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Rite Aid (RAD) is wrong, wrong, wrong!

Last year, actually 18 months ago now, James Cramer had enough faith in the Rite Aid Corp (NYSE: RAD) to include it in his 2007 picks. At that time the stock was trading for $5.49 per share. It closed yesterday at $1.56 and is trading further down today.

When I say RAD is wrong, wrong, wrong, I mean it literally. There is a store located a few blocks from my office that I shop at perhaps once a month. Yesterday I bought a few things and was amazed at how bad their accounting was.

My primary mission was to acquire some toothpaste, but there are always a few tempting sale items. When I was checking out I discovered that the sports drink for sale at "5 for $5 dollars" was a mistake and the sign in the store display should have been taken down because the offer had expired. Another item I purchased was marked down from $3.99 to $1.99, great deal! . . . but they told me that the sale price was placed on the wrong shelf for that product and what I wanted was not on sale.

In fairness, I must admit they honored both goofs and I received the bargains (only to leave the money at the gas station later), but that's not the end of the story.

When I was leaving the check stand, a staff member came up the the manager and informed her that upon opening her register it was short $20. So how can this company survive while it is so fraught with errors, losing money from every angle?

One more bad sign: every month when I go to the store I never see the same staff.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares in RAD.

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Last updated: August 27, 2008: 09:20 PM

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