Bankruptcy Forces Ice Cream Chain to Close 500 Locations

This is a tragic development for ice cream lovers in the United States, as Thrifty Ice Cream, a renowned brand with an 85-year history, plans to close 500 of its branches within its stores. The decision is based on the parent company’s continued bankruptcy, Rite Aid.

The shutdowns will be one of the most significant blows to the Los Angeles-based ice cream store, which prides itself in its cylindrical nostalgic scoops as well as experimental flavors such as Sriracha Swirl or Chocolate Malted Krunch. Though Thrifty Ice Cream is still a cult brand, its future is uncertain as Rite Aid focuses on a redeployment strategy to overcome its rising debts and operating issues.

A Storied Legacy Under Threat

The history of Thrifty Ice Cream began in 1940, in a small factory in West Hollywood, California. The brand was originally a soda fountain service at Thrifty Drug Stores, launched by Harry and Robert Borun, along with their brother-in-law, Norman Levin.

Its small-batch, high-quality ice cream soon became popular, and it won awards at the Los Angeles County Fair, establishing it as a brand with a loyal following by the 1970s. Its cylindrical scoop, which looked strange and unusual compared to the conventional spherical scoops, made the brand a unique product, as well as its unconventional flavors, such as Raspberry Cheesecake and Black Cherry.

Thrifty was acquired by Rite Aid in 1996, when the Thrifty PayLess chain of drugstores was purchased by Rite Aid and placed ice cream counters alongside hundreds of its pharmacies on the West Coast.

Customers coming in to pick up prescriptions found these counters a nostalgic feature, as they had become a staple of the Rite Aid experience. Nevertheless, the financial performance of Rite Aid, which has been under pressure due to rapid changes in the retail and healthcare segments, has jeopardized Thrifty’s presence in the shopping stores.

Bankruptcy of Rite Aid and its Bi-Ripple Effects

Rite Aid was formerly a leader in the U.S. pharmacy business that entered into its second Chapter 11 bankruptcy filing in May 2025, following its first in 2023, which was worth $2 billion and resulted in the liquidation and closure of hundreds of stores. The New Rite Aid LLC is liquidated and has liabilities in the region of between $1 billion and $10 billion, making it one of the most liable companies in the area.

In an attempt to overcome the financial crunch, Rite Aid has lined up $ 1.94 billion in new funding and is expected to shut down hundreds of its still-existing 1,240 stores, as well as auction off stocks, including Thrifty Ice Cream, and its manufacturing plant in El Monte, Calif.

The 500 Thrifty Ice Cream counters, located in Rite Aid pharmacies, cannot be sold separately because they are an integral part of the stores. Consequently, these closures are a pure effect of resizing, but Rite Aid plans to restructure its companies to trim down operations and pay debts. According to industry analysts, the move will be considered collateral damage, as the Thrifty counters, though popular, will be the ones caught in the crossfire of the financial crisis faced by Rite Aid.

What’s Next for Thrifty Ice Cream?

Although the loss of 500 in-store counters is quite substantial, the story of Thrifty Ice Cream is not bound to finish there. The intellectual property of the brand and the factory in El Monte are being put up for auction, with the deadline for placing a bid set for June 13, 2025, and the auction itself scheduled for June 20.

The possible buyer can purchase Thrifty and proceed to supply grocery chains, such as Albertsons and Vons, among others, as well as independent scoop shops across California, Arizona, and Mexico with its famous pints, quarts, and three-gallon tubs. It is also possible that a buyer might decide to reutilize the El Monte facility in another production facility; however, the nonappearance of a buyer might mean an uncertain future for the brand.

This is a positive sign because a potential buyer of Thrifty Ice Cream, Hilrod Holdings LP, headed by Hilton Schlosberg, one of the founders of Monster Beverage Corporation, had won the bid on June 26, 2025, at a mark of $ 19.2 million. This merger may secure the brand’s future and continue to supply its popular ice cream to retailers and independent stores. Nonetheless, the closure of the 500 Rite Aid counters is still underway, and the deal is still in its final stages.

A Cultural Salvaging and Responses of Fans

The closures have resonated with the die-hard following that Thrifty has enjoyed, especially in California, where the company has achieved nearly mythical levels of popularity. On social media sites such as X, fans have been crying over losing access to their local Rite Aid ice cream counter, with posts like: “Thrifty had cylindrical scoops; that was the ice cream of my childhood years, so how can they just disappear?” The carefree brand, which offers affordable prices but evokes a psychological effect reminiscent of your childhood, has seemingly become a cultural norm over many years and generations.

Neil Saunders of the firm GlobalData even said Thrifty has an uncertain future, citing that the brand still has a lot of goodwill; however, because it has been relying on Rite Aid’s infrastructure, it has made Thrifty susceptible. The fans have now been urged to look out for packaged ice cream made by Thrifty in grocery stores, or for the more traditional fans to go to the stand-alone scoop shops. Still, it is the end of an era as far as the in-store counter experience, with scoops being handcrafted before customers could see them with their own eyes.

The Big Picture: Retail in a Post-Pandemic Era

The situation at Thrifty is part of a broader trend of retail issues in the post-COVID economy. The transition to remote work during the pandemic decreased foot traffic to businesses such as Rite Aid, which previously relied on in-store purchases, including prescriptions and impulse item sales like Thrifty’s ice cream. The bankruptcy or liquidation of other chains, such as Party City, Joann Fabrics, and Forever 21, in 2025 is not an exception, as they claim they cannot cope with inflation, increased labor costs, and shifting consumer attitudes.

Rite Aid finds itself unraveling, which makes the Thrifty Ice Cream saga a rather heartbreaking reminder that even famous brands can become collateral damage in an inter-corporate battle. Until something better happens, ice cream lovers hope that Thrifty will have another beginning that will allow the company to continue the legacy it has established, one that will be passed on to our children to come.