporting Goods and The Akron.[35]

During the 1980s, Thrifty further diversified by entering into several joint ventures with Herbert Haft and his East Coast–based Dart Drug that would introduce Crown Books and Trak Auto to the West Coast. Thrifty acquired 50% ownership of Crown and had opened several bookstores in the Los Angeles area in 1981.[36][37] In 1982, Thrifty sold the 21-store Akron chain to Hong Kong investors.[38] In 1983, Thrifty acquired 50% ownership in Trak and also opened several of the auto parts stores in the Los Angeles area.[39]

In Washington State, Thrifty went by the name of Giant T since the Thrifty name was in use by another chain of drug stores. The name was later changed to Thrifty in 1984.[citation needed]

In 1986, Thrifty acquired the 15-store Drug King chain in January and 13 Guild Drug stores in March. Both businesses were converted to Thrifty Jr. locations. At that time, Thrifty Corp. was made up of 550 Thrifty Drug stores and 90 Big 5 Sporting Goods stores, with interest in the 187-store Crown Books chain and 72-store Trak Auto West discount automobile parts chain.[40] During the same year, it also acquired sports retailing brand Gart Bros.[41]

Sale to Pacific Lighting

[edit]

Thrifty Corp. was acquired by Pacific Lighting, the parent of Southern California Gas, in May 1986.[42] At the time, this included 555 Thrifty drug stores, 27 Thrifty Jr. stores, and 89 Big 5 sporting goods stores.[43] One of its first decisions was to sell Thrifty's shares in Crown Books and Trak Auto West.[44] In 1988, Thrifty acquired Pay 'n Save and Bi-Mart.[45][46] Following the acquisition, all Thrifty stores in Washington state were renamed to Pay 'n Save.[47]

Thrifty close its seven remaining Utah stores in May 1989.[48]

By the end of the decade, Thrifty Corp. was losing money for the now-renamed Pacific Enterprises.[49] When the company's long-time president resigned in 1990, it kicked off a series of executive changes that continued through the early part of the decade.[50][51][52][53][54][55] In 1991, Thrifty Corp. stores collectively lost $164 million.[49]

Management buyout

[edit]

In 1992, Pacific Enterprises ended its retailing aspirations by selling most of the Thrifty Corp. brands to investment bankers Leonard Green & Partners for $275 million as part of a management buyout.[56] This included Thrifty Drug Stores, Bi-Mart, Big 5, Gart Bros., and MC Sporting Goods.[49] PayLess Drug Stores, a subsidiary of Kmart, acquired Pay n' Save.[20]

By this time, Thrifty's stores were old and in need of updates. New management split the company's sporting brands into a separate operating division. Thrifty also left the Arizona and Nevada markets, closing all its stores in these states in 1992.[57] Within a year, Thrifty had reduced the size of the chain by 20%.[56] By 1993, Thrifty was the sixth-largest drugstore chain in North America with 497 California-based stores.[14][18]

History of Thrifty PayLess

[edit]

Thrifty PayLess Holdings

[edit]

In December 1993, it was reported that Kmart would sell its 572-store Payless drugstore chain to the owners of Thrifty Drug Stores in exchange for $592 million in cash, $100 million in debt securities, and a 47% stake in TCH Corporation, a new holding company controlled by Leonard Green, composed of Thrifty, Payless, and Bi-Mart.[14] In order to appease regulators, TCH sold several stores in California, Oregon, and Washington[58] and over 200 stores in North Carolina and South Carolina.[59]

The combined company was formed in April 1994 and renamed Thrifty PayLess Holdings, Inc. At the time of the deal, Thrifty operated 495 stores, PayLess operated 543 stores, and Thrifty PayLess ranked second in sales among the nation’s drugstore retailers.[18] Payless closed 40 stores in nine states in 1994.[60] It took Thrifty PayLess 18 months to merge both chain's POS and warehouse management systems.[56]

Tim McAlear of PayLess was chosen as the new company's chief executive and Leonard Green served as chairman. To accommodate McAlear, Thrifty PayLess chose to consolidate its Los Angeles Thrifty headquarters with its PayLess headquarters in Wilsonville, Oregon. However, just seven months later, McAlear was ousted by the board and the chairman of Bi-Mart was hired as chief executive and chairman, with Green stepping down.[61]

