Value Giant

Thrifty PayLess Holdings, Inc.

Company type	Holding company
Industry	Pharmacy retail
Predecessor	Thrifty Corporation, PayLess Drug Stores Northwest, Inc.
Founded	April 1994
Fate	Acquired by Rite Aid in 1996
Headquarters	Los Angeles , United States
Area served	Western United States

Thrifty PayLess Holdings, Inc. functioned as a pharmacy holding company overseeing the Thrifty Drugs and PayLess Drug Stores chains throughout the western region of the United States. This entity emerged in April 1994 following the acquisition of PayLess Drug Stores Northwest, Inc. by Los Angeles-based TCH Corporation, which was the parent company of Thrifty Corporation and Thrifty Drug Stores, Inc..

At the merger's inception, Thrifty operated 495 locations, while PayLess managed 543 outlets. Subsequently, TCH Corporation adopted the name Thrifty PayLess Holdings, Inc.. The company was eventually acquired by Rite Aid in 1996.

Background of PayLess

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PayLess Drug Stores logo.

Formation and Growth

The origins of Payless Drug Stores trace back to 1932 when L.J. Skaggs established the first store in Tacoma, Washington, which rapidly expanded across the western United States. In 1939, four stores were sold to Samuel "L.S." Skaggs—L.J.'s brother—and two partners after their departure from Safeway. These outlets evolved into Skaggs PayLess Drug Stores and later integrated into Skaggs Companies. The remaining stores under L.J. Skaggs eventually became part of Thrifty PayLess.

During the 1940s, Peyton Hawes and William Armitage acquired five drugstores located in Oregon and Washington, operating under the PayLess name. They expanded this chain through acquisitions and organic growth. Hawes faced setbacks during the 1948 Vanport flood, losing two stores. By 1950, his network included 11 outlets spanning Oregon, Idaho, and Washington.

By the 1960s, three distinct companies operated under the Payless brand: one headquartered in Washington and Oregon, another in California, and a smaller four-store chain based in Tacoma, Washington. As of 1961, Hawes controlled 12 stores in Oregon, four in Washington, one in California, and one in Idaho.

In 1967, Pay Less Drug Stores Northwest transitioned into a publicly traded company. Discussions to merge began as early as 1971 between the 32-store Skaggs Pay Less Drug Stores of Oakland and the 39-store Pay Less Drug Stores Northwest of Portland, with plans to unify under the Pay Less Stores name by dropping the Skaggs brand.

The company expanded further in 1973 by acquiring Seattle's House of Values and Portland's Gov-Mart Bazaar, creating PayLess House of Values. In 1976, it purchased 21 Value Giant stores located across Northern California, Oregon, and Washington. The acquisition of PayLess Drug Stores based in Oakland, California was completed in 1980. By 1984, Pay Less achieved $1 billion in annual sales.

Acquisition by Kmart

In 1985, Kmart acquired Pay Less Drug Stores Northwest Inc., which operated 164 locations, for $509 million as part of an expansion strategy led by CEO Joseph Antonini. By 1986, the number of PayLess stores had grown to 225. Two years later, in 1987, the company expanded by purchasing 25 Osco Drug outlets across California, Idaho, Oregon, and Washington. In 1990, PayLess further extended its footprint by acquiring Pay Less based in Tacoma, Washington. At this stage, the chain was active in nine states across the western United States before its parent company was eventually purchased by Rite Aid and the stores underwent rebranding.

In 1992, PayLess took over 124 Pay 'n Save locations situated in Washington, Alaska, Hawaii, and Idaho from Pacific Enterprises. By 1993, PayLess ranked as the tenth-largest drugstore chain in North America with operations spanning twelve Western states. However, in August of that year, Kmart announced plans to divest PayLess to focus more intently on its primary discount retail business.

Thrifty's Background

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Thrifty had developed a range of proprietary products reflecting its size and market presence.

Thrifty Drug Stores

In 1919, Harry and Robert Borun, together with their brother-in-law Norman Levin, established Borun Brothers, a drug wholesale business based in Los Angeles. By 1929, the Borun siblings had launched their own retail chain under the name Thrifty Cut Rate Drug Store in Los Angeles. The inaugural location was situated at 412 S. Broadway in downtown Los Angeles, directly opposite the original Broadway Department Store.

