Although this article by the Economist mentions Colombia as its focal point, it could have easily been written about a number of different countries. The article highlights are number of reasons that large-scale supermarkets are struggling to gain market share including:
- Convenience
- Cash vs. Credit
- Quantity – small stores will sell you two eggs and 3 slices of cheese
- Social Factors (friends and neighbors)
Having lived in a number of Latin American countries over the last decade I would like to add to this list a number of additional items:
- Who does the shopping? – many times it is the empleada (maid) who is in charge of the shopping and they generally feel more comfortable at street markets
- Planning – Latin America as a whole is not known for its ability to plan and shopping on a large scale requires having a long list of items to purchase (not to mention a place to store them). Which brings me to my next item.
- Storage – Even as incomes have grown, many in Latin America do not have refrigerators or have smaller units, which does not allow the ability to store 5 gallons of milk.
- Payroll – The informal economy still plays a big role in Latin America with workers receiving smaller payments on a daily basis. This day-to-day living does not led itself to large scale shopping.
- Transport – If you plan on buying large quantities of groceries you need something to bring them home with you. Many in Latin America do not have cars and trying to transport large bags on public transit or taxis is not the most enjoyable experience.
I find it interesting as more supermarkets are trying to enter into Latin America things in the U.S. are trending in the opposite direction. Most cities have successful farmers markets and smaller format stores and buy local continue to gain momentum.
Hemipshere Politico 