In 1995, Thrifty's Ontario, California, distribution center was closed, eliminating over 300 jobs.[62] It also pulled out of Hawaii, divesting 17 stores.[56] By September 1995, Thrifty PayLess completed its departure from LA by donating its former headquarters to the Roman Catholic Archdiocese of Los Angeles.[63] By February 1996, profits had improved, Thrifty PayLess went public, and the company launched Thrifty PayLess Health Services, its pharmacy benefit management division.[56]

Sale to Rite Aid

[edit]

In December 1996, Rite Aid acquired 1,000 West Coast stores from Thrifty PayLess Holdings, creating a chain with over 3,500 drug stores.[64][65][66] The Thrifty PayLess corporate offices in Wilsonville, Oregon, were closed, and its functions were transferred to Rite Aid headquarters in Camp Hill, Pennsylvania.[67] Leonard Green maintained an 11% share of Rite Aid after the sale and was named chairman in 1999.[68]

The acquisition was not immediately successful for the company. Rite Aid took a charge on the acquisition due to the amount of debt it needed to pay off.[69] It was also slow to update its new West Coast stores and changes it made to advertising and merchandise mix slowed growth.[70] Many of these stores were also twice the size of the typical Rite Aid location, which new leadership had trouble managing.[71] Rite Aid maintained the Thrifty and PayLess stores until 1998, when all locations were converted to the Rite Aid name.[72]

By 1999, Rite Aid was looking to sell off hundreds of its stores located in Washington, Oregon, Idaho, Utah, and Colorado.[73][74] It sold 38 California stores to Longs Drug Stores.[75] However, Rite Aid fired its chairman and chief executive in October 1999.[76] By January 2000, the company's new management team called off any future plans to sell former Thrifty PayLess.[77]

Thrifty PayLess, Inc., remained an active subsidiary of Rite Aid (owning stores purchased from Thrifty PayLess),[78] as shown in the company's October 2023 Chapter 11 bankruptcy filings.[79]

On May 5, 2025, Rite Aid filed for Chapter 11 bankruptcy for the second time in 2 years, listing assets and liabilities between $1 billion and $10 billion. Rite Aid will sell all of its assets as part of its procedure, as it overcomes financial challenges such as debt, increased competition, and inflation, including Thrifty PayLess.[80]

On June 27, 2025, Rite Aid received court approval to sell its Thrifty Ice Cream subsidiary to Hilrod Holdings for $19.2 million. Hilrod Holdings is managed by Hilton Schlosberg and Rodney Sacks, who are also top executives for Monster Beverage.[81]

Thrifty Ice Cream

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Main article: Thrifty Ice Cream
Single scoop of Circus Animal Cookies ice cream on a cake cone, showing the distinctive flat-topped, flat-sided shape of the scoop as typically served at Thrifty Ice Cream dispensaries

Since 1940, Thrifty Drug Stores had manufactured its own brand of ice cream and charged customers an extremely low price for a single scoop of ice cream that was usually eaten inside the store as a loss leader to entice those customers to bring their entire families into the store on a regular basis to eat ice cream that was sold at or below cost while those same customers browse the aisle (while eating) and usually find other items to purchase before leaving the store.[82] The tradition continued on in the former Thrifty Drug Stores after Rite Aid purchased the pharmacy chain in 1996.

Notes

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References

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[edit]
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Thrifty PayLess

