This Walgreens on Shattuck is moving within two blocks of a CVS store
This Walgreens on Shattuck is moving within two blocks of a CVS store

[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.

Frances Dinkelspiel

Frances Dinkelspiel (co-founder) is a journalist and author. Her first book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman Created California,...

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59 Comments

  1. Hmmm, Since cannabis sales are not allowded within 1,000 ft. of schools or churches does not the same apply to liquor stores and pharmacies which, by the way  cause of thousands of deaths & murders annually ? If the dispensaries are banned ( marijuana kills nobody ) then liquor stores and pharmacies must be banned, too .

  2. Can’t imagine how a competitor coming in now could be anything but good for consumers. Jobs, tax revenue, and parking. Sounds about right for both Shattuck and Gilman/San Pablo locations.

  3. This particular Lucky had a doorway that opened onto Shattuck; It was at a 90 deg. angle to the tower. I don’t believe it would ever appeared to be a graphic element of the tower.
    As an aside I found a (now destroyed) 2 square tower in Palo Alto.

  4. the third square was a window at ground level it’s since been covered up when longs or bills came into the building it is a facade of brick i think.

  5. Actually there are only two; the then current crop of Berkeleyites felt that the typical three squares was too prominent and disruptive to their peace and harmony. A compromise was reached and this may have been the only Lucky with a circumcised tower.

    A side note: The Lucy Tower was designed by Raymond Lowey, a leading American industrial designer. You may not be familiar with him but another of his designs is the sleek and timeless 1053 Studebaker.

  6. the three squares on the building represent 3 square meals lucky was trying to promote (look at the big sign structure).

  7. there should be a law that says…one horrible politician should not work within 1000 ft of another. that would eliminate our city council completely!!!!!

  8. And exactly what has Walgrens done in opening a store on Shattuck that requires the proposed regulation? Set up a large tax generator for the City of Berkeley? How can you equate the proposed legislation with pollution and environmental degradation? Of course, if the government is responsible for a river, it can deny anyone the right to dump toxics into that river. This, however, is just a case of we don’t like your business — your customers notwithstanding — or we like your competitor better, so we will preclude you from competing in our town. What right does the City of Berkeley have to preclude any legal business which is found not to be an physical detriment? “You can’t come int to our community because the governing force at the moment doesn’t like you.” Outrageous!

  9. In a better approximation of a perfect free market that might be true but in the real world small-town retail sector, it isn’t. The chains can dominate the price of local rents for comparable businesses. The chains can dominate the price of wholesale (and give themselves a distinct advantage which they leverage to in turn dominate retail). The chains can afford to speculate like mad, subsidizing stores at a loss, driving out locals, and all before the chain’s store turns a profit. (Telegraph, Moe wrote, went through a period like that with lots of chains moving in, locals being lost, and then the chains leaving since they weren’t making enough money.)

    It’s really not just a case of “are locals willing to pay a little extra for better service and local ownership”…. it’s “are locals willing to pay a LOT extra for better service (but less reliable inventory)…. ” And its a LOT extra because this isn’t a perfect free market and the chains are so big they control a lot of key prices that, in a perfect free market, they would not control.

  10. In a better approximation of a perfect free market that might be true but in the real world small-town retail sector, it isn’t. The chains can dominate the price of local rents for comparable businesses. The chains can dominate the price of wholesale (and give themselves a distinct advantage which they leverage to in turn dominate retail). The chains can afford to speculate like mad, subsidizing stores at a loss, driving out locals, and all before the chain’s store turns a profit. (Telegraph, Moe wrote, went through a period like that with lots of chains moving in, locals being lost, and then the chains leaving since they weren’t making enough money.)

    It’s really not just a case of “are locals willing to pay a little extra for better service and local ownership”…. it’s “are locals willing to pay a LOT extra for better service (but less reliable inventory)…. ” And its a LOT extra because this isn’t a perfect free market and the chains are so big they control a lot of key prices that, in a perfect free market, they would not control.

