Niche deep discounters find strategies to survive; Navarro strengthens foothold

Drug Store News, Jan 3, 1994 by Mike Troy

MIAMI -- Bigger isn't necessarily better when it comes to being a successful deep-discount chain. One prime example is Miami's Cuban-owned Navarro Discount Pharmacies, which has grown methodically since its founding in 1961 as a single, 800-square-foot store to seven units generating sales approaching $60 million.

The off-price chain's recently opened seventh unit, the first outside a predominantly Hispanic neighborhood, was greeted by swarms of customers. "I would like to get as big as we can," said chain president Jose "Pepe" Navarro, but he added that he approaches expansion cautiously, preferring to open a new store only after existing units are well in the black.

Familiar faces

Customers are attracted to Navarro stores by low prices, familiar faces and a traditional product mix supplemented by a large housewares department and a food set stocked with numerous Hispanic items.

"We have merchandise fully stocked all the time, whereas other deep discounters have something one day and then not the next," Navarro said. "We carry a lot of different brand names because the Hispanic customer is extremely brand loyal."

That brand loyalty extends to pharmacy as well; the Navarro pharmacies fill between 400 and 500 scripts a day at most locations. "We will not substitute generics unless we are specifically requested by the customer to do so," Navarro said. "We let them know the price and the amount of savings, but many times they feel you are trying to switch them to something inferior."

Personal service is another advantage of Navarro's size. "We are very service-oriented... we also hire from within and a lot of our employees have been here for quite a few years, and I think that has a lot to do with the success we've had," the chain founder said.