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Thrifty PayLess, Inc. was an American holding company in the retail pharmacy sector that operated chains of drugstores primarily in the western United States from 1994 until its acquisition by Rite Aid Corporation in 1996. The company was formed through the merger of two longstanding pharmacy chains: Thrifty Drug Stores, which originated as Borun Brothers, a sundries and proprietary drugs wholesaler incorporated in 1919, and opened its first retail outlet in Los Angeles in 1929 before reorganizing as Thrifty Drug Stores Co. in 1935 and going public in 1945 with 63 locations; and PayLess Drug Stores Northwest Inc., which began with its inaugural store in La Grande, Oregon, in 1939, expanded to nine outlets by 1945, went public in 1967, and was listed on the New York Stock Exchange in 1969. Thrifty grew through acquisitions such as the Big 5 sporting goods chain in 1971 and Pay 'n Save in 1988, while PayLess expanded by purchasing 22 Value Giant stores in 1976, 61 Oakland-based PayLess stores in 1980, and additional Osco Drug locations in the late 1980s after being acquired by Kmart Corporation for $500 million in 1985. By the time of the 1994 merger—facilitated by investor Leonard Green & Partners, who had acquired Thrifty from Pacific Enterprises in 1992 and PayLess from Kmart—Thrifty PayLess operated over 1,000 stores, employed 33,000 people, and generated annual sales of $4.65 billion, with headquarters in Wilsonville, Oregon. The merger aimed to create a stronger competitor in the consolidating pharmacy industry, but Thrifty PayLess faced challenges including integration difficulties from differing corporate cultures and external pressures like the , which damaged several Thrifty stores. In October 1996, Rite Aid announced its $2.3 billion purchase of the company (including assumption of $890 million in debt), which expanded Rite Aid's footprint to over 3,500 stores across 26 states and enhanced its West Coast presence amid rising competition from discount retailers and . Following the acquisition, rebranded most Thrifty PayLess locations under its own name, effectively ending the independent operation of the chains.

Origins of Thrifty Drug Stores

Founding and Early Expansion

Thrifty Drug Stores originated from the wholesaling business Borun Bros., incorporated in 1919 by brothers Harry and Robert Borun along with their brother-in-law Norman Levin in , . The trio leveraged their experience in distributing sundries and proprietary drugs to enter the retail sector during the late 1920s economic challenges. In , they opened their first retail drugstore at Fourth and Broadway in , initially operating under the name Thrifty Cut-Rate Drug Stores to highlight its focus on discounted pricing for everyday essentials. The early stores emphasized a value-driven model, offering affordable and products, pharmaceuticals, and sundries at cut-rate prices made possible by the founders' wholesale connections, which allowed them to bypass traditional markups. This approach appealed to budget-conscious consumers during the , with the stores featuring broad selections including liquor, appliances, and sporting goods alongside traditional drugstore items. By the early 1930s, Thrifty had expanded to multiple locations across , adopting innovative retail practices such as displays to streamline shopping and further reduce costs. In 1935, the company reorganized as Thrifty Drug Stores Co., Inc., solidifying the Thrifty brand as a symbol of accessible, low-cost personal care and household goods. Expansion accelerated through the 1930s and 1940s, with Thrifty targeting high-traffic urban areas in the region to build a dense network of outlets. The company's stores often included soda fountains that served as community hubs, enhancing customer loyalty while promoting affordable treats like . A key milestone came by 1945, when Thrifty operated 63 stores, all primarily in and demonstrating strong profitability from the outset. By the early 1950s, the chain approached 100 locations, setting the stage for further diversification into non-pharmacy ventures while maintaining its core emphasis on economical drugstore services.

Diversification and Corporate Evolution

In the 1960s and 1970s, Thrifty evolved from a regional drugstore chain into a diversified conglomerate known as Thrifty , expanding into non-pharmacy retail sectors to broaden its streams. Store formats grew larger, averaging 20,000 square feet by the late , and incorporated broader merchandise assortments including liquor, electrical appliances, auto parts, and general discount items to attract a wider customer base. By 1970, these efforts contributed to annual sales of $325 million and earnings of $7 million. A key aspect of this diversification involved strategic acquisitions of specialty retail subsidiaries. In 1971, Thrifty acquired , a California-based chain with 18 stores focused on sporting equipment and apparel, which it expanded aggressively to 48 stores by 1978 and 62 by 1982. In 1976, the company took a 40% stake in Akron Stores, a discount variety chain specializing in imported goods and home decor, eventually gaining full ownership before selling it in 1982 to investors. These moves positioned Thrifty as a multifaceted retailer, with pharmacy operations comprising only part of its portfolio. In 1986, Thrifty Corporation was acquired by Pacific Lighting Corporation, a major , in a -for-stock merger valued at $875 million, converting each Thrifty share into 0.802 shares of Pacific Lighting . This transaction integrated Thrifty's retail assets into Pacific Lighting's (renamed Pacific Enterprises in 1988) diversified holdings, aligning with the 's strategy to expand beyond energy into consumer goods amid in the utilities sector. Under Pacific Enterprises, Thrifty continued operations but faced challenges from retail sector pressures, leading to further acquisitions like the 1988 purchase of the 147-store chain for valued at $232 million. By the early 1990s, Pacific Enterprises sought to divest its non-core retail businesses amid financial strains, culminating in a 1992 led by investment firm . The deal, valued at approximately $275 million, transferred Thrifty Drug Stores and several smaller operations to the buyers, while was sold separately to ; Pacific recorded a $475 million after-tax for the reduced value of these assets in the first quarter of 1992. The acquiring entity was renamed TCH Corporation, retaining Thrifty's approximately 370 drugstores primarily in and refocusing on as the dominant business line, where prescription sales increasingly drove profitability. This strategic pivot emphasized core competencies in healthcare retail, shedding diversified subsidiaries like , which was sold off in 1992 to a group.

