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2002-02-11
San Juan, PR. Wal-Mart Buys Island Chain, Triples Stores.

Six months ago, I was invited to Puerto Rico at the invitation of the Centro Unido de Detallistas, an organization of small merchants. At the time (see Newsflash of 7/30/01) the merchants were trying to get the government to uphold the island's land use plan, which said that large merchants should be balanced out by smaller merchants. This week, the worst case scenario happened for the indigenous merchants on the island. Wal-Mart Puerto Rico announced that it was tripling its number of stores by buying out Supermercados Amigo, a 35 store chain in Puerto Rico that has more than 4,500 workers. Wal-Mart Puerto Rico currently has 17 stores, of which 9 are the traditional discount stores, 1 is a supercenter, and 7 are Sam's clubs. By acquiring Amigo, Wal-Mart boosts its store count instantly to 52, and its employees on the island will rise to 10,000 overall. The only obstacle to this merger, which will place Wal-Mart in a very dominant position in the retail economy of the island, is government consent. Wal-Mart was founded in 1962, Amigo was founded in 1966. The Amigo stores will not change their brand name -- at least initially, and the President of Amigo will become the Chief Operating Officer of Wal-Mart Puerto Rico, and head of the Food Division. Although Wal-Mart's press release indicates that the acquisition will "create more jobs throughout the island," the company does not indicate how many new jobs will be offset by the destruction of old jobs at existing merchants. The combination of these two large retail chains should set off alarms with government regulators, who so far have done little to prevent the colonization of the island by U.S. corporations.

Thinking of traveling to the "island of enchantment"? Why not save your cash and go visit a nearby Wal-Mart instead? Puerto Rico is now so heavily dominated by Wal-Mart, that the place is starting to look like a clone of some small American city. Rather than put out the money to go to an island loaded with American logos, cost-conscious travelers will stay in the states and visit a Wal-Mart instead. Now you can get that enchanting Puerto Rican experience without leaving the comfort of your local Wal-Mart. The pattern at Wal-Mart has been to locate stores in foreign countries, and very soon after to buy out some local chain, as the company did in Mexico, Germany, and with the ASDA acquisition in Britain. This is how the company establishes its market share: by using its capital to buy local companies, leveraging out the smaller local merchants. It's a form of retail colonization destined to alienate many nationals in these other countries.

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