Following the opening of five more outlets within the downtown area, Thrifty inaugurated its seventh store in 1931 at the newly constructed Pellissier Building located at the intersection of Wilshire Boulevard and Western Avenue in the Mid-Wilshire district. This marked their first expansion beyond downtown Los Angeles, quickly followed by several additional locations within a few miles radius.

By 1942, Thrifty Drug Stores had grown to encompass 58 stores, increasing to 78 by 1948. When the company celebrated its 100th store opening in Studio City in 1950, its presence extended from as far north as Santa Rosa, California down to San Diego. The brand ventured beyond California for the first time in 1952 with a new store in Las Vegas. In 1959, Thrifty further expanded into the Pacific Northwest by opening a location in Eugene, Oregon.

Grand openings for Thrifty stores were notable events often featuring prominent politicians alongside film and television stars. For instance, actor Errol Flynn took part in the inauguration of the South Pasadena branch in 1941. Additionally, a neon-lit Thrifty Drug Store sign can be spotted in a scene from the 1954 Judy Garland film A Star Is Born.

Throughout the 1950s, a catchy Thrifty jingle was broadcast on numerous Southern California radio stations:

<poem>

Save a nickel, save a dime. Save at Thrifty every time. Save a dollar and much more,

at your Thrifty Drug Store!</poem>

Expansion and Diversification under Thrifty Corp.

In the early 1970s, the parent company of Thrifty initiated diversification efforts beyond the pharmaceutical retail sector by acquiring Big 5 Sporting Goods, a chain specializing in sporting goods, in 1972. Gradually, Thrifty ventured into general merchandise through incremental investments in the The Akron retail chain, initially purchasing a 40% stake in 1976, which increased to 90% by the following year and ultimately reached full ownership.

To better represent its broadened business portfolio, which now included non-pharmacy enterprises such as Big 5 Sporting Goods and The Akron, Thrifty Drug Stores Co. Inc. rebranded itself as Thrifty Corp. in 1977.

Throughout the 1980s, Thrifty expanded its reach further by forming joint ventures with East Coast-based Dart Drug and its founder Herbert Haft. These collaborations introduced brands like Crown Books and Trak Auto to the West Coast market. In 1981, Thrifty acquired a 50% stake in Crown Books and launched several bookstore locations around Los Angeles. By 1982, the company divested the 21-store Akron chain to investors from Hong Kong. The following year, Thrifty obtained a half ownership in Trak Auto and opened multiple auto parts stores within the Los Angeles region.

In Washington State, due to an existing drugstore chain already using the Thrifty name, the company initially operated under the name Giant T before adopting the Thrifty brand in 1984.

In early 1986, Thrifty acquired two additional regional drugstore chains: the 15-store Drug King in January and 13 Guild Drug outlets in March. These were subsequently rebranded as Thrifty Jr. stores. At this point, Thrifty Corp.'s portfolio comprised approximately 550 Thrifty Drug stores alongside 90 Big 5 Sporting Goods locations, with partial ownership interests in Crown Books (187 stores) and Trak Auto West (72 stores). That same year, the company also expanded into sports retail by acquiring the Gart Bros brand.

Acquisition by Pacific Lighting

In May 1986, Thrifty Corp. was purchased by Pacific Lighting, which also owned Southern California Gas. At that point, Thrifty's portfolio consisted of 555 Thrifty drugstores, 27 Thrifty Jr. outlets, and 89 Big 5 sporting goods locations. One of the initial actions taken by the new owners was to divest Thrifty's investments in Crown Books and Trak Auto West. Two years later, in 1988, Thrifty expanded its operations by acquiring Pay 'n Save and Bi-Mart. As part of this expansion, all Thrifty stores located in Washington state were rebranded under the Pay 'n Save name.

By the close of the 1980s, the company—now operating as a division of Pacific Enterprises—was experiencing financial losses. The resignation of its long-serving president in 1990 marked the beginning of a series of leadership transitions that extended into the early 1990s. Throughout this period, executive turnover included several key appointments and departures. In 1991 alone, Thrifty Corp. reported a net loss totaling $164 million.

