Hipermás the Low-Price Leader

March 14, 2008

If you want to save a few bucks, Wal-Mart-owned Hipermás appears to be the place to shop.

A Tico Times price survey of 20 common grocery items at three major chains found that a shopper would spend about ¢20,441 (about $41) at Hipermás.

That is a 2.7% savings over the same items at Perimercados and is 5.2% less than what the items cost at Auto Mercado. Which is why 31-year-old Gadiel Alvarado is a Hipermás loyalist.

“It’s the cheapest,” she said. “Auto Mercado is always more expensive because it’s targeted at the higher classes.” But the two Costa Rican supermarket chains are hoping to lure people like her away from the grocery store giant that Sam Walton built.

Auto Mercado and Perimercados – competitors who view themselves friends by virtue of their common enemy, Hipermás – recently threw down the gauntlet at the Wal-Mart company by forming a solidarity alliance with a string of other Central American food retailers to stem the U.S.-based multinational’s tide of market dominance (TT, Feb. 15).

In the 16-strong collective, Supermercados de Centroamérica y Panamá (SUCAP), the stores plan to share best practices, cut costs and create greater economies of scale.

One of the ways suggested as a possible means to slash costs – which would inevitably have a direct effect on the checkout bill – includes the possible sharing of suppliers.

The goal is to compete more favorably with the multinational, which already enjoys the benefit of a huge, pan-Central American extended network that also includes the chains Más x Menos and Palí.

But just how competitive is Wal-Mart? The Tico Times survey was carried out at Hipermás in Guadalupe, northeast of San José; at Perimercados in Montelimar, also northeast of San José; and Auto Mercado in Tibás, north of San José.

The survey compared 20 single items that span a typical shopping list. Fruit and vegetables were compared at their per-kilo price.

The survey found that by shopping at Hipermás, a consumer would save ¢559 (about $1.13) over the same list at Perimercados.

At Auto Mercado, the shopper would pay ¢1,130 (about $2.29) more than at Hipermás. However, signs of a price fight are already in evidence.

Littered around Auto Mercado in particular are 20% discounts on items ranging from fruit and vegetables to meat and sundries.

At Perimercados and Hipermás, there were signs of price matching. Scott-branded toilet paper, for example, was labelled for ¢1,583 (about $3.21) in both stores.

Auto Mercado, meanwhile, offered the item for ¢1,615.

The Costa Rican stores offered lower prices than the multinational on a few items: Axion dish cleaning liquid was just ¢730 at Auto Mercado and ¢860 at Perimercados, compared to ¢919 at Hipermás.

Although slightly more difficult to measure due to varying weights, Auto Mercado appeared to offer the lowest priced ground beef, with just over half a kilo listed for ¢1,196 (about $2.43).

But as stores set about the game of oneupmanship on price, they probably should pay attention to people like 30-year-old Marta Alvarado, Gadiel’s sister, who looks beyond the bottom line.

“I shop at Price Smart because buying in bulk is cheaper.But I buy my meat at Auto Mercado because they have the highest quality.”

 

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