Origins of PayLess Drug Stores

Founding and Independent Growth

PayLess Drug Stores was established in 1939 with the opening of its first discount drugstore in . The chain emphasized low prices on pharmaceuticals and everyday goods, targeting working-class customers in rural and small-town communities. In 1945, Peyton assumed leadership, driving rapid expansion by acquiring and opening additional locations. By the mid-1940s, the company had grown to nine stores across , Washington, and , focusing on the Pacific Northwest's underserved markets. Under Hawes, PayLess adopted a format that allowed customers to browse and select items independently, enhancing efficiency and accessibility while broadening merchandise to include non-pharmaceutical products like household appliances. The 1960s and marked significant independent growth, with the chain reaching 25 stores by 1967 through consolidation of affiliated operations into PayLess Drug Stores Northwest Inc., which went public in 1967 and was listed on the in 1969. By 1978, it operated 77 stores, primarily in (31), Washington (27), and (3), with initial forays into (16); sales reached $298 million that year. Further expansion in the late 1970s and early included entry into and markets, pushing the total beyond 100 stores by the decade's end while maintaining a family-influenced ownership structure under and associates. This period of autonomous development solidified PayLess as a regional discount leader until its acquisition by in 1985.

Acquisition by Kmart

In 1985, Corporation acquired PayLess Drug Stores Northwest Inc. for approximately $509 million, gaining control of a chain operating 164 drugstores across , , Washington, , and . This move integrated PayLess into 's expanding discount retail empire, allowing the subsidiary significant operational autonomy while leveraging the parent company's resources for growth. Under ownership, PayLess expanded rapidly, reaching more than 500 stores by 1994 through a combination of new openings and acquisitions. Notable expansions included the 1987 purchase of 24 Osco Drug stores and an additional 52 in 1991, marking the chain's 300th store milestone in 1990, as well as the 1992 acquisition of 124 outlets, which extended PayLess into and strengthened its presence in and . A second opened in , in 1986 to support this scaling, with sales climbing to $1.89 billion by 1991 and prescription revenues capturing over 30% market share in key regions. The early 1990s brought significant challenges for PayLess amid fierce competition from emerging national discounters like and Drug Emporium, as well as pharmacy offerings in superstore formats from and itself, which eroded margins and intensified price pressures. Compounding these issues were Kmart's corporate financial strains, including five straight quarters of earnings declines by fiscal and a need to raise $1 billion in equity in 1991 to bolster liquidity. Facing these headwinds, began preparing to spin off PayLess in 1993 as part of a broader strategy to divest non-core assets and refocus on discount department stores, ultimately agreeing in late 1993 to sell the 572-store chain to TCH Corporation—the parent of Thrifty Drug Stores—for more than $1 billion in cash, notes, and assumed debt. This transaction, completed in 1994, allowed PayLess to regain independence while marking a $100 million loss for on the original investment.