Management buyout

In 1992, Pacific Enterprises decided to exit the retail sector by divesting the majority of Thrifty Corp.'s brands to the investment firm Leonard Green & Partners for $275 million through a management buyout. This transaction encompassed Thrifty Drug Stores, Bi-Mart, Big 5 Sporting Goods, Gart Bros., and MC Sporting Goods. Meanwhile, PayLess Drug Stores, owned by Kmart, acquired Pay n' Save.

At that point, many Thrifty outlets were outdated and required modernization. The new leadership separated the sporting goods divisions into an independent operational unit. Additionally, Thrifty withdrew from the Arizona and Nevada markets, shutting down all locations in those states during 1992. Within twelve months, the chain's footprint was reduced by approximately 20%. By 1993, Thrifty ranked as the sixth-largest drugstore chain in North America, operating 497 stores primarily based in California.

Thrifty PayLess Holdings

In December 1993, reports indicated that Kmart planned to sell its Payless drugstore chain—comprising 572 stores—to the owners of Thrifty Drug Stores. The deal involved $592 million in cash, $100 million in debt securities, and a 47% ownership interest in TCH Corporation, a newly formed holding company managed by Leonard Green that included Thrifty, Payless, and Bi-Mart. To satisfy regulatory requirements, TCH divested several stores located in California, Oregon, and Washington, as well as over 200 outlets across North Carolina and South Carolina.

The merger was finalized in April 1994 with the establishment of Thrifty PayLess Holdings, Inc.. At this time, Thrifty operated 495 stores while Payless had 543 locations; combined, they ranked second in drugstore sales nationwide. During 1994, Payless closed 40 stores across nine states. It took approximately 18 months for Thrifty PayLess to integrate the point-of-sale and warehouse management systems of both chains.

Tim McAlear from PayLess was appointed as CEO of the combined entity, with Leonard Green serving as chairman. To facilitate McAlear’s leadership, Thrifty PayLess consolidated its Los Angeles headquarters with PayLess’s base in Wilsonville, Oregon. However, after just seven months, McAlear was removed by the board; the chairman of Bi-Mart was then appointed both CEO and chairman while Green stepped down.

In 1995, the Ontario distribution center in California was closed, resulting in over 300 job losses. The company also exited Hawaii by selling off 17 stores. By September that year, Thrifty PayLess completed its exit from Los Angeles by donating its former headquarters building to the Roman Catholic Archdiocese of Los Angeles. By early 1996, financial performance had improved significantly; Thrifty PayLess went public and introduced Thrifty PayLess Health Services to manage pharmacy benefits.

Sale to Rite Aid

In December 1996, Rite Aid completed the purchase of 1,000 West Coast outlets from Thrifty PayLess Holdings, resulting in a combined network of more than 3,500 drugstores. Following the acquisition, the Thrifty PayLess headquarters in Wilsonville, Oregon were shut down, with operations consolidated under Rite Aid’s main office in Camp Hill, Pennsylvania. Leonard Green retained an 11% stake in Rite Aid post-sale and was appointed chairman in 1999.

The integration initially proved challenging for Rite Aid. The company recorded a financial write-down related to the acquisition because of the significant debt burden it assumed. Additionally, the process of modernizing the newly acquired West Coast locations lagged, and modifications to advertising strategies and product assortments hindered sales growth. Many of these stores were notably larger—often twice the size—than typical Rite Aid outlets, creating management difficulties for the new leadership team. The Thrifty and PayLess brands continued operating under their original names until 1998, when all stores were rebranded as Rite Aid.

By 1999, Rite Aid sought to divest several hundred stores situated across Washington, Oregon, Idaho, Utah, and Colorado. Among these sales was a transaction involving 38 California stores sold to Longs Drug Stores. Despite these efforts to streamline operations, Rite Aid dismissed its chairman and CEO in October 1999. Subsequently, by January 2000, the company’s new leadership abandoned plans to sell former Thrifty PayLess locations.

Thrifty PayLess, Inc. remained an active subsidiary within Rite Aid’s corporate structure, overseeing stores acquired from the original Thrifty PayLess chain, as evidenced by filings during Rite Aid’s October 2023 Chapter 11 bankruptcy proceedings.