  11. Let’s see, you’re elderly you live in No Berkeley, you shop at Walgreens and you want to walk. There’s an old barn of a building sitting vacant and useless and Walgreens hires people to rebuild the building, pay city permit fees, hires staff, pays sales taxes and provides a service. Of course the site was a pharmacy before so that wouldn’t be the problem. So what’s the problem here that the city needs to fix?

  12. Oh the irony, I remember in the late 80’s people up in arms about the LACK of pharmacies in Berkeley, particularly west Berkeley where I lived (~near Columbus school). There was a sort-of pharmacy at SP and Uni, and Bills @ Rose & Shattuck, and that was about it. Now we have Walgreens and CVS popping up like a case of bad acne.

    Berkeley’s zoning is well intentioned, but out of sync with the realities of national retail. As much as we’d like to see things play out according to our own idealistic model it’s just not going to happen. Time to get real with the choices at hand, and start working within the boundaries of reality.

  13. What I hate most about CVS, Walgreens and their ilk is the push to sell their crappy version of a product. I don’t necessarily object to store labels, but when I buy them and find them to be totally useless I want other choices the next time I go to buy that product. It’s gotten so bad that I order many things from Drugstore.com not because I really want to but because I can’t find the products I want in most Bay Area drugstores. I’m seeing less and less choice in more and more stores especially in the chains. If we don’t work hard to encourage independent store ownership, we’re going to see the same limited choices every where we go.

  14. I have to agree. I’ll take a pharmacy I don’t need over an empty building any day of the week.

    I can’t believe that the old ROSS building on Shattuck next to the Downtown Berkeley BART station is still empty.
    That ought to be a prime real estate location, and instead it’s just blight.

  15. More specifically, one of 5 board seats went to a large investor in CVS, a second of 5 board seats went to a CVS guy. CVS was telling the WSJ that it was a “strategic investment” and that they (CVS) would be active (in undisclosed ways) running the company. Presumably founders and initial investors got some cash out in these deals. The second-round investors were likely both aligned and had 2/5 control. Doesn’t it seem likely that first round investor interest on the board would swing more towards those guys… giving them about 3/5 (so the founders are kinda sorta not in control any more, at that point)?

    So the two of you (Eric and Fact) are kinda both right, I think. They didn’t “sell it to CVS” as most people would understand that. But they did as entrepreneurs would understand it. They didn’t fail by “spreading themselves too thin” but weak returns on that effort to grow drove how investment capital treated them:

    Presumably none of the very first stores was going to be profitable enough anytime soon to give the early investors the exit they wanted — hence the push for growth via additional stores (which is pretty normal). The investment from CVS suggests that the growth wasn’t (by that time) looking so good but also not a total fail — still no nice exit was in sight for early investors it was a tough situation in which to find second round investors. The founders want an exit, probably. The first round investors want an exit. There’s some value in there somewhere….. Hence why they brought in strategic investors CVS and a fund with some strong interest in CVS … and why that was reported to be a very “hands on” and “strategic” investment. CVS was saying from the get go, essentially, “We won’t be surprised if we lose money on this. We have larger designs on the thing.” They were suggesting either they could turn it around with CVS pixie dust or at least come out of it with desirable assets.

    You point about “Capitalism tends to monopoly,” stands up very well here. If all that the original investors wanted to do was to make a viable business and hopefully get at least a modest return — they firm would have been run differently. Because of the nature of the finance market in US capitalism, simply making it a viable business with a modest return would be regarded as a failure by first round investors (large risk taken for, what, passbook savings returns?). Conversion of the firm to a “strategic asset” to a market behemoth like CVS – even if CVS will lose a little money but make strategic gains – looks in retrospect like a way to make pulling the plug less painful and take a crap-shoot of avoiding it. At the cost of consolidation.

