GLOBALISATION RAISES both a potential threat and possible benefits for the local food retail industry. This according to Wayne Chen, Chief Executive Officer (CEO) of the SuperPlus Food Stores, who was speaking yesterday during the regular luncheon of the Rotary Club of St. Andrew, at the Jamaica Pegasus Hotel, New Kingston.
Speaking of potentially competitive supermarket chains, such as the United States-based WalMart, Mr. Chen said: "If they are not constrained and if they are allowed to come in, they can easily swallow us up in a flash." Adding to that, the head of the 28-store SuperPlus chain, which brought in a reported $6 billion in revenue last year, told the gathering of Rotarians that those larger entities would be able to lose money for five years in order to dominate the Jamaican market.
"That is why we have the Fair Trade Commission," Mr. Chen said, pointing out that it would be necessary to prevent predatory pricing in the event of such an entry into the market.
However, responding to Rotarians' queries on the day's topic, "The Changing Face of Food Retailing in Jamaica", Mr. Chen said globalisation could also be viewed as a tool for increasing the standards of the country's own stores. This as the advent of higher standards of competition would encourage local stores, seeking to survive, to increase their own standards and take greater consideration into the needs of the customer.
SPECULATIVE NATURE
Despite the speculative nature of the discussion, Mr. Chen pointed to the recent opening of one international wholesale store in Jamaica as an indication of the globalisation of the industry.
"We recently saw the opening of PriceSmart which, while not squarely in the food retail sector, has in its own strategy in the other Caribbean territories evolved gradually into being more of a traditional supermarket and away from being a wholesale shop as they wake up to the realities of local competition," Mr. Chen said.
He further stated that the PriceSmart experience has not been "heartening" for other overseas entrants. "In terms of their return on equity and in terms of profitability over the period, they have not done that well in the Caribbean," he said. That however, is not to say that the local food stores will be complacent, he added.
But, speaking to The Gleaner last night, PriceSmart local manager, Charlie Hyde, said that Mr. Chen's comments were incorrect.
"We are only competitive for the items that we carry," Mr. Hyde said, indicating there is no plan to become a supermarket. According to him, PriceSmart carries only 3,000 categories of items while the local supermarkets carry 15,000 to 20,000. Despite stating that there is no plan to open another PriceSmart store in Jamaica, in the near future, he also said the wholesale has been doing well and is "striving to do better."
