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No so sure on Cost-U-Less

The Democratic Labour Party campaigned five years ago on a platform that included food price reduction as a principal component. That it was a popular message there is no doubt and they were swept into power.

That they have been unable to deliver on this promise, again there is no doubt. And, without doubt also, Barbadians are going to judge them on this failure when they go to the polls next year.

The big question is though: How will that judgement go down. Will voters see the maintenance of high prices as largely of their doing, or will they be convinced that the major contributor was the combination of conditions well beyond our shores.

We cannot say what would have been in the mind of the Minister of Finance when he approved concessions for the entry of Cost-U-Less to the local retail sector, but it would not be unreasonable to believe that the thinking would have had to include the consideration that a player of their scale would add a level of competition that could only work to the benefit of the consumer.

But if the reports are correct that Cost-U-Less was granted duty-free building materials and vehicles for use in their operations as well a 15-year tax holiday, it would not be unreasonable to ask if other players in the sector who did not benefit from such concessions are not justified in complaining about unfair competition.

If concessions are available then all should be able to benefit equally. If other players have been turned down when they requested then Government has a duty to explain why. If the concessions are available and local players have not been made aware then they and the Government must examine the mechanisms.

There is a larger issue for us though, and we accept that we may only be troubled by it because we don’t have the details, but on the face of it, we can’t help but ask: What does an international retail giant bring to the national table that would warrant such generous concessions?

We are not opposed to facilitation of such ventures by Government, after all, the economy will benefit in some way for their injection. But when a North American company sets up shop here, employs a few dozen people and imports everything from apples, to cornflakes, to sugar and zucchini, do the profits it sends out match the benefits it brings in?

After all, we do not believe the Cost-U-Less board members sat across the table and said they would set up business in Barbados for the purpose of helping Bajans. There may be that end result, but their motivation is profits.

However, when the National Union of Public Workers says it wants to set up its own buying club for members, while the directors may see profits in the move, we honestly believe their motivation is principally the reduction of members’ food bill.

If we judge from the performance of the other international chain that is now established here, PriceSmart, and its anything but flattering social contribution, we have to say there is considerable doubt about the benefits Cost-U-Less will bring to Bim. They may win in many instances on quality and variety, but we don’t see the major price differential when compared to local operators.

Perhaps the Cost-U-Less model, coupled with the impact of tax concessions, will have the effect of a major drop in prices, but we will not hold our breath just yet — not given the experience to date.

When a foreign entity tells Government it will set up a manufacturing plant here if the concessions are right, we hardly bat an eyelid. We expect that the tax holiday and other concessions will bring significant jobs and other stimulants to the economy, even the transfer of technology.

If an overseas company lobbies for concession to set up a hospital or some other health facility, it may not bring the same level of jobs, but the spin-off benefits, the spending from patients coming in and perhaps the added availability of specialist personnel and equipment redound to the benefit of the community.

What new retailing ideas, technology, social good etc does the country get from a Cost-U-Less operation? We don’t see it, but we accept we are not all knowing. Maybe they have some major plan to spur agricultural production to supply their shelves and chillers with local chicken, pork, eggs, fruits and vegetables. Maybe they will provide the impetus for a fresh attempt at agri- processing here.

We just wish to understand what would justify such concessions. And believe us, we can be convinced!

4 Responses to No so sure on Cost-U-Less

  1. Tony Webster December 9, 2012 at 6:38 am

    Always a good early-morning read to open the windows of the mind, sir, and to stir the few remaining neurons into activity!

    Ours is indeed, as small open and mixed economy. Added to this are two inescapable facts: Our competitors are no longer only our Caribbean neighbours (who often do not play by the agreed rules of the game), but also but every single sovereign country on God’s earth.

