ENCINITAS — After 38 years in business, the buyout of the Rancho Park Pharmacy by CVS Caremark last month leaves only one independent pharmacy in Encinitas. Brothers (Dr.) Justin and Jason Sabouri, owners of North Coast Medical Pharmacy at 477 N. El Camino Real, are turning to the community with “a call for action” to support local businesses.
“CVS is one of the biggest contributors to getting rid of independent pharmacies,” Jason Sabouri asserted. “They painted a target on us.”
Sabouri explained that the 2009 merger of CVS, a pharmacy, with Caremark, a pharmacy-benefits manager, is driving independent pharmacies out of business because of a drug refill program that restricts where customers can buy prescriptions.
“Part of (CVS Caremark CEO Tom) Ryan’s strategy to fuel sales is to buy the very companies complaining about him,” wrote Carol Wolf of Bloomberg News on June 11, 2010. “This month he said CVS Caremark will purchase about 200 independent pharmacies a year to spur market share growth. The outlets would then be folded into the existing store base, he said.”
Noah Wieder was a Rancho Park Pharmacy customer for 10 years until it closed.
“I was shocked,” he said. “I didn’t know they were having trouble. I went there because they had short lines, good service and comparative pricing. If there was a wait, it was only 15 to 20 minutes. CVS takes forever and they are not nearly as knowledgeable.”
Wieder said he is continuing to support other homegrown businesses including Postal Depot.
“Franchises are typically overpriced, and rarely do you see an owner in the store,” he said. “If you do, they are handcuffed by ‘corporate’ to add products or services outside their agreement, even if customers ask for it.”
Ash Nickle is manager of Postal Depot, which is owned by Aj Vasvani. Nickle reports a bump in business following the closure of nearby Rancho Park Pharmacy.
“People are trickling in, and the priority now is to get more mailboxes,” he said. “Customers like the fact that they we offer a street address (instead of a post office box).”
This month Postal Depot will go through a renovation to accommodate their copying and shipping services. Nickle says shipping prices usually beat the competition because of flexibility many franchises aren’t able to offer. Another draw for customers is Nickle’s expertise as an eBay seller.
The lifeblood of the business, however, are notary services.
“I’ve done 38,000 notaries in eight years,” Nickle said. “I get the weird ones that other notaries turn away, and lots of referrals from banks. I charge $8, which is less than many others, and I’ll negotiate a lower rate for large volume.
“We are a mom and pop business, truly independent. There is no corporate hierarchy, so anything good or bad that happens falls on us.”
Russell “Rusty” E. Griffith, president of Encinitas Business Xchange, outlined advantages to dealing with private owners.
“Small, independent businesses generally come through with better and more personalized service, greater expertise and a ‘direct line’ to the business owner for questions and concerns,” he said. “The small business owner also often has greater access to alternative products rather than ‘off the shelf’ goods of a big box and can often be flexible in negotiating price.”
In an informal survey of 35 members and guests at their May meeting, Griffith said that one-third reported business remaining the same as last year while two-thirds said it improved.
Jason Bennett has also seen the Encinitas franchise of Flippin’ Pizza grow since purchasing 51 percent ownership in the store three years ago. After bringing it out of the red, he bought his partner out. Today, he is opening additional locations in San Marcos and 4S Ranch with his new partner, Flippin’ Pizza founder Patrick Farley. Flippin’ Pizza is based in Carlsbad.
Bennett credits the company’s success to premium ingredients, dough that is made daily and a commitment to the neighborhood. Instead of buying television ads, 90 percent of the marketing budget goes to local schools and the community.
“We give free pizzas to nonprofits for fundraisers, and really don’t turn anyone away,” Bennett said. “The way to generate business is with a phenomenal product and good will — and we’re doing both.”