Formation and Operations of Thrifty PayLess

The 1994 Merger

In 1994, TCH Corporation, the parent company of Thrifty Drug Stores following its 1992 by , announced its intent to acquire PayLess Drug Stores from Corporation in a deal valued at $1.16 billion. The transaction, proposed to consolidate Thrifty's 494 stores primarily in with PayLess's 572 locations across the Northwest and other western states, aimed to form a major regional drugstore operator with over 1,000 outlets and combined annual sales exceeding $4.7 billion, positioning it as the second-largest U.S. chain after . Regulatory approval from the was secured on February 25, 1994, after TCH agreed to divest five stores in overlapping markets in , , and Washington to address antitrust concerns. The merger was completed in April 1994, resulting in the creation of Thrifty PayLess Holdings, Inc. as a private . Initially headquartered in , , the new entity relocated its corporate offices to , at the former PayLess facility later that year to integrate operations more effectively. Leadership was drawn from both sides, with Tim McAlear, previously PayLess's president and a executive, appointed as CEO, while Leonard Green of — the investment firm that controlled TCH and held majority ownership post-merger—served as board chairman. This structure leveraged the complementary strengths of the chains, with Thrifty's focus and PayLess's presence, to build in the competitive western U.S. retail market.

Store Operations and Market Presence

Following the 1994 merger between Thrifty Drug Stores and PayLess Drug Stores, Thrifty PayLess adopted a dual-brand strategy that preserved the established Thrifty name in and the PayLess name in the , allowing each to maintain regional while benefiting from shared corporate resources. This approach facilitated a unified and centralized services, with purchasing and accounting functions consolidated at the company's headquarters in , to streamline operations across the combined network. Thrifty PayLess stores operated as traditional combination drugstores, emphasizing prescription pharmaceuticals alongside health and beauty aids, general merchandise such as appliances and sporting goods, and services like photo labs to attract everyday shoppers. By , the chain encompassed approximately 1,000 stores across 10 Western states, with the heaviest concentration in (under the Thrifty banner), , and Washington (under PayLess), extending into markets like , , , , , and . This footprint positioned the company as a dominant regional player, particularly in underserved urban and suburban areas where it competed with smaller independents and emerging national chains. The merged entity's market presence solidified its status as the second-largest drugstore chain in the United States, with annual sales reaching about $4.7 billion by 1995, driven by expanded revenues that accounted for over 30% of total sales through efficient inventory management and third-party payer contracts. In key regions like and the , Thrifty PayLess captured significant competitive positioning by leveraging its dense store network and focus on affordable, accessible healthcare, contributing to improved profitability despite initial integration hurdles. Post-merger innovations included the implementation of centralized computerized purchasing systems to optimize the and the 1996 launch of Thrifty PayLess Services, a division that enhanced unified prescription processing and third-party reimbursement capabilities across all locations. These operational enhancements supported consistent service delivery, such as expanded hours in high-traffic stores, bolstering the chain's efficiency and in competitive Western markets.

Acquisition by Rite Aid

The 1996 Deal

In October 1996, Rite Aid Corporation announced its agreement to acquire Thrifty PayLess Holdings Inc. through a stock-swap transaction. The deal, valued at approximately $1.3 billion in Rite Aid stock—or up to $2.3 billion when including Thrifty PayLess's assumed debt—aimed to significantly expand Rite Aid's footprint on the West Coast. As part of regulatory approval, Rite Aid agreed to sell approximately 200 stores in North and South Carolina to address antitrust concerns. Rite Aid, already the nation's largest drugstore chain with around 2,500 stores primarily in the eastern and midwestern United States, sought the acquisition to achieve nationwide scale and establish dominance in western markets where Thrifty PayLess operated over 1,000 stores resulting from its 1994 merger. The transaction would increase Rite Aid's total to more than 3,500 stores across 26 states, solidifying its position as the leading chain on the West Coast. Under the terms, Thrifty PayLess shareholders received 0.65 shares of Rite Aid common stock for each share they held, based on Rite Aid's closing price at the time of announcement. The acquisition received necessary regulatory approvals and was completed on December 13, 1996, with Thrifty PayLess merging into Rite Aid.

