miércoles, 26 de marzo de 2008


Recently, the new tendency by existing supermarket chains in Panama has been to remodel and expand existing facilities and to open new ones, not only in the city but in the interior as well.Among the super market chains are: Rey, Super 99, Xtra, El Machetazo, Riba Smith, Romero, Mega Depot, PriceSmart, and others. Although the Association of Merchants and Distributors of Foods and Similar in Panama (ACOVIPA) do not have an exact number of the amount of sales by this sector, some business members estimate that at least US$1,000 million are moved annually, and that they employ some 100,000 direct and indirect employees.In Panama there is a phenomenon which does not exist in other countries and it is that in a kilometer, you can find at least five stores from different supermarket chains coexisting, this could be attributed to the fact that there is high consumption in the country because of the American influence.

According to Ivan Rios, President of ACOVIPA, expansion of the supermarket chains responds to the Panamanians culture who has grown accustomed to buy in these stores; besides, growth of the country has brought as a consequence that the chains are beginning to open new stores where there is a considerable flow of people. Part of the strategy is that if a foreign supermarket chain wishes to enter the market and compete with local chains, it will not be easy because as the locals expand they are servicing the market.“The strategy is to search for niches in the market where people is used to buying in supermarkets, but also in the country’s interior where they have been displacing traditional businesses which do not have the infrastructure of supermarkets”, indicate Rios. Rios expects this expansion is going to continue until the small supermarkets and stores associate into cooperatives like in other Central American countries in order to obtain advantages similar to those of the supermarket chains.

Chains in expansion

Rey supermarket chain presently has 37 stores, of which 18 are under Rey trade mark, 10 under Mr. Precio, and nine under Romero.Roberto Maduro, Marketing Manager for this chain explained that the company is in the process of increasing its inventory in locations at the national level in order to open new branches for the three trade marks.
The department store, El Machetazo that has supermarkets within its infrastructure and does not pretend to be left behind. This company has nine stores in Calidonia, San Miguelito, Tocumen, Santa Ana, Arraijan, Penonome, Santiago and Chitre, where it also has an affiliate named Super Poll Mart Chitre.Liany Fraga, Marketing and Publicity Manager for El Machetazo stores, commented that they also have plans for expansion with two projects, one in to be located in David, Province of Chiriqui, on the Pan-American Highway, and the other in Las Cumbres, at the entrance to La Cabima. Both projects should be ready no later than 2009.Within the sector of Panama City, they have situated themselves in two or three sectors which is expected to exploit since “the people are asking for us”; however this is a long term goal according to Fraga.


The manager explained that they are not just a supermarket, because they have more than 30 departments, among them cosmetics and perfumes, beauty parlor, pharmacy, sports, gentlemen, ladies, home, audio and video, exoteric, cafeteria, toys department, painting, and others. The supermarket chain Riba Smith presently has four stores located in Bella Vista, Transistmica, Multiplaza Pacific, and Costa del Este, with the last one being the most recent opened two months ago.Carlos Ramon Smith, Vice-president of the chain Riba Smith indicates that the expansion of the supermarkets is “natural” because the cost of living in the country continues to increase. It is no longer profitable for grocery stores to continue to operate, which obviously is not a good sign”, he said.Smith indicated they will probably open new stores within two years in the Juan Diaz sector, and possibly in two other locations; however, he preferred not to go into details.Super 99 has 32 stores and recently acquired EconoMax store at the entrance to La Cabima. However, Ricardo Martinelli, owner of this chain preferred not make any comments about this subject. This chain, that for sometime has been offering services 24 hours a day, has also expanded some of its stores, for example the one located in Los Andes commercial center.


The supermarket chains have not concentrated in providing only foodstuff for its clients, but have incorporated sections like hardware, pharmacy, toys, centers for payment of basic services, and inclusive free transportation. Everything is done with the goal that clients can obtain different products in just one place. However, competition does not end just there. To supermarket Rey, there is space not only in the capital city but also in the distant provinces to continue with the expansions. The fact that they have three different trade marks targeted at different socioeconomic segments gives them added flexibility to grow.The Machetazo believes it is necessary to grow because the market is also doing it, and this is the reason why they and the competition are expanding. Smith said they welcomed the competition because they are confident of the quality of service they offer and how they do it.“There is always space to grow because the country is growing too, and every day we have more foreigners who choose Panama to other destinations”, he said.

Interesting Data
Riba Smith presently has 2,000 employees and four stores.
El Machetazo has nine stores and has approximately 3,000 employees.
Rey Holdings Corp. has approximately 3,900 workers among its three chains of supermarkets. It has 37 stores. Some are opened 24 hours a day.
Xtra: Has six subsidiaries located in the capital and in La Chorrera.
Super 99 offers service 24 hours a day and has more than 32 stores throughout the country.
Mega Depot: Owned by Ricardo Martinelli has two stores, in the capital and in Colon.
PriceSmart: Has four stores, three are in the capital and one in the province of Chiriqui.
There is also a store from Super Centro El Fuerte in San Miguelito; and one store from Super Kosher.