On May 5, 2025, Rite Aid filed for Chapter 11 bankruptcy protection for the second time within two years. The company reported assets and liabilities ranging between $1 billion and $10 billion and announced intentions to liquidate all assets as part of its restructuring efforts amid ongoing financial difficulties including debt pressures, heightened competition, and inflationary impacts—this process encompassed its Thrifty PayLess holdings.

On June 27, 2025, a court authorized Rite Aid to sell its Thrifty PayLess division along with the Thrifty Ice Cream brand to Hilrod Holdings for $19.2 million. Hilrod Holdings is managed by Hilton Schlosberg and Rodney Sacks, who also serve as senior executives at Monster Beverage.

Thrifty Ice Cream

File:Thrifty ice cream - Circus Animal Cookies on cake cone.jpg

A single scoop of Circus Animal Cookies flavor served on a cake cone, showcasing the signature mostly cylindrical shape with relatively flat sides and top, characteristic of scoops offered at Thrifty ice cream counters found in Rite Aid stores (formerly Thrifty Drug stores).

The Thrifty Ice Cream brand continues to thrive, available at select Rite Aid locations on the West Coast and various ice cream establishments throughout the southwestern United States, as well as in over 200 outlets across Mexico. Rite Aid retained the Thrifty Ice Cream name due to its history of numerous accolades and a strong reputation for affordable pricing, distinctive flavor options, and its trademark cylindrical scoops. Classic favorites include Chocolate Malted Krunch, Butter Pecan, Medieval Madness, Mint 'N Chip, and Rocky Road, alongside newer additions like Circus Animal Cookies, which incorporates authentic Mother's Cookies.

Within Rite Aid stores, Thrifty Ice Cream is served hand-scooped in single, double, or triple portions on sugar, cake, or waffle cones. Additionally, it is offered in pre-packaged "sqrounder" cartons—1.75-quart containers blending square and round shapes—and 1-pint cartons. Historically, packaged ice cream came in half-gallon waxed-paper boxes with interlocking flaps resembling bricks; these were phased out by early 2008.

In its early years, much like other drugstores with grills and soda fountains, Thrifty sourced ice cream from local vendors. However, as the chain expanded rapidly across Los Angeles, maintaining a consistent supply of quality ice cream at competitive prices became challenging. To address this, the Borun family purchased Borden Ice Cream Company's Hollywood factory in 1940 for $250,000 (equivalent to approximately $in today's dollars), initiating their own production.

The original Hollywood facility was replaced in 1976 by a larger 20,000-square-foot plant situated on three acres in El Monte, California. Designed to supply the 450 existing Thrifty stores and external clients, this facility initially had an annual capacity of 16 million gallons. By 2010, it produced ice cream for 599 Rite Aid outlets throughout California and wholesale customers such as Farrell's Ice Cream Parlour and Costco, which accounted for about 40% of sales. The revived Farrell's franchise conducted extensive brand testing before selecting Thrifty again as its supplier, resulting in winning the Orange County Register's Best Ice Cream award that year. Thrifty employs a flash-freezing method during production to minimize ice crystal size; the finished product is frozen at −60 degrees for at least 24 hours prior to distribution.

Since 1948, Thrifty ice cream has earned numerous gold medals at both the Los Angeles County Fair and California State Fair. Notably, by 1961 it had secured thirteen consecutive gold medals at these prestigious competitions where entries are evaluated on flavor, texture, body, sanitation standards, color, and packaging. The brand has maintained an unbroken streak of gold medals at the L.A. County Fair since 1952. In 1988 alone, Thrifty amassed 24 gold medals there—more than any other participant.

Many of Thrifty's recipes have remained consistent for over five decades, incorporating genuine fruit pieces and cookies alongside Real California Milk. Its butterfat content stands at 10.25%, slightly lower than premium competitors which range between 12% and 16% but typically cost twice as much. Historically notable prices include a single scoop costing just five cents in 1974; this rose gradually to ten cents by 1976, fifteen cents by 1981, thirty-five cents by 1991; then $1.29 in 2010; $1.69 in 2011; $1.79 in 2013; $1.99 by 2018; and $2.49 by 2023.

