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Winners And Winners
Words Of Wisdom: Change Is The Only Constant
By FRANCISCO JAVIER CIMADEVILLA
March 25, 2004
The rise of the megastore in the 90s brought about a great deal of uncertainty and confusion to the local wholesale and retail industries.
Little by little, though, the dust has started to settle, allowing a clearer picture to emerge.
Like any story, this one has winners and losers, but mostly winners. And like so many things in life, the only constant is change and transformation.
Contrary to earlier speculation, the arrival of Wal-Mart, Costco, and Sams Club hasnt hurt local wholesale distributors. On the contrary, they have seen their business go through the roof by taking on these megaretailers as important clients, supplying them with merchandise and logistical services.
In fact, megaretailers have turned out to be huge purchasers locally. Wal-Mart, for example, says that more than 80% of its total purchases are local. That means huge business for local distributors and manufacturers.
Meanwhile, distributors continue to serve supermarket chains and cash-and-carries, their traditional customers, as before.
Many cash-and-carries, though, have seen their business decline as small clients such as cafeterias, restaurants, and smaller grocers have turned to megaretailers for their supplies and merchandise because of the better prices they usually offer.
In fact, many small businesses, like your neighborhood colmado that has so often served as the poster child of the public opinion campaign against megastores, have come to embrace them as more competitive suppliers for their business.
But traditional cash-and-carries arent taking it lying down. They are fighting back. Most have integrated retail into their formerly all-wholesale operations. Many have air-conditioned their stores and refitted them to make them more attractive, better lit, and more comfortable for retail shoppers. They have improved customer services. And some are seeking to expand by adding locations or consolidating with competitors.
In other words, what we have seen in the local wholesale industry during the last few years is the normal process of evolution that characterizes not just business but indeed every human enterprise. That process of evolution brings about change. Some see change as a threat; others see it as opportunity.
In our opinion, the successful businessperson is the one who, instead of opposing change, embraces it; instead of seeking protectionist measures to maintain the old way of doing business, sits down to figure out what opportunities he or she might reap in the process.
Our public officials should adopt that mentality as they ponder and determine public policy. They could take a cue from Caguas Mayor William Miranda Marin.
Two weeks ago, he proudly presided over the groundbreaking ceremony for the new Wal-Mart Supercenter in Caguas.
Asked if he feared a backlash from the politically influential small-business sector for so openly embracing the arrival of a megastore in his town, he lashed out with his traditional common sense.
"[The Supercenter] represents an investment of more than $25 million and will create more than 300 jobs. Youve got to be crazy to oppose this," said Miranda Marin.
"In this globalized economy we must search for ways to adapt to change. Cities must evolve in tune with socio-economic changes in order to be livable," he added.
"Businesses big and small must also adapt. They must realize the way of doing business has changed dramatically. If they intend to do business the way it was done 20 years ago, they are bound to disappear. Change is the only constant," he added.
Words of wisdom.
This Caribbean Business article appears courtesy of Casiano Communications.