When Wal-Mart opened in Sturgeon Bay, in 1989, Meredith knew the retailing giant would make a hard run at his prescription business. It offered a $5 coupon for any new or transferred prescription. Through sources at the local paper, Meredith knew precisely when Wal-Mart would open: June 1. Both he and Rohde had hit the road in 1988, touring small towns in southern Wisconsin and Illinois to see how merchants fared in Wal-Mart's shadow. While a neighboring hardware store simply closed before Wal-Mart even opened, Meredith expanded his main store by 4,000 square feet, reasoning, "If I'm going down, I'm going down in flames."
In May, Meredith began advertising more heavily in the local media. "We lit up the radio." The medium was inexpensive, and Meredith knew that a lot of old-timers listened to the one station in town, especially the morning news. He ran ads in the newspaper carrying his pharmacists' pictures, emphasizing their experience, trustworthiness, and roots in the community. The tag line was, "Here to help you." He ran that ad for as long as Wal-Mart ran its $5 discount--an offer that Meredith vowed to match in his own ads.
Meredith then began plotting his next thrust. He needed to bring in more prescriptions, so he persuaded another independent pharmacist, the son of the man whose business he had bought, to merge with him. That would add another 50 scrips a day. Meredith figured Wal-Mart would take 50 scrips from him, so at least he'd be treading water. He then opened up more charge accounts, frozen at 300 since he had bought the business, to encourage customers to stay. The number has since soared to 1,250.
Still, Wal-Mart came in and took 18% of Meredith's business. But that was just the half of it. Meredith believes his doggedness irked the chain, and now it was payback time. The discounter hired away one of his floor managers, an employee with 10 years of experience. It also hired his lead pharmacist. That stunned Meredith. "We had a long conversation before he left," says Meredith. "He told me they bought him."
The two men were close. Now that bond was broken, replaced by forced conversations at chance meetings around town. "This really hurt," Meredith reflects. "This was like losing a friend."
Guardian Angel
A world of sundered partnerships, disloyal employees, and oppressive competitors makes for a lonely business owner. The bottom dropped out of Meredith's faith in human nature three years ago when he suspected a trusted 10-year employee of stealing. Disbelieving and knowing that he needed proof, Meredith went so far as to stake out the store at 5:30 a.m., slumped low in his wife's car across the street, binoculars ready on the seat beside him. When that yielded little, he installed a hidden surveillance camera.
The footage revealed a conflicted perpetrator--a man taking money from the till, then putting it back; a man picking up the cash box, then disappearing out of the frame. Finally, the camera did not lie. Meredith's employee confessed when confronted. He had stolen $5,500 in cash.
The lack of trust between people, the lack of conviction in them, still eats at Meredith. He now makes it a policy not to socialize with any of his partners. Ask him about personnel, and he will nudge his office door closed before heaving a deep sigh. "There's no respect today. It's all 'me, me, me.' 'When do I get a raise?' 'How much vacation do I get?' Nobody asks, 'What can I do for the business?" Meredith now has a simple remedy: he prefers to employ older, more experienced workers. "The other day, I hired someone who's 68."
"To survive in a business like this, you'd better be sure you got a good partner, and I don't mean a business partner," says Meredith. His partner is Pat, to whom he has been married for 34 years. When I first met Pat, an erect and handsome woman, she eyed me carefully. "What's this article about? We're private people."
I told her that I was interested in the business.
"Well," she said, "the business is part of our private life."
The next day, over lunch, Pat was less wary, but no less acute. She wanted to know what I thought, what conclusions I have drawn in my travels as a business writer. Then she and her husband told me a little about their lives.
Doug and Pat have four children. Three are teachers, and one is a landscape architect. Pat says, "We told them, Do something you enjoy, and don't marry for money." Doug completes the thought, laughing: "And they took us too literally."
Pat works about 20 hours a week in the store. She also promotes literacy in the county. She says she is leery of computers. What will happen, she wonders, in a technologically driven future bereft of people inspired to make art?
Pat buys crafts for the business, a thankless task given that Wal-Mart, practically next door, often sells the exact items in bulk below her cost. She recalls one such case concerning felt fabric: "I kept looking at it and wondering how they could afford to charge so much less. For the longest time, I couldn't figure it out. They looked exactly the same." Then one day the sales rep was in town. Pat asked, "What's going on here?"
He disclosed that Wal-Mart often sold goods manufactured to its specifications. Look more closely, he said. And she did. The thread count in the Wal-Mart fabric was 120 threads per square inch. Meanwhile, Bay Pharmacies' felt had 144.
A Lake in the Woods
Doug and Pat Meredith grew up in the woods of northern Wisconsin. She's from the Hurley area, and he's from Hurley's sister city, Mellen, in Ashland County. The area once had a population of almost 18,000. Now there are only 6,500 residents, and 65% of the population is over age 65. The iron mines have long since closed, having lost out to lower-cost foreign sources. Technology has transfigured a marginal timber industry, with half the number of men now able to cut twice as much forest.
Doug and Pat first met when he was 12 and she was 8. Their families had cabins on a small lake in the woods. She graduated second in her high school class. He chose to pursue much of his education elsewhere. "I always loved being outside," he says. He would often leave school after lunch to hunt, fish, or trap. In the summers, he fought forest fires.
