Local pharmacies need to specialize even further to fight off increased competition from giants like Shoppers Drug Mart and Loblaws Inc., say independent pharmacy owners.
Richard Diniz, owner of Hooper’s Pharmacy, said that the $12.4 billion Shoppers Drug Mart buyout announced by Brampton-based Loblaws Inc. Monday means that independent establishments like his need to focus even more on exclusive products and service.
“Our advantage, if we do have any, is personal service,” Diniz told YourMississaugaBiz.com from his location on Lakeshore Road East. “And we try and find the niche areas they cannot service very well,” he said of the larger chains, two of whom have now merged.
Diniz pointed out that after 29 years of increasing competition from stores like Walmart and newly launched Target Canada, he and many other independents have managed to survive. “As long as we do a good job of running our business, we should be okay,” he said.
And while independents don’t have the same kinds of resources as big pharmacy chains, Diniz stressed it is important they be active and innovative in order to stay competitive.
Years ago, Hooper’s started stocking more specialized vitamins and supplements to help fight the increasing competition from other drug stores. “But now some of the chains are really paying attention,” Diniz said. “Now Loblaws is trying to go to another level.”
As a result, Hooper’s has moved into smaller areas like naturopathy and supplement lines that aren’t offered at major grocery stores or pharmacy chains.
“We’re too small to compete with them directly, so we have to find areas where we’re a little bit different.”
Another thing independent pharmacies are doing to further raise their chances of survival is by partnering with doctors and opening small shops next to clinics.
“If you have a store that’s 5,000 square feet or more, that’s a danger area,” Diniz said. “At that size, it’s hard to say you’re an independent and you’re not a chain.”
In addition to recommending operating a store 2,500 to 3,000 square feet in size, Diniz strongly recommended independent pharmacy owners network with doctors to ensure a steady stream of referrals for prescriptions and regular foot traffic.
“You have to, and that’s what you’re seeing a lot more with independents in the last five years,” he said.
And while a lot of the pharmacy chains have also adopted this tactic, Diniz said not every doctor wants to work with them. “The challenge is to find those connections,” he said. “Just like consumers, some of them just like shopping at independents. We have to search them out somehow and let them know we are different.”