    The very game itself, is changing, as the global economy itself morphs into a “big-soup” , where smart Iranian youngsters emigrate to work for Apple in America; then equally smart Indian youngsters in Mumbai finish-off the software, and the actual product pops out of Foxcon factory in Taiwan…to be be sold by (and for) the millions…back in USA! While we cannot realistically match this sort of game, there are always, niches. And one always is rewarded, by thinking, and planning, and inmplementing, long-term, no matter how attractive short-term necessities might be.

    We must regularly review our own basic requirements, and best options for the near, medium, and long terms. These will be dynamic, and must NEVER be carved in stone. The simplest “tool” which I come back to, is the old “SWOT”…Strengths, Threats, Opportunities, & Threats. This focusses the mind like nothing else. And whenever doing this exercise, please: include the teenagers, the young, and our women. Don’t just ask those folks with Phd’s at the end of their name- but be sure to include them too. And include farmers, and fishermen.

    As for energy, could someone please tell me how much energy we consume (a % of total national usage would do), by air-conditioning everything here, and on transportation? ( We not only A/C our cars; we A/C our tinned foods, corn-flakes, toilet-tissue, clothes on the rack in B’town, jewelry, shoes etc etc. Does ANYONE have ANY idea? Unless the scientists are dead wrong, look for an increase in average global temperatures of up to six degrees celcius, during this century. What might be our official, strategic, scientific, master-plan to deal with this? Perhaps, just turn the A/C trermostat , “a bit lower”? I never thought that we as a nation, could become addicted to chilled air, like cocaine! All the while, those lovely trade winds that brought the English here, and Continue to genly soothe additional hordres arriving ex Virgin Atlantic! What if we could cut 15% off our many prices (witha cemensurtae Fx saving) , by dumping (or severely restricting) acir-conditioning everything?

    If no-one has any idea, then at least, please tell me that we will think seriously about making an about-turn, when oil reaches $225 per bbl.

    Doan believe me: If you can, win Lotto, take a week at Curtain Bluff Resort in Antigua. Last I saw, their suites have no a/c, just superbly-designed rooms, with a fan or two, and the same gentle breezes blowing over the sound of the surf. Heaven.

  2. Jospeh Holder February 20, 2013 at 2:33 pm

    I often ask the question why was Cost U Less given so many concessions, what is the sense of employing a few, and then the
    business community in Barbados is force to send home hundreds
    because the playing field is not level.

    How can the local business survive having to pay vat against a cost u less that don’t have to pay vat.

    Being allowed to bring everything into barbados free of duties.
    Local business men have to pay.

    All their profits are going to be sent out of the Country.

    Barbadians may believe that they are going to get cheap goods, but that is only because the have the concessions against the local business

    when the years are over and they don’t get further concessions they will pack up and go me and leave us holding the bag.

    It leaves me to wonder who got what, but Barbadians will soon realize that
    they will get cheap food but have no money to buy because the businesses
    in Barbados will send home the people.

    Who is responsible for this mess we have gotten ourselves in someone tell me

    And yet my government is saying that they are helping the poor man.

    THe local businessmen have to pay vat against Cost u less that don’t have to pay

    In the end who will suffer, Cost U Less or Local Working Class business will send home.

  3. juan February 25, 2013 at 3:55 pm

    The is nothing in cost us less that actually cost you less. The prices are still the same and that is a shame. why bother

  4. joseph Holder March 17, 2013 at 5:37 pm

    Juan you are so right, i wonder what the DLP got out of bringing costuless to Barbados because nothing actually cost less.

    It is so sad, that Barbadians fell for that, i believe that was just to get what they could because i understand that all the party
    posters were printed in Miami and all the give aways came in the

    Cost u less is a big disappointment, it goes to show, they cannot be trusted, and we all fell for it.

    I wish to ask Chris Sinckler and whoever else, have costuless help Barbadians in anyway, the cost of living still high but yet i aint
    hear a boy saying nothing.

    They mouths shut tight, but if the BLP was in power and had done the same the bias nation news paper, cbc and star com would be having a field day.


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