By Ashford W. Meikle, Staff ReporterJAMAICA'S RETAIL hardware and garden stores could soon face robust competition from yet another American store chain. Home Depot, the second largest retailer in the United States and the largest home improvement retailer in the world, advertised recently that it would enter the Jamaican market.
Home Depot's familiar 'orange box' stores can be found at 1,700 locations in North America (including Mexico) and Puerto Rico. The company also has two sourcing offices in China.
But Home Depot's entry into the market will not catch its local competitors off guard.
"Home Depot will have the challenge of where they are going to put their stores," explains the chief operating officer of the H&L True Value Group, John Mahfood. He brushed aside the likely competition, saying, "In Jamaica they would not be able to put up more than two stores. At H&L we have the benefit of being a neighbourhood store." He said there are twenty stores in the H&L group strategically located islandwide to meet the needs of the Jamaican consumer.
Another large retailer, Gassan Azan, echoes Mr. Mahfood's sentiments. "I don't think it will affect us a number of people are doing that sort of thing (catalogue store operations) here already. I don't see it as any big deal," he asserted. Mr. Azan is the CEO of MegaMart and Bashco Trading Company.
Mr. Mahfood noted that it is not likely that Home Depot will undersell the H&L stores. The latter, associated with the True Value brand in the U.S., is able to get discounts as well as maximise economies of scale through its bulk procurement. These are passed on to the customers. He also points out that the H&L stores invest heavily in ongoing customer service training.
'CATALOGUE STORE'
Super Valu Home Centre, a competitor of True Value, declined to respond to questions posed by The Financial Gleaner. "No comment," was the brusque response of its managing director, Sing Chin.
Apparently, Home Depot will operate a 'catalogue store' (or sourcing office) similar to its operations in China. "No, we are not actually putting up a store in Jamaica... but we will have people there to help (with orders)" said a representative at its Miami-based International Sales and Export Department. Pressed to explain the logistics of staffing, the agent refused to elaborate.
The catalogue store concept is not new to Jamaica. In the '90s, American retailer JC Penney attempted to introduce it on the Jamaican market but it never took off and the company aborted its Jamaican plans.