Integration and Rebranding

Following the completion of 's $1.3 billion acquisition of Thrifty PayLess in December 1996, the integration process focused on standardizing operations across the combined network of approximately 3,800 stores. began installing new computer hardware and systems in all Thrifty PayLess locations to align with its centralized inventory and management protocols. This technical overhaul laid the groundwork for broader operational synergies, including unified supply chains and merchandising strategies. The rebranding effort began in early 1998, with announcing plans to change signage at all 1,007 remaining Thrifty PayLess stores in and nine other Western states within approximately 90 days, marking a visible shift from the legacy brands. Most stores were converted to the banner by late 1998. Accompanying the name changes were extensive renovations, including the addition of drive-thru windows and 24-hour pharmacy services at select locations, to modernize the store formats and enhance customer convenience. By the early , the acquired stores had fully adopted 's branding, fixtures, and layout, though some physical elements of original signage lingered at a few locations into the 2010s. To eliminate redundancies and optimize the network, shuttered about 100 outdated Thrifty PayLess stores in 1998 as part of a broader consolidation plan, while opening 150 new locations and replacing another 100 over the subsequent two years. This rationalization reduced overlap in high-density markets like , where approximately 450 Thrifty and PayLess stores operated pre-acquisition. The transition affected Thrifty PayLess's workforce of over 31,000 employees, with committing to retain the vast majority of store-level staff while closing the , headquarters and laying off about 2.5% of the total (primarily administrative roles). Employee programs were implemented to familiarize staff with 's policies, and union agreements helped mitigate disruptions for and retail workers. Separate from the pharmacy rebranding, retained the Thrifty brand post-acquisition (until its sale in 2025), preserving its production facility in , and offering the brand's signature flavors in stores during the integration period. Customer loyalty programs from Thrifty PayLess were phased into 's emerging wellness initiatives during the late , allowing cardholders to transfer discounts and prescriptions seamlessly to minimize disruption.

Legacy and Thrifty Ice Cream

Thrifty Ice Cream Brand History

Thrifty Ice Cream originated as a feature of the Thrifty Drug Stores chain, which was founded in by brothers Harry and Robert Borun and their brother-in-law Norman Levin in , . The stores quickly gained popularity for their soda fountains, where customers could purchase cones for just five cents, establishing an affordable treat that complemented the drugstore's cut-rate pricing model. By 1940, Thrifty began manufacturing its own at a small factory in West Hollywood after acquiring the Borden Ice Cream Company facility, marking the formal launch of the brand with an original recipe using fresh local milk. Initial flavors included distinctive options such as concord grape-pineapple, rocky road, and fruit cake, which helped differentiate it from competitors and contributed to its reputation as a premium yet accessible product. Over the following decades, the brand expanded alongside the drugstore chain, achieving cult status on the West Coast by the 1970s through celebrity endorsements and consistent quality, with production relocating to a larger plant in El Monte in 1976. The operation grew into a standalone , with scoops served not only in Thrifty stores but also in select independent ice cream parlors, including locations in . Following the 1994 merger that formed Thrifty PayLess, Inc., the brand integrated into the larger entity, and in 1996, Corporation acquired Thrifty PayLess, retaining Thrifty as a . By the 2000s, it operated across more than 300 locations primarily within stores, while broadening distribution through wholesale channels. Thrifty Ice Cream's product lines evolved to include pints and quarts sold in supermarkets like and , as well as novelties such as sandwiches and bars, alongside wholesale supply to other retailers beyond the parent chain. The earned over 1,600 gold medals in international dairy competitions for its flavors, emphasizing real ingredients like fresh , cookies, and .