For decades, Thrifty Drug Stores used the extremely low price point of their single-scoop ice cream—usually consumed inside the store—as a loss leader strategy to attract families regularly into their locations. While enjoying their ice cream sold at or below cost, customers often browsed aisles and purchased other items before leaving.

Distinct from typical ice cream parlors, Thrifty Drug Stores (and later Rite Aid) utilized a unique scoop design producing flat-topped cylindrical scoops (as shown above). This signature scoop was not commercially available until 2019. A reviewer from Food & Wine praised it as "the last ice cream scoop you'll ever buy."

In 1994, Thrifty Ice Cream products obtained Kosher certification, further broadening their market appeal.

Since 1995, Bon Suisse—a company based in Poway, California—has held exclusive rights to use the Thrifty brand name. They distribute approximately 800,000 gallons annually across the Southwestern U.S., Mexico, Latin America, and the Middle East. By May 2018, Bon Suisse was supplying nearly that volume yearly to restaurants, hotels, ice cream counters, grocery chains, and even some correctional facilities within California, Arizona, Nevada, and Mexico.

As of May 2014, Helados Thrifty—the licensed operator in Mexico—managed 184 locations spread across northern and central Mexican states including Baja California, Baja California Sur, Sonora, Sinaloa, Jalisco, Colima, Nayarit, and the State of Mexico. Expansion plans involve increasing franchise sales throughout Mexico. All Mexican-distributed Thrifty products continue to be manufactured at the El Monte facility.

In October 2015 Walgreens announced intentions to acquire Rite Aid but had not confirmed whether it would maintain any existing Rite Aid product lines not currently sold by Walgreens—including Thrifty Ice Cream—prompting concern among fans about potential discontinuation.

Following regulatory challenges that halted Walgreens' acquisition attempt, February 2018 saw an announcement of a merger between Albertsons and Rite Aid.

Albertsons declared plans in May 2018 to retail Thrifty-branded ice cream within its grocery chains such as Vons and Safeway. However, many details remained unclear regarding whether they would retain the El Monte manufacturing plant or preserve current recipes and scoop shop operations or pricing structures. Some customers expressed apprehension that Albertsons might shutter the plant and replace authentic Thrifty products with rebranded versions of Lucerne or Signature Select store brands.

In August 2018 Rite Aid reversed course by canceling its planned merger with Albertsons to remain independent temporarily.

By May 2019 Rite Aid expanded distribution of prepackaged 48-ounce Thrifty ice cream containers—offered in up to eight flavors—to stores in Idaho, Oregon, and Washington; however scooped servings were not part of this expansion outside California. Two months later they initiated trial sales of these containers at select stores in Delaware, Maryland, New Jersey, New York and Pennsylvania.

In fall 2024 Thrifty Ice Cream partnered with Chuck E. Cheese to introduce a co-branded Birthday Cake flavor exclusively available at approximately 350 Rite Aid pharmacies in California alongside 34 Chuck E. Cheese locations in Southern California; each container included complimentary digital tickets redeemable at participating venues.

Following Rite Aid’s Chapter 11 bankruptcy filing in October 2023—which led to closure of 31 California locations featuring Thrifty scoop counters—a second bankruptcy filing occurred in May 2025. Subsequently Rite Aid announced plans to shutter all stores with scoop shops within former Thrifty Drug territories while auctioning off the El Monte factory along with the Thrifty brand name and related intellectual property on June 20; until then the brand’s future remains uncertain.

Hilrod Holdings, associated with Monster Energy, emerged as the successful bidder for acquiring Thrifty along with KPH Healthcare Services. This transaction received approval from a New Jersey bankruptcy court judge on July 1st.

Notes

• Pay Less surpasses $1 billion sales milestone in 1984 Discount Store News, July 23, 1984
• Pay Less adjusts product assortment, shutters Wonder World locations - Annual Industry Report, part 2 Discount Store News, July 18, 1988Template:Fix/category
• Thrifty PayLess profile. Drug Store News, April 28, 1997

External links

• Comprehensive history of Thrifty PayLess before Rite Aid acquisition
• Official site for Thrifty Ice Cream Mexico Archived 2014-10-06 at the Wayback Machine
• Thrifty Ice Cream at Rite AidTemplate:Fix/category
• Inside look at the Thrifty ice cream manufacturing facility (video)