    Did the timing of the shut-down influence CVS’ move into N. Berkeley and/or vice versa? A question for the ages, I guess. Gee, it could have been a coincidence.

  16. Albert, while I agree that the market is a strong democratizer, it is not perfect. Pollution and other negative environmental impacts are often externalized, long-term and complicated, and consumers may not have access to all the necessary information. Businesses are driven by making profit, both corporations and local businesses (although a the owner(s) of privately held business can make decisions that will lower their profit while corporate boards are charged with maximizing profits and can be fired if they stray too far from this path).

    Also, we do live in a society of laws. We may laws that regulate people because sometimes they do things we don’t want them to; the same is true for businesses.

    (sorry, I’m just getting used to this bulletin board system. “leetramp” is the same person as Lee Trampleasure)

  17. I drive to Emeryville or El Cerrito at least four or five times a month to shop at chain stores that haven’t been allowed to set up shop in Berkeley.
    Those tax dollars could stay here in Berkeley, but unfortunately they go to different cities.

  18. With all due respect, Fact Based, your statements about Elephant farm are incorrect.

    “Founders were short of capital,” i.e. they weren’t making a profit. The company was not sold to CVS. Rather, in 2005 Elephant Pharm tried to raise capital from several sources and CVS was one of these investors. Even with this infusion of cash, Elephant Pharm couldn’t stay afloat, so it closed in spite of CVS’s investment, not because of it. Elephant Pharm blamed it’s closure on the poor economy, but in all likelihood, Elephant Pharm had also spread itself too thin, opening too many locations too quickly. I also think there were risks in catering to such a niche market–even in Berkeley.

  19. In their defense, I think the service suffers most due to their being understaffed–something over which staff have little control. Whenever I have asked a staff member for help they’ve been nothing but courteous and accommodating; they’ve even done magic on the registers to make sure that my coupons have applied properly when the machine doesn’t recognize them.

  20. A market is the most democratic determination of how people feel about a specific good or service. We all vote every day when we choose to place our dollars here or there or leave them in our pockets. If Berkeley truly is not in favor of chain-type stores, they will fail. The local communards claim to know what is best for us and are perfectly willing to place their judgment above that of the marketplace. What hubris! The new-age Elephant Pharmacy should have been a perfect fit for Berkeley and yet it failed. The big name drug stores are supposed to be so unBerkeley and yet they thrive and want to open more stores. Does the market work? Starbucks and Barns and Noble are two of the oft-maligned chain operators and they were in fact driven out of town. The Starbucks on Shattuck at Cedar is gone and so is the B&N downtown which is now a Staples. If consumers do not like what is offered by a given business, it will fail. If they do, who are a few know-it-alls to say they cannot do business where they are clearly welcome to a sufficient number people to make a go of it?

  21. Yes, Payless/Longs were much better than CVS, however CVS is being forced out of the Broadway location because Safeway controls the lease and is building a megastore there, as well as trying to build another megastore at College and Claremont and expanding its store on North Shattuck. . Another data point: the new N.Shattuck Safeway might want to add a pharmacy and probably sells liquor already– and it’s been represented by Dion Aroner’s lobbying firm. Aroner used to work for Bates before she rotated through his assembly seat, later taken by his wife. Another pharmacy would be competition for N. Shattuck Safeway Small town politics– very baroque. Just sayin’…

  22. Elephant didn’t “put itself out of business”. It was sold to CVS when the founders were short of capital, and CVS closed it down suspiciously close to the time it bought the Long’s chain and took over the North Shattuck store. Capitalism tends to monopoly.

  23. “…maybe some cheapo kitchen implements…”

    This focus is part of the problem. So many people want everything at low prices. Economies of scale give advantages to large businesses, with then result in longer drives to big stores, and increased parking/traffic problems in neighborhoods around these larger stores. If you want small local businesses, you have to be willing to pay slightly higher prices. Most neighborhood shopping districts in Berkeley had pharmacies, hardware stores, etc. They went out of business because people drove their cars to get lower prices elsewhere (and, landlords can get higher rent out of cookie cutter “boutique” stores where Berkeleyans seem to love to shop).

