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Puerto Rico Outperformed U.S. Mainland In Retail Sales Gains Last Year
Only Stateside Automobile Dealers Fared Better Than Their Local Counterparts In 2002
By TAINA ROSA
June 12, 2003
The saying "If the U.S. mainland catches a cold, Puerto Rico gets pneumonia" may not always hold true, especially when referring to the retail market, as the islands sales increases continue to outpace those of the States.
A comparison of 2002 retail sales reports from the U.S. mainland and Puerto Rico indicates most retail categories enjoyed higher sales increases on the island. Only local auto dealers fared slightly worse than those in the States. In addition, categories such as shoes and gas stations grew more than 10% in Puerto Rico.
Information on retail sales was gleaned from two sources. Statistics for the U.S. mainland were obtained from the International Council of Shopping Centers White Paper published in April; the Commerce Development Administration provided the data for Puerto Rico. Both organizations studied sales increases for natural year 2002. Although many in the industry consider the local statistics to be exaggerated, they do agree Puerto Ricos retail sales are generally better than those on the U.S. mainland.
Retail industry insiders say the statistics demonstrate Puerto Rico has many advantages over the U.S. mainland. "Puerto Ricos population consumes more per capita than does the population in the States," said Atilano Cordero Badillo, owner of Supermercados Grande. "In addition, we have a stronger informal economy and, in general, our basic expenses [such as mortgage payments and some utilities] are lower than in the States."
The gas stations category was the big winner, with a sales increase of 10.6% in Puerto Rico compared with a 2% drop stateside. Although an increase of more than 10% may seem high considering the economy was in a recession last year, "the increases in the gas station category could be correct," said economist Vicente Feliciano. "We must realize these statistics dont measure the number of gallons of gasoline sold, but rather the amount of money generated from gasoline sales, and the price of gasoline was higher than it was the previous year."
The shoes category saw a sales gain of 10.7%, on the island and a 0.1% decline on the U.S. mainland. Sources at Payless Shoe Source confirmed the results. They said that whereas their operations in the States arent meeting expectations, those in Puerto Rico are. The local stores are doing so well, in fact, that the company will open another 10 in the next year or so, said one source.
The conventional department stores category also did better in Puerto Rico than in the States last year, increasing 6.2% over 2001; the U.S. mainland reported a drop of 3.5%. Puerto Rico can lay claim to having the best-selling outlets of many department stores. For instance, J.C. Penneys best-selling location is at Plaza Las Americas, according to Cathy Martinez, public relations & marketing director for J.C. Penney in Puerto Rico. Garry Salvatore, president of Sears local operations, said Puerto Rico is among the companys top markets.
Local furniture stores also did well, gaining 9.8% to the U.S. mainlands 4% increase. Brian Shames, regional president of Rooms to Go, told CARIBBEAN BUSINESS that sales at his Puerto Rico stores have risen more than the 9.8% average.
Sales at jewelry stores grew 5.5% in Puerto Rico and 4.8% in the States. The drug stores category, meanwhile, enjoyed a sales increase of more than 8% both locally and stateside. Walgreens and El Amal, the two largest drugstore chains in Puerto Rico, are continuing with their rapid expansion plans on the island. Each already has more than 60 local stores.
Mens / boys apparel was the category with the biggest drop (2.5%) in Puerto Rico; nevertheless, sales dropped farther (3.2%) on the U.S. mainland.
The automobile dealers category also saw a sales decline (0.8%) in Puerto Rico. In the States, however, the category had a sales gain of 1.9%. This is the only category that had a higher sales increase in the States than in Puerto Rico.
Manufacturer rebates and dealer incentives helped local car sales in 2002 remain on a par with the previous two years, with 123,054 units sold last year, according to the monthly automobile retail sales report by Plaza Motors Corp. There were 123,375 and 122,958 units sold in 2000 and 2001, respectively (CB Jan. 23, 2003).
Although the overall increases in retail sales seem healthy, 2002 was a pretty bad year on the whole. In Puerto Rico, four of the eight retail categories reported smaller sales increases in 2002 than in 2001.
For instance, Puerto Ricos sales in the gas stations category increased 12% from 2000 to 2001 but only 10.6% from 2001 to 2002. Other categories with sales increases that dipped in comparison with 2001s were mens / boys apparel, jewelry, and auto dealers.
This Caribbean Business article appears courtesy of Casiano Communications.