SUNS4369 Monday 8 February 1999

Latin America: Hypermarkets bring social change



Montevideo, Feb 3 (IPS/Daniel Gatti) -- The growth of western-style super markets throughout Latin America has contributed to the demise of small and medium-sized businesses and caused an increase in unemployment, according to researchers here.
Argentina has been most affected by the spread of "hypermarkets" - where bulk buying at discounted prices is a big consumer attraction - followed by Chile, Mexico and Colombia, according to a study by the consulting firm CCR.

But Argentina at least has some controls on limiting the expansion of the megastores but elsewhere in Latin America store owners can establish hypermarkets wherever it is commercially convenient. The only limit that they encounter is the saturation of national markets, especially in the region's capital cities, which have been overrun by supermarket chains.

Currently, the big transnationals ruling the sector have targeted "virgin" areas in the cities of the interior - which is bring social problems as small businesses are pushed aside. The supermarket boom is fuelled mostly by European and U.S. firms, which have taken over the most successful Latin American companies.

In Argentina, for example, the supermarket chain Disco - one of the most profitable in the country - until recently belonged to Argentine and Uruguayan shareholders. Now, the Dutch group Aholds has taken a big
slice of the company and 50 percent of its Uruguayan branch has been purchased by the French chain Casino Geant.

Casino Geant, in fact, is establishing itself in all the main Latin American countries, like the French chain Carrefour and the U.S. Exxel Group.

A report published in the Argentine newspaper "Pagina 12" declared that super and hypermarkets were one of the biggest sectors in Argentina to be affected by the concentration of foreign capital. A similar phenomenon is occurring in Chile and Uruguay.

The seemingly irresistible rise of "supermarketism", as the phenomenon is being labelled, resulted mainly from economic factors, but there also were socio-cultural reasons, according to a joint study of the Inter- American Development Bank and the Association of Store and Bar Owners of Uruguay.

"Changes in habits and consumer patterns has been fuelled, among other things, by the expansion and diversification in the availability of goods and services, the advances in communication and the expansion of
credit", the report says.

"If we add to that the increase in the number of automobiles, which expands the possibilities for movement for purchases, in addition to the issue of citizen security, the emergence and expansion of this kind of commercial activity in large spaces is logical", the report concludes.

Another study, conducted by German expert Peter Drucker and quoted in the Uruguayan magazine "Brecha", points out that the expansions of hypermarkets can also be explained in the fact that women, who represent more than 80 percent of shoppers, "do not have time (for conventional shopping)".

Their increased participation in the labor market and their autonomy from their husbands has led them to gradually abandon their preference for small stores, he says.

"In previous decades, the small stores were the only ones that allowed for some socialization among housewives, breaking the monotony and daily routine, which the Germans call 'the three k's - kinder, kirche
, kuche - (children, church and kitchen)'."
However, one of the factors that has worked in favor of the large commercial spaces and against the smaller stores - lower prices - is losing ground in Latin America because of the lowering of inflation in most of the countries. "Today, surviving small shops and self-services stores can compete pricewise in most product areas", says Manuel Calvo, president of the Association of Store and Bar Owners of Uruguay.
Still, the increase in the number of megastores, has caused g serious unemployment. According to Calvo, studies showed that for each job created by a supermarket, six other are destroyed.
Most of the time, small shops near any megastore, like hardware stores, bakeries, butcher shoips and other "mom and pop" stores whose products compete with those of the megastores, end up bankrupt, Calvo said. The tendency is exacerbated by the fact that, in the face of the fierce competition with each other, hypermarkets are offering a greater range of services.

Juan Mirenna, president of the Association of Megastores in Argentina, envisions in the next few years "a scenario for the sector with lower prices, through the reduction of fixed costs, and more services for the
client".

In addition to unemployment, the expansion of the megastores brings other risks, according to sociologists Ruben Devoto ad Marcelo Posada, who co-authored a study for the Latin American Faculty in Social Sciences and the National Council of Scientific and Technological Research. (CONICET), in Argentina.

"Because of its commercial structure, the chains obtain their supplies from large firms, bypassing local commerce", says the study. At the same time, the benefits and income obtained by the supermarkets rarely
remain in the community where they are located: they either go to finance the expansion of that chain or are invested in other products, especially the financial sector, they say.

In Uruguay, despite these dangers, the Chamber of Foods has noted the absence of sensitivity on the part of government authorities, who refuse to regulate the phenomenon.

In an open Letter to "the Government and Public Opinion" distributed at the end of 1998, the Chamber estimated that "the destruction of the small entrepreneur, the abandonment of the consumer and the risk of
overstocking" are some of the consequences of the establishment of the large transnational chains of hypermarkets.

"Many more families than are employed by these large oligopolistic businesses are being condemned to unemployment and a clandestine no-man's land," the letter adds.

Nevertheless, former president Luis Alberto Lacalle attended the inauguration of a giant supermarket, and the government of Julio Sanguinetti declared "of national interest" the establishment of a chain of hypermarkets from the chain Devoto, today in the hands of the Exxel Group, in a city in the eastern part of the country.

Meanwhile, the Uruguayan Federation of Commercial Employees denounced the anti-union repression to which megastore workers were subjected. Both in the few chains that remain in the hands of national capital as well as those that are owned by foreigners, the union activity is openly discouraged, the Federation says.

In Argentina, the Association of Commercial Employees (AEC) of the city of Rosario - the second largest in the country - said in a communique that in "the battle for economic power" being waged between national
and foreign in the sector, "the working class occupies the worst position".

"Exhausting 15-hour days, job insecurity because of contracts, the permanent changes in tasks, the humiliation of having to accept substandard working conditions, the refusal to pay for overtime and for
the mandatory rest periods", are all part of the situation for workers in the megastores.