  24. Can one of these pharmacies please come to Elmwood/Claremont? We have nothing in walking distance now that Elmwood Pharmacy is a bistro. And Elmwood Hardware is gone. I promise not to complain about chain stores or cheap beer. And I will not forsake Star Market either. I just want a better selection of toilet paper and maybe some cheapo kitchen implements without getting into my car, OK?

  25. They have moved the liquor at TJs to both sides of the sample counter (its a little odd not having all the liquor together), though the beer and wine remain as they were. With the beer in the afternoon sun I might add, much to my dismay.

  26. At this point anything that comes into an empty Berkeley store that is even moderately useful is a plus. But it is so sad to see that pretty store with it’s plants and wood and such being gutted to make a store that looks like all others. But the Elephant has left the building and Coop Hardware isn’t coming back.

  27. Interesting. I visit that Trader Joe’s location occasionally and haven’t noticed any problems. I’ll have to look closer the next time I’m there.

    Good point about locating the alcohol near the door — A very poor planning decision. I’m surprised they haven’t changed it.

  28. It was a Co-op hardware store and camping store for many years. It only closed when the whole Co-op closed and I imagine it was profitable, although obviously I don’t know. Then it was a Copelands, which also folded with the chain.

    Sadly, I remember when Thrifty had nickel ice cream cones.

  29. Our city fathers and professional “aginners” (those agin everything) need to get their heads out of their collective orifices and realize that you cannot have it both ways with businesses. You cannot hold up small local start up businesses with onerous regulations and permitting atrocities and expect them to be in Berkeley, when Albany will welcome them with open arms and a short turn from lease to opening day, then say “no no” to the only businesses that can wait out our bureaucracy, which are big businesses with some capital. Our city is fairly cash starved, one way to fix this is to fill up our rapidly increasing vacant business locations. And not with expensive boutiques and fancy dancy dog stores, but with stuff we need daily -socks, underwear for our kids, the things we go to – yes, Target, for.

    Side note to Solano businesses afraid of Goodwill – The people I know with the most money shop at thrift stores, that is why they have money – Let’s get these storefronts filled and doing business, collecting sales tax.

  30. I’m glad to see another pharmacy there to compete with CVS. The empty building will be generating jobs and tax revenue. There is nothing to complain about.

  31. Seems to me that a building like the old Elephant Pharmacy does not have many potential uses except as a pharmacy. If it were illegal to open a pharmacy there, the building would probably remain vacant.

    Pharmacies generally are local shopping for everyday merchandise. No reason to reduce their availability.

  32. Exactly.

    And people always complain that “we used to have a hardware store on Solano…” Walgreens is not a hardware store, but similar in nature, and yet some folks seem against it?

    Has anyone considered what this might do to Andronicos across the street? Could have an impact.

  33. the walgreens by berkeley bowl was a thrifty drug store before. they had those 39 cents a scoop ice cream cones.

  34. Conditions and operating standards can easily be attached to an use permit.

    Trader Joes does have problems, check for the empties in the alcove on the University side of the store.

    The store also has a big alcohol theft problem because the company did not consider the local context when designing the shop, the alcohol is right next to the exit of a busy intersection, and in close proximity to fathomless services.

    Again, if the city want to make accurate finding informing use permits, make use of the AOD data collection system the police dept has available.

  35. I find it strange that this particular location getting a Walgreens has created some sort of call to arms against new pharmacies. Elephant Pharmacy wasn’t chased out, it put itself out of business; this location was a pharmacy before and will be a pharmacy again. No, it won’t be a locally-based mom and pop outfit, but holding out for one of those would be like waiting for Godot.

