Leonardo Blair, Staff Reporter
JAMAICA'S RETAIL trade has grown significantly over the past four years with substantial investments by the PriceSmart and MegaMart outlets and supermarket chain, SuperPlus Food Stores.
But while these investments have given a boost to employment and offered consumers a wider choice of mostly imported goods and the convenience of "one stop shopping", smaller retailers are increasingly apprehensive that they will buckle under stiff competition from these larger establishments.
Edwin Lee, owner of the 30-year-old Price Rite Supermarket in the Kingston 19 area told The Sunday Gleaner in an interview last week that: "I fear that in another couple of years these big boys are going to push us right out of the market."
THE LURE OF PRICESMART
He said the introduction of PriceSmart in his area had lured potential customers from his business. PriceSmart is on Red Hills Road and Price Rite Supermarket a much smaller establishment is just about a four-minute walk away at the intersection of Red Hills Road and Chancery Street.
Another manager at one well-known supermarket establishment in the Kingston 19 area who did not wish to be named for this interview, also agreed that the new marketing strategy and huge spending on 'one stop shopping", smaller retailers are increasingly apprehensive that they will buckle under stiff competition from these larger establishments.
Edwin Lee, owner of the 30-year-old Price Rite Supermarket in the Kingston 19 area told The Sunday Gleaner in an interview last week that: "I fear that in another couple of years these big boys are going to push us right out of the market."
THE LURE OF PRICESMART
He said the introduction of PriceSmart in his area had lured potential customers from his business. PriceSmart is on Red Hills Road and Price Rite Supermarket - a much smaller establishment is just about a four-minute walk away at the intersection of Red Hills Road and Chancery Street.
Another manager at one well-known supermarket establishment in the Kingston 19 area who did not wish to be named for this interview, also agreed that the new marketing strategy and huge spending on 'one stop' shopping complexes such as MegaMart and supermarkets like SuperPlus, would likely dominate the estimated $60 billion grocery market in another two years.
Seeing the effects of some of the superstores on the smaller supermarkets, the manager said she was worried that MegaMart would be coming near her soon.
"I don't know when the bigger guys like MegaMart and SuperPlus come here what is going to happen to me," said the manager who has been in business since the 1960s."I see it (the retail market) going superstore oriented in another two years. The bigger ones will be buying out the smaller supermarkets. Sooner or later it is going to be like the (United) States," she said.
The owner explained that if market players wanted to get a foot in the retail industry and keep it there, the store will have to boast at least 20,000 square feet of shopping area. What she is banking on right now is the service her company now offers.
In Portmore, St. Catherine, one manager at the Shopper's Fair Supermarket explained that her store has not been hard hit by the "one stop shopping" lure of the four-year-old MegaMart complex.
COMMITTED CUSTOMERS
"What I understand is that when MegaMart opened up, some of our customers left but we have some committed customers," said Pat Smith-Bravo, a manager at the supermarket."I remember when we had the fire and we were out for a while, some of our customers went to MegaMart and they came back and said they were confused because they couldn't find anything. We have a committed market," she said.
But while the smaller supermarkets gripe over the effects of the new concept in the retail trade, some shoppers welcome it."I think I get a better price and the products are relatively fresh in comparison to smaller supermarkets. They also carry a wider selection of items," Fabian, a shopper at MegaMart in Portmore, told The Sunday Gleaner yesterday.
Another shopper, Faith Bernard, said she moved to Portmore a few years ago and has found things cheaper. "I also like the space and convenience. Everything is right here fruits, vegetables, meats and grocery.
Janice Lindo, on the other hand, who shops regularly at the smaller PriceRite supermarket in Kingston, said she preferred the friendly atmosphere, so she would continue patronising the supermarket.
FANCY STUFF
"I know where everything I want is and I don't really need the fancy stuff they say is at the other place. Besides, I don't really understand this membership shopping business," she said.
Speaking with The Sunday Gleaner last week, however, Gassan Azan, chief executive officer of Bashco and MegaMart, explained that the move to expand with bigger and better stores with a wider variety of items is just good business.
"It makes good business sense for us to do that because once the economy turns around we will be poised to take advantage of the market," he said. "We are not offering your traditional retail. Our concept is a different type of concept and by expanding it we expect to capture the market share, however minimal."
This year, Jamaica's big-gest retailer SuperPlus Food Stores, announced plans to introduce three new stores in the Kingston area. New outlets were established at the former State Cinema in Cross Roads, across from the NCB Atrium on Trafalgar Road and at Clock Tower Plaza on Half-Way Tree Road, pushing the number of stores across the island to 32.
In an interview with The Sunday Gleaner last week in response to the fears of some of the smaller retailers, Wayne Chen, chief executive officer of SuperPlus, said: "It is a free market and nobody has an obligation to keep you open."
In the last year alone, said Mr. Chen, SuperPlus has managed to introduce eight new stores at a cost of $400 million and his staff complement is just over 2,000."
The strategy is that every Jamaican should be a short distance from a SuperPlus store."
Mr. Chen last year estimated that SuperPlus had about 13 per cent of the estimated $50 billion to $60 billion grocery market with gross sales of $6 billion-$7 billion.
But the landscape has changed slightly since then, with the high profile entry of the American-owned PriceSmart shopping warehouse, though grocery traders say it is too early to measure what has been the latter company's impact.
Country manager of Price-Smart, Charlie Hyde, ex-plained last week, however, that contrary to the fears being expressed, they are not in Jamaica to dominate the retail market.
OPERATE DIFFERENTLY
"We operate differently from the regular stores. We are a membership warehouse and we only carry 2,700 different items. The average supermarket carries 15,000 or more items so we can exist with the local market," he said.
PriceSmart has invested some US$2 million in the Jamaican branch of the storebrand so far and they employ 140 persons. While they may be expanding, says Mr. Hyde, it won't be any time soon."We have looked at prospective sites in Montego Bay but as far as expansion goes we have nothing planned for the near future," he said.
He pointed out too that a lot of the "small supermarkets are buying from us because we are wholesale."
Mr. Chen explained that the price of grocery commodities are the currently the lowest they have ever been in real terms in Jamaica's history and he intends to keep them lower still by operating as efficiently as possible.
