Rite Aid gets a boost after Amazon announces customers will be able to pick up packages at the drugstore (RAD)

Reuters/Noah Berger

Amazon launched a package pickup service in Rite Aid stores Thursday.
Rite Aid shares gained as much as 8% on the news. By the end of the year, the service will be rolled out to 1,500 locations.
The partnership will help increase Rite Aid traffic and boost Amazon’s brick and mortar presence.
Watch Rite Aid trade live on Markets Insider.

Being linked to Amazon is giving Rite Aid drugstores a shot of momentum.

Shares of the retailer climbed as much as 8% Thursday on the news that it inked a deal to be a pickup location as part of Amazon’s new service called "Counter." Shoppers will be able to pick up their Amazon packages at more than 1,500 Rite Aid locations by the end of the year, according to a release.

The drugstore is the latest retailer to be added to Amazon’s growing network of pickup locations. The online retail giant already has programs in place with Kohl’s and Best Buy where consumers can purchase and return Amazon products such as the Fire TV in stores.

Customers will only be able to pick up from Rite Aid locations, not return or exchange items. The service will be free to use, and those living near eligible locations will soon see the option to pick up at the drugstore when they check out on Amazon.com. Many items including clothes and appliances will be available to pick up in stores, the company said.

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Rite Aid is hoping the deal will increase foot traffic to its stores and boost sales over time. As online shopping ramps up even for everyday household items, stores with a large brick and mortar presence have struggled; in the most recent fiscal year, Rite Aid’s operating loss was $667 million.

The company also recently replaced three top executives including the CEO after a bid to merge with Albertsons, a grocery store chain, was rejected.

Amazon has found an easy way into brick and mortar retail by partnering with Rite Aid to expand its footprint which includes thousands of self-service stations across the US. Having an in-store presence will help Amazon compete against Walmart and Target.

Shares of Rite Aid are still down nearly 50% year-to-date.

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