It's not unusual for all 15 cash registers at Bernie Shulman's drug store to be going at once, with a dozen people, each pushing overflowing shopping carts, standing in front of each register waiting to be checked out.
Bernie Shulman's is a drug store with an unusual low-pricing policy that brings customers to this Cleveland suburb in droves. When the door was unlocked on a recent Saturday, for instance, 124 persons filed in before the door closed.
A check of Shulman's prices shows why. Comparing them with the prices at Washington area drug stores--which are a little higher than those in Cleveland--reveals that Shulman's "regular" prices are generally between 25 percent and 60 percent below those in Washington.
Take a few items from a 24-item survey. A package of four Eveready heavy-duty size AA batteries costs 96 cents at Shulman's, $1.79 at Drug Fair and Dart Drug and $2.57 at People's. A package of five disposable Bic razors sells for 65 cents at Shulman's, $1.17 at Drug Fair and $1.29 at People's. A Cricket lighter is 40 cents at Shulman's, 49 cents at Dart Drug but generally 99 cents other places. A 14-ounce bottle of Vick's Nyquil is $3.70 at Shulman's, $4.99 at Dart, $5.59 at Drug Fair and $7.25 at People's. Reach toothbrushes are 87 cents at Shulman's, between $1.29 and $1.49 in Washington. A 13-ounce size of Nivea Moisturizing Lotion was sold for $1.49 at Shulman's and for $3.94 at Dart.
The price comparisons cut across all the stock--cosmetics, health and beauty aids, household and kitchen products, auto products, stationery supplies, snacks. Shulman's also has a very busy prescription drug counter.
Despite the low prices, Theresa "Terry" Shulman, president of the company, declines to use the word "discount" to describe her burgeoning business. It doesn't describe the store or her pricing policy, she says. In the discount business generally, she explains, a percentage is taken off the list or manufacturer's suggested retail price of an item to give the consumer the "discount" price.
At Shulman's, however, every item sold is treated the same: the price of an item is based on its net cost and a standard mark-up. Every item is marked up uniformly. In the business ordinarily, items are marked up by widely-varying percentages. At Shulman's, the list or suggested price is not taken into consideration. And nothing is sold as a loss-leader--below cost--requiring something else to be marked up by a larger percentage.
That the policy results in lower prices for the consumer is obvious to shoppers here, whose only complaint seems to be, "I always spend more than I plan here because everything is so cheap," as one customer said.
Customers here find most of the major nationally advertised products other drug stores carry--but not quite everything. Because some items in the drug business are "notorious" loss leaders, Shulman says, she doesn't carry them. She cited 12-ounce Maalox, Tampax 40s, and Crest Toothpaste in the 7-ounce size as examples. "Those are items you won't find in the store unless we come across a good buy," she said. However, she does carry other sizes of some of the same products.
"In order to carry a loss leader, you have to make it up somewhere else. . . . I can't afford to handle those items," the 49-year-old owner of the company says. "I'm only interested in carrying items that will give consumers a break." A product may sell somewhere else at a lower price, but usually because the store is offering it on special--and the price break will be made up somewhere else, she says.
Shulman's buying policy also appears to be different. "Our philosophy is to buy from deal to deal," she explains. Not content with buying items at the wholesale prices, Shulman waits until the manufacturers offer their periodic special "deals" giving the retailer 8 1/3 to 25 percent off the normal wholesale list price.
Generally, the retailer can buy as much of the product as he or she wants, and that's what Shulman does. If the store is out of an item it normally carries, Shulman admits that that is because she misjudged and did not buy enough. Customers might also find that a price falls if Shulman gets a better deal on a product; the standard markup is taken strictly on the net cost, so the savings will be passed on to the customer.
The only major manufacturer of health and beauty aids that won't permit her to buy from deal to deal is Procter & Gamble, she says, so their products, which include some normally big sellers, such as Crest toothpaste, Prell shampoo and Secret deodorant, are not on the store's shelves.
Shoppers don't lack from selection, however. When Shulman's opened here six years ago, it took over the space occupied by a former supermarket: 15,000 square feet of selling area and a warehouse on the premises with an additional 20,000 square feet. The investment in inventory is substantial, and boxes of goods appear to line every inch of space along stairs, halls and stock rooms.
Shulman's carries little seasonal merchandise, except suntan lotions and bug sprays. There won't be artificial Christmas trees or lights, nor lawn chairs, barbeque sets, charcoal and lighter fluid, for instance. "We generally carry the same stock," Shulman says. "We'll carry an in-and-out item if we run across an unusually good buy." Customers at Shulman's pay cash or by check, but not credit card--the cost of credit would have to be built into the prices and would penalize those who want to use cash, she says.
Bernie Shulman's was the brainchild of, not suprisingly, Bernie Shulman, Terry Shulman's late husband. The founder of the Revco Discount drug chain in 1956, he had revolutioned the drug business, bringing significant and widespread discounts to that industry for the first time. Becoming a millionaire by 1968, Shulman spent seven years "in retirement" with his wife in California until 1975, when the new drug store--with its new pricing concept--was started.
Terry Shulman took over the business in 1976 after her husband disappeared. He was later found dead in California, a suicide.
It's a seven-day-a-week business for Shulman, who is often joined by her two daughters and their families. Occasionally a baby--a grandchild--can be found sleeping in a basket in the office while everyone works. Because the company is privately held, Shulman doesn't divulge its annual sales or profits. "I can tell you our rate of growth is about 25 percent," she says. "There obviously has to be a leveling off . . ."
The first of its kind, the Shulman's concept is now being copied by a drug franchising firm based in Columbus, Shulman says. She is also part owner of a similar-style, smaller drugstore in Sarasota, Fla.