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Cost buster

IMG_5707The millions of dollars in concessions it received from Government have not spared Canadian warehouse retailer Cost-U-Less from a “tough” Barbados debut.

It has been a hard first six months for the Welches,
St. Thomas company, whose entry here was associated with promises of more affordable food prices, and its overseas bosses are blaming the “big challenges” partly on unmet promises related to the expansion of the Ronald Mapp Highway and an adjacent shopping centre – both
still unfinished.

Additionally, parent company The North West Company Inc., while promising the operation was here to stay, said it was finding it difficult to lure customers away from established competitors and might have misjudged Barbadian consumer tastes.

Barbados TODAY investigations revealed that news of the CUL challenges here was communicated to investors and market analysts in a conference call about three
weeks ago.

In that interaction The North West Company’s President and CEO Edward Kennedy informed participants that
two “tough” quarters in Barbados caused “a flattish” outcome, blaming this partly on “strong competitive reaction” on the island.

That, however, was not the end of the story, as Vice-President and General Manager, CUL, Tom Kallio, said the difficulties his company faced here were largely due
to unexpected infrastructural issues.

Speaking to Barbados TODAY from CUL, St. Maarten, the official said his company was promised that by the time its Barbados branch opened, expansion of the Ronald Mapp Highway into four lanes between Warrens and Bagatelle would have been completed.

He also said developers of the Welches Plaza, next to the CUL warehouse, had also given an assurance the complex would have been finished by now, but this had not yet materialised.

“We really believe that [highway] would have been completed by the time we opened. It’s still not, so that’s a challenge for us and then also the shopping centre that we are located in we believed that it would have been opened at the time that we opened and it’s not,” he said.

“These are in the hands of other people and hopefully the other people, the Government and the private investor, will live up to their agreements. We know the shopping centre is going to open up so that should happen.

“It’s difficult, it’s not as smooth as how we planned it out. We had nice drawings of how it was all going to go, people were going to come in and it was going to be an easy flow and it’s a little bit of a restricted flow and Highway 2A was supposed to have been done. Obviously the rotary that’s there is a big help, but being able to have that four lane
road running from Warrens all the way to us would have been the ideal situation.”

Kallio also said another “major challenge” was
staff training.

“When you open up a new business you have got a lot of new people to train, you have a lot of work to do, it’s hard work. We are very pleased with the people we have but it takes time to build that culture, to build that learning, but it’s moving along . . . .That’s a challenge that we knew we would have and it’s a challenge that we are continuing to work with,” he stated.

Despite these issues, the CUL boss said he and other officials were working to turn things around heading into 2014 and that they had “absolutely” made the right decision in coming to Barbados.

“We did a lot of research before we entered into the market. We knew what we were getting into and we did
feel it was the right move at this stage and its positioning
us for the future, which is what we are about and we are very happy with the decision we made and what’s going on,” he said.

“We are positioning ourselves for the future. This isn’t something we were looking at for today, we are looking at where we are going to be tomorrow and we believe that the Barbados market is the right market for us to be in and we are going to do very well there.”

Kallio also conceded that the company would have to work hard to win Barbadian consumers.

“The most important point that we have to remember is that just because you open up doesn’t mean that everybody’s going to come to you and love you and just mob you and take care of you,” he noted.

“You have to earn that business and you have to earn that trust and it takes time and you have to work hard at it, you have to develop and we went into it with that type of a plan, that we were going to earn the Barbados customer, we are going to earn their trust.

“But you are not just going to steal them away, so we are going to work very hard, every day we are going to earn those customers.”

One Response to Cost buster

  1. Ms. Bemused September 28, 2013 at 8:26 am

    What? Are u kidding me? Cost U Less’ failure in the Barbados market has nothing to do with the unfinished highways. It has only to do with the