Post-Acquisition Developments and 2025 Sale

Under 's ownership, the Thrifty Ice Cream brand continued to expand significantly in the 2010s, reaching over 500 locations primarily within stores in and other Western states, even as the parent company's pharmacies underwent rebranding from the Thrifty name. By 2010, production at the dedicated facility supported ice cream sales in approximately 599 outlets, alongside wholesale distribution to select grocers and restaurants, solidifying its status as a regional staple despite the broader shift away from Thrifty-branded drugstores. Rite Aid's financial challenges intensified with its initial Chapter 11 filing in October 2023, which prompted widespread store closures that directly impacted Thrifty Ice Cream outlets. Over the following years, the company shuttered more than 500 locations nationwide as part of efforts, reducing its footprint from around 2,000 stores to roughly 1,200 by early 2025 and eliminating numerous in-store ice cream counters, particularly in where the brand had deep roots. A second filing in 2025 accelerated the liquidation process, further threatening the brand's presence amid Rite Aid's ongoing operational downsizing. Rite Aid completed the closure of all its remaining stores nationwide in October 2025, marking the end of its operations after over 60 years. In June 2025, amid Rite Aid's liquidation proceedings, Hilrod Holdings LP—controlled by executives from Corporation—emerged as the winning bidder for in a court-supervised , agreeing to purchase the for $19.2 million. The U.S. Bankruptcy Court for the District of approved the sale on July 1, 2025, following the selection of Hilrod on June 27, allowing the transaction to proceed and preserving the brand's manufacturing operations and . This divestiture ensures 's continued availability in and sets the stage for potential independent growth, with the new owners announcing plans to broaden distribution channels and introduce additional flavors while maintaining the brand's traditional recipes and signature square scoops.

References

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  18. https://finance.yahoo.com/news/kmart-once-iconic-empire-decimated-191101122.html
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  20. https://www.supermarketnews.com/foodservice-retail/retail-roundup-1994-01-10
  21. https://www.latimes.com/archives/la-xpm-1994-02-25-fi-27261-story.html
  22. https://www.nytimes.com/1996/10/15/business/rite-aid-to-buy-thrifty-payless-for-1.3-billion.html
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  25. https://www.southcoasttoday.com/story/business/1996/10/15/rite-aid-buys-west-coast/50630450007/
  26. https://www.baltimoresun.com/1996/12/13/rite-aid-completes-acquisition-of-thrifty-for-244-billion-deal-gives-firm-largest-drug-chain-on-west-coast-2/
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  28. https://www.tampabay.com/archive/1996/10/15/rite-aid-acquires-competitor/
  29. https://wwd.com/fashion-news/fashion-features/feature/article-1126740-1772833/
  30. https://www.washingtonpost.com/archive/business/1996/10/15/rite-aid-to-acquire-rival-thrifty-payless/9b94b52b-9e5a-45db-a1f6-f8170b8e4328/
  31. https://www.spokesman.com/stories/1996/dec/14/thrifty-payless-merger-completed/
  32. https://www.company-histories.com/Rite-Aid-Corporation-Company-History.html
  33. https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/businesses-and-occupations/rite-aid-corp
  34. https://www.latimes.com/archives/la-xpm-1998-jan-15-fi-8451-story.html
  35. https://www.wsj.com/articles/SB845319135816450500
  36. https://www.abc10.com/article/news/local/california/national-ice-cream-month-thrifty/103-4ecb1312-62e0-4117-8774-ca47f43b55ba
  37. https://la.eater.com/2023/10/17/23870912/thrifty-ice-cream-factory-los-angeles-el-monte-rite-aid
  38. https://www.thriftyicecream.com/about-us/
  39. https://www.latimes.com/business/la-fi-thrifty-ice-cream-20180518-htmlstory.html
  40. https://signalscv.com/2018/05/rite-aid-plans-to-keep-thrifty-ice-cream/
  41. https://www.ocregister.com/2010/09/17/sneak-peek-inside-thrifty-ice-cream-factory/
  42. https://www.newsweek.com/thrifty-ice-cream-rite-aid-bankruptcy-locations-2078517
  43. https://www.usatoday.com/story/money/2025/10/03/rite-aid-closes-all-locations/86501439007/
  44. https://www.law360.com/bankruptcy-authority/articles/2358799/rite-aid-picks-19-2m-bid-for-thrifty-ice-cream-in-ch-11
  45. https://www.fooddive.com/news/monster-energy-execs-purchase-ice-cream-business-for-192m/752567/
  46. https://www.pszjlaw.com/bankruptcy-court-approves-rite-aids-19-2-million-sale-of-thrifty-ice-cream/
  47. https://www.usatoday.com/story/money/food/2025/07/01/thrifty-ice-cream-sold/84437266007/
  48. https://www.usatoday.com/story/money/food/2025/08/10/thrifty-ice-cream-monster-energy/85600411007/
  49. https://www.fooddive.com/news/monster-energy-execs-aim-to-expand-thrifty-ice-cream/757416/
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