[This story was updated on 4/19/11.]
As the retail war between CVS and Walgreens heats up in Berkeley, Mayor Tom Bates is calling for a new law that prohibits any new pharmacy from locating within 1,000 feet of another pharmacy.
Bates will ask the City Council on April 26 to consider the new restrictions. If adopted, the planning department would work to amend the city’s zoning ordinances to add the changes.
“Everywhere you turn you see a Walgreens or CVS,” said Julie Sinai, Mayor Bates’ chief of staff. Bates was on vacation and could not be reached.
“It’s happening all over the place,” said Sinai. “A Walgreens is moving into the Elephant Pharmacy [right near CVS on Shattuck Avenue]. You have Walgreens and CVS right downtown a few blocks from one another. We feel there needs to be encouragement of diversity. This proliferation of drug stores is beyond the pale.”
Pharmacy officials do not think that the government should decide the location of a store.
“We believe the market should determine the best location to operate a drugstore, not additional government regulation,” said Robert Elfinger, a media specialist for Walgreens. “Our stores also create good retail and construction jobs and contribute to the local tax base. We also believe that restrictions on businesses that create jobs are not good for the local economy.”
Berkeley zoning ordinances prohibit do not create the conditions that easily permit big-box stores, so pharmacies have moved in to fill the void, according to Dave Fogarty, Berkeley’s economic development project coordinator. While pharmacy sales account for 4.88% of retail sales in California as a whole, they account for 9.57% of sales in Berkeley, according to information in the 2007 Census of Retail Trade.
“The most logical explanation for this is simply that Berkeley does not have discount ‘general merchandise stores’ like Target, K-Mart or Wal-Mart,” said Fogarty. “Berkeley residents therefore tend to do a larger proportion of their shopping for general household goods at Walgreens and CVS. Of course, the census doesn’t tell us what people are buying, but it is unlikely that sales of drugs and pharmaceutical products themselves would be disproportionately higher here than elsewhere in California.”
Pharmacies in Berkeley, like elsewhere, also sell groceries, stationery supplies, and household goods in addition to medicine. Many are also now trying to sell alcohol, which is another reason Bates is interested in limiting their locations.
“Unfortunately, an important part of their product mix is the sale of alcoholic beverages, leading to a proliferation of off-sale alcohol permit applications,” reads a portion of the proposed ordinance.
Bates’ proposal comes up at a time when word is leaking out about another attempt by the dueling pharmacy chains to locate close to one another. CVS is apparently inquiring, according to some city sources, about leasing an old bingo parlor on San Pablo Avenue and Gilman – kitty corner from an existing Walgreens.
Last year, Walgreens took over the location of the old Elephant Pharmacy on Shattuck and Cedar – about two blocks away from an existing CVS. And there are also rumors that the Walgreens at 2187 Shattuck (near Allston) is hoping to move into the site of the old Ross store across the street, just two blocks from a CVS store.
Michael J. DeAngelis, a spokesman for CVS, said the firm has two stores in Berkeley and is not planning any new ones now.
Walgreens currently has four stores in Berkeley and is opening another on Shattuck in the near future.
