San José, Costa Rica, since 1956

Wal-Mart-Controlled Supermarkets Popping Up

Inside the concrete parking shelter, the crowd sat on folding chairs and the temporary stage was backed by a red, white and blue banner emblazoned with the words WAL-MART.

Today, Wal-Mart is putting us on the map, said Cartago Chamber of Commerce President Nurh Barguil.

A Catholic priest blessed the cavernous new building in the Cartago town of Oreamuno, east of San José, the crowd cheered, and a ribbon was cut.

A bystander might easily assume the July 20 event was a grand opening for a new Wal-Mart store. In reality and as the towering new sign with the blue whale outside attests the new store is a Hipermás.

But just barely.

The truth is that although Wal-Mart has yet to open a retail store under its own name in Costa Rica since it bought its way into the market in 2005, the line between Wal-Mart International and the store brands it controls in Central America is becoming increasingly thin.

New stores opened under the Wal-Martcontrolled brands Palí, Maxibodega, Mas x Menos and especially Hipermás are taking on more of the characteristics of Wal-Mart Stores, Inc. in terms of layout, operation and (in some cases) products.

Yes, they seem like Wal-Marts, said Wal-Mart Costa Rica Country Manager Javier Sibaja, referring to the two new Hipermás stores that Wal-Mart Costa Rica just opened outside San José. In fact, they are Wal-Marts, practically. The only difference is that they re called Hipermás.

It s just one of several ways Wal-Mart has been changing things since it bought 33.3% of the Central American Retail Holding Company in 2005 (TT, Sept. 30, 2005) and then picked up a 51% controlling stake of the supermarket group in 2006 (TT, March 17, 2006).

The first change was to rename the holding company Wal-Mart Centroamérica.

Since then, the company, which by year s end will be operating 140 stores in Costa Rica and more than 400 throughout Central America, has been focusing on regionalizing and aggressive expansion.

Though new stores in Costa Rica are increasingly made in Wal-Mart s image, Sibaja said the company still has no plans to open up a store under that brand, mostly because of the difficulty, in Central America, of offering the huge selection of products for which Wal-Mart stores are known worldwide.

New Stores, New Look

Change doesn t yet appear to have touched Wal-Mart s new local headquarters in the center of San José, which, considering Wal-Mart Stores Inc. s reputation as a costcutting hawk, isn t much of a surprise.

The lobby where new and future employees are lined up to fill out paper work is shabby, with a stained drop ceiling and linoleum floor. The walls are painted alternating green, blue and pale orange. Cardboard cutouts of managers wearing yellow safety helmets grace the hallways, and workers huddle in a cubical maze on the main floor.

Sure, the building has been the headquarters of the Costa Rican supermarket chain that Wal-Mart now controls for 47 years. But since moving in, it doesn t appear the multinational company has changed much more than the welcome mat, which now says Wal-Mart Centroamérica.

We, as Wal-Mart, are looking to give people the best price, Sibaja told the Tico Times in his echoing office space on the third floor. But to give the customer the best price, we have to do it at the lowest cost. And part of (the lowest) cost is an austere office.

It s a value that extended to the opening of the new $14-million Hipermás store in Cartago province, east of San José, where guests were strictly limited to two mini-pastries and a glass of Tang orange drink.

The store is the seventh of 14 that Wal-Mart plans to open in Costa Rica this year.

It is expected to employ 300 people raising the total number ofWal-Mart employees in the country to more than 8,000. Counting the $17-million store it opened a few weeks ago in the western San José suburb of Escazú (TT, July 13), it is also the second Hipermás to have an interior layout and style that is distinctly Wal-Mart.

The store is built like a giant, brightly lit warehouse, with huge markers at the end of each aisle. The wide aisles are intermittently piled with sale items like computer printers, or disposable diapers and the dozens of checkout lines fade into the distance.

Some of the associates, as both Wal-Mart and Hipermás employees are known, wear blue vests, and sales are announced everywhere with large, exclamatory signs. Wal-Mart s presence can even be seen on the shelf now, in all its stores, where products like Equate shampoo and Durabrand coffee makers both Wal-Mart brands have begun to pop up.

Those last items, however, are relatively unusual: Wal-Mart hasn t changed many of its stores suppliers since it picked up its controlling stake. Sibaja said that around 90% of the items found in Wal-Mart s Costa Rican stores are still produced locally.

That hasn t changed very drastically because you know how difficult it can be, being able to bring in a product in a volume that makes it attractive for the customers, Sibaja said, referring to the difficulty of finding providers that can produce a product in the large volumes needed by a retailer like Wal-Mart.

For the moment, Wal-Mart has taken to working with its local providers to coordinate them in part of its ongoing effort to approach Central America as a region, not a series of countries. This has been particularly the case with Wal-Mart s fruit and produce suppliers, some of whom now export to other Wal-Mart-owned stores in the region and even in the United States.

But Sibaja cited the difficulty in lining up new suppliers as the primary reason Wal-Mart has yet to open a Wal-Mart-brand store in Costa Rica or anywhere in Central America.

Tariff barriers and logistics mean that the selection of merchandise in the region is still nowhere near what the company would need to be able to open a Wal-Mart, Sibaja said.

Wal-Mart has its own identity, and a Wal-Mart opened right now probably couldn t comply with the expectations of anyone who knows Wal-Mart, Sibaja said.

Still, it s not just the new Hipermás stores that increasingly look like Wal-Mart: Sibaja added that Wal-Mart Costa Rica is standardizing the existing ones to bring them in line with Wal-Mart s international specifications as well.


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