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Retail Sales Show Economic Recovery Is Taking Hold In P.R.
More-confident consumers spending on nonessential items such as jewelry, furniture, and restaurants
By LORRAINE BLASOR
December 25, 2003
It was the best of times for consumers seeking bargains. For retailers, however, 2003 was a year in which companies big and small had to work hard to boost their business or hold their own in an increasingly cutthroat environment.
Despite the ups and downs of an economy beginning to recover from a recession, the islands retail industry performed reasonably well. Retail sales, which should surpass $15 billion for all of 2003, increased 6% between January and October (the last month for which figures are available) over the same period in 2002, said Jorge Laboy, chief economist of the Commerce Development Administration.
The categories that performed best during this 10-month period, said Laboy, were furniture, cars, jewelry, hardware stores, cafeterias & restaurants, pharmacies, and food stores. These are businesses whose sales tend to shrink when the economy is in trouble since they sell items considered nonessential , he said.
"At the beginning of the year, expectations were that it wasnt going to be a very good year," said Laboy. "Even though economic conditions on the U.S. mainland havent been the best, sales here grew at a higher pace than last year." (See chart.)
For the retail sector, which embraces many types of businesses, including department stores, pharmacies, restaurants, and franchises, 2003 was a year marked by rampant competition, expansion, and the entry of new players, both local entrepreneurs and stateside outfits. The sector generated its share of controversies.
Walgreens pitted itself against small pharmacies for control of the best locations for drugstores. Wal-Mart sowed panic among small merchants in the Santurce area by announcing its intention to move in by acquiring the Merino hardware store at Stop 18. "Little by little [after buying Merino], Wal-Mart will displace surrounding businesses. When you open your eyes...it will be the beginning of the end," warned the 15,000-member United Retailers Association of Puerto Rico.
Competition among various players in the retail market spelled out a year of continued savings for shoppers. "The competition is great, and the one who benefits most is the consumer," said Atilano Cordero Badillo, chairman of Supermercados Grande.
Even with the lackluster economy, some companies exceeded their expectations. Ron Howard, director of J.C. Penney Puerto Rico Inc., said the company had forecast a 1.5% sales increase for 2003 but managed to beat it by 2% to 3%.
Gary Salvatore, president of Sears Roebuck de Puerto Rico Inc., said, "We had a pretty successful sales year." In fact, he noted, the local operation outperformed Sears stores on the mainland.
Expansion and remodelings were the name of the game for many players, big and small. Wal-Mart opened its third Supercenter in Puerto Rico, a $30.2 million, 157,560-square-foot store in Ponce. Subway and Quiznos Sub, two popular sandwich franchises, opened new outlets, and Bed Bath & Beyond, with one store in Bayamon, chose to open a second at San Patricio Plaza. Pier 1 Imports, with seven stores on the island, remodeled its Plaza Las Americas and Santa Rosa Mall locations.
Supermarket chains formed new alliances. Pueblo International joined with One Stop Prescription Inc. to open pharmacies in many of its supermarkets.
The year also saw new players enter the market. CompUSA made a big splash by inaugurating its first outlet, a 22,078-square-foot store at Plaza Caparra Shopping Center, with a fire sale that had people camping overnight outside the store. Among the new franchises were Just-A-Buck, Rotelli Pizza & Pasta, and Goodfellas Brick Oven Pizza; the last two are starting to take off on the mainland.
Rotellis first outlet, one of 40 to be developed over the next seven years, will open in January at Guaynabo Plaza, while the first Goodfellas was to open at San Patricio Town Center in Guaynabo on Dec. 19. The owners of the franchiseStanley Lopez; his wife, Debbie Lopez; and his brother Gilberto Lopezplan to open three restaurants within the next two years.
This Caribbean Business article appears courtesy of Casiano Communications.