    I don’t see how any of the recent pharmacy additions have been a negative for the city. It used to be that the only option downtown was the one and only Walgreens–a situation which drove me to shop at Target in El Cerrito for most toiletries and household items. The addition of Long’s was a breath of fresh air: they had a bigger, nicer store than Walgreens, as well as better service and prices. This even eventually led to Walgreens finding religion and lowering some of their own prices. Even though I miss the greater selection and somewhat better service of Long’s, CVS offers reasonable prices and good sales, and continues to force Walgreens to price more competitively. Go to either of these stores just about any time of day and you will find them busy–so it’s not as if demand is lacking. Under the proposed restriction, the downtown Long’s now CVS would have been barred from opening in its current location–something I feel would have been a detriment to the vitality of downtown. Moreover, if we are promoting walkability, shouldn’t we be supportive of more neighborhood-serving drug stores, at least up to a point?

    The Walgreens near Berkeley Bowl has been there as long as I can remember–which is admittedly not that long here in Berkeley–and the Walgreens near campus, in a way, replaced the exorbitantly priced Rexall that used to be in the space now occupied by Sam’s Market. None of this would seem to point to an unbridled proliferation of drug stores.

    Yes, Walgreens is a chain and Berkeley has a fear of chains matched only by San Francisco and Ebenezer Scrooge, but is this really that big a deal? It’s not threatening a local store, it’s not really a change of use, the building’s not changing that much, and North Shattuck fills a vacant storefront. The proposed restriction seems like it might be cutting off our nose to spite our face. I think the fact that this site is remaining a one-story use with a surface parking lot is much more troubling than the fact that it will now be a Walgreens. Why not instead focus on making sites like this mixed use?

  36. Would it be possible for the City to approve their alcohol permit, but ban them from selling malt liquor and “fortified wine”?

  37. Walgreen’s national business plan includes the sales of very cheap beer, google Walgreens and Beer.

    Be prepared for more street drunks napping on the sidewalks.

  38. The better question is, what won’t lead to new restrictions in Berkeley?

    Banning discount “general merchandise stores” from Berkeley doesn’t mean Berkeleyans don’t shop at them. It just means that people like me drive to Emeryville to shop at stores like Home Depot, IKEA, Target, etcetera.

  39. Payless, originally, before it was a Longs.

    Berkeley won’t be Berkeley is Walgreens and CVS dominate. We do much better as consumers with smaller and home grown businesses.

  40. so sad that long’s is closed. they had the best selection of stuff, even the coolest flip-flops. cvs seems loaded with a bunch of generic junk and has no personality. and the service sucks.

  41. “Pharmacies in Berkeley, like elsewhere, also sell groceries, stationary 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. ”

    At last week’s ZAB hearing Bates’ appointee voted in favor of Walgreens alcohol use permit for Gilman St location. Seems the Mayor appointee needs some education.

    ZAB commissioners voted in favor 6-2 for the use permit, in conflict with the City’s staff report and ignoring the requirement to make a determination of public convenience and necessity since the area is already saturated with alcohol use permits.

    http://www.ca-cpi.org/docs/publications/Other/CARS_PCorN.pdf

  42. The customer service at the CVS at Shattuck and Rose is execrable (which wasn’t the case when it was Long’s). If having competition down the street improves that, good.

  43. CVS is closing its huge store in Rockridge at 51st and Broadway.

    First of course, they destroyed the store by cutting down the stock. Then they wondered why sales were down.

    Sad end of a great store.

    And the answer to Andrew Day is that if we do not limit chains, they will put local merchants out of business and severely cut down what we can obtain. I think this is an overwhelming consensus in Berkeley.

  44. Stop [capitalist] competition by any means necessary. Credo of micromanaging city bureaucrats, most of whom, like Mayor Bates himself, have never held a real job in the private sector.

  45. This is the same sort of micromanaging zoning restriction that’s led to a rash of empty storefronts on Solano Avenue. And how does any politician have the right to decide, on behalf of Berkeley residents, where they should shop and what they should buy?