A drugstore that would not compete on price: the bet on dispensing (2000)

Until the contrarian answer became the mainstream

The core of this decision is that the company consciously stepped out of its industry’s tailwind. Drugstores in the 1990s competed on cheapness and floor space, and the harder you rode that competition, the faster you grew. The Sugiuras turned their backs on it and made prescription dispensing — work no one but a pharmacist can do — the pillar of every store. It is a thin-margined, cost-heavy road. In an age when discounting was the mainstream, the two of them bet on their own licences and on the long current of separating prescribing from dispensing. It was a choice that put their own reading ahead of the industry’s common sense.

The reading was not rewarded quickly. Separation of prescribing and dispensing stalled for years, and a strategy staked on dispensing looked premature. Nor did the national chain come at the speed they had pictured. But as consumer interest moved from price to expertise, and as the day approached when even convenience stores could sell over-the-counter medicines, the advantage of a store without a dispensing counter thinned away. It took more than ten years for the contrarian answer to become the mainstream one. The character of this decision lies less in moving early than in holding the same answer for a long time. Which business are we? To that question, the couple never let go of the answer they gave on opening day.