Walgreens closures open the door for San Francisco’s neighborhood pharmacies

‘I think you’ll see more independents start to pop up’

Nick Shoman has worked at Charlie’s Pharmacy since he was 12 years old, when his parents bought the storefront on Fillmore Street and Golden Gate Avenue. He started helping out on the floor and quickly began to learn the names of customers.

Nearly 35 years later, Shoman now runs the operation with his brother, and the family-owned drugstore has become a staple in the neighborhood.

Shoman knows his regulars and their families, and he calls his pharmacist, Hank Chen, the “best in San Francisco” because he spends time with every customer to offer personalized care and consultation. Charlie’s Pharmacy partners with nonprofits nearby to provide delivery and bulk orders. Shoman will occasionally agree to refill prescriptions on credit to customers facing financial hardship.

Shoman says that’s a far cry from the likes of Walgreens, which recently announced plans to close five locations in San Francisco.

“At a chain store, customers are just numbers,” he said.

Walgreens blamed the latest wave of closures on unchecked retail theft, an explanation that sparked a slew of headlines questioning the legitimacy of the claims and further deepened the fault lines in The City’s acrimonious debates over crime.

A Walgreens at 300 Gough St. is among San Francisco stores closing due to ongoing retail theft. (Kevin N. Hume/The Examiner)

A Walgreens at 300 Gough St. is among San Francisco stores closing due to ongoing retail theft. (Kevin N. Hume/The Examiner)

Yet, even San Francisco — which is known to be uniquely tough on chain retailers — has relatively little influence over Walgreens, or any other corporate retailer, when it comes to closing up shop. That reality has left officials flailing for recourse and struggling to carve out a path forward to prevent something similar from happening again.

Independent drugstores could be one way to fill the void left behind by corporate outlets in some communities.

Owners can make a good living, and the stores offer customers tailored services and attention that they might not find at chain competitors, according to David Valencia, manager at Reliable Rexall Sunset Pharmacy.

“I think you’ll see more independents start to pop up,” he said.

Pharmacist David Valencia of Rexall Drugs in the Inner Sunset hopes to capitalize on the departure of some Walgreens outlets in San Francisco. (Kevin N. Hume/The Examiner)

Pharmacist David Valencia of Rexall Drugs in the Inner Sunset hopes to capitalize on the departure of some Walgreens outlets in San Francisco. (Kevin N. Hume/The Examiner)

Any control The City does have over the flow of businesses in and out of the marketplace comes through the permitting process overseen by the Planning Commission.

For example, San Francisco’s formula retail ban prevents businesses with more than 11 locations from opening in certain neighborhood commercial districts such as Hayes Valley, North Beach and Chinatown, though exemptions can be granted.

Chains such as Walgreens must secure a conditional use permit to operate in most other places — which requires extensive review by the Planning Commission to determine impact on the surrounding neighborhood — and sometimes requires mitigating actions from the applicant.

Supervisor Aaron Peskin even proposed legislation in July that would make it harder for a new business to replace a laundromat. The goal is to protect laundromat owners from predatory landlords and prevent further closure of these operations whose numbers are dwindling.

None of these interventions, though, compel a business to stay open or incentivize a certain type of storefront — such as a pharmacy — to take over a vacancy.

Valencia, who has over 40 years of experience in the pharmaceutical industry, including time spent at multiple major chains, wants to get the word out that independent drugstores can compete with their chain counterparts.

Rexall was once a widespread national chain, but it was dismantled in the 1970s after being sold to private investors. Some franchised locations, like the one on Ninth Avenue and Irving Street, were allowed to continue using the name but have no association with the former behometh and are now operated independently.

At Rexall, Valencia offers personalized consultations with customers, delivers products to elderly residents in the neighborhood, stocks specialty health care products and advertises wellness coach opportunities. He says the store has entrenched itself in the community by developing meaningful, lasting relationships with returning customers.

“Walgreens isn’t really competition,” he said. “We can offer specialty products that most chains don’t have, and we are more nimble.”

From left, pharmacist David Valencia worked alongside pharmacy technicians Adam Le and Marc Adriano at Rexall Drugs on Oct. 19. (Kevin N. Hume/The Examiner)

From left, pharmacist David Valencia worked alongside pharmacy technicians Adam Le and Marc Adriano at Rexall Drugs on Oct. 19. (Kevin N. Hume/The Examiner)

These standout qualities can only be offered, though, once the business is up and running. That’s a costly and time-consuming process that has historically put many larger, formula retailers at an advantage over smaller merchants.

San Francisco has already taken steps toward easing the burden on local merchants over the course of the pandemic: Proposition H streamlines the permitting process and enhances flexibility for new small businesses. Shared Spaces allows businesses to operate more readily in parts of the public realm. And Mayor London Breed backed legislation to provide $5 million in fee waivers, relief and deferrals.

Valencia and Shoman would like to see even more support. They say it stands to not just help individual merchants, but to reinvigorate entire commercial corridors by preventing vacancies and bolstering foot traffic — which itself could be a deterrent against the kind of retail crime Walgreens cited as reason for its departure.

“There are a lot of businesses that have closed during the pandemic, and it does affect me because I used to get some of that foot traffic,” Shoman said. “When I have vacant businesses around me, it doesn’t help me or benefit anyone.”

In the name of economic recovery, other potential solutions have focused more on enforcement.

Supervisor Ahsha Safai, whose district is home to one of five soon-to-be-shuttered Walgreens locations in the Excelsior, introduced legislation in September that would allow sheriff’s deputies to work as security guards for hire at private businesses while off duty.

This option is already made available to officers at the San Francisco Police Department, so the program would just extend the opportunity to law enforcement officials in the sheriff’s office.

“If we don’t deal with this … we’re not going to make people feel safe about coming back to The City,” Safai said. “We have to get our arms around this. I, by no means, want to go back to the era of over-incarceration, but this has to stop.”

As far as fixes go, though, doubling down on enforcement isn’t considered by everyone to be the best path forward, even by those who acknowledge organized retail theft continues to plague The City.

“This is part of why it’s so important to understand why, in fact, they are closing, and not just accept their representations at face value,” District Five Supervisor Dean Preston said. “It’s hard to propose the solution around the closure of this or other stores without information about why they’re closing.”

Residents and elected officials alike voiced frustration with Walgreens surrounding the wave of closures. They framed the decision as a choice for the drugstore to abandon the community and leave seniors, families and other individuals who rely on pharmacies nearby their homes without warning.

“It’s a neighborhood where residents, particularly seniors and other vulnerable community members, rely on having a pharmacy nearby,” Preston said, of the 300 Gough St. location’s closure. “It’s a big loss for the community.”

By contrast, independent drugstores tend to be tight-knit partners in the community.

“We’re not about the bottom dollar,” Shoman said. “We are pretty compassionate when it comes to our clients.”

cgraf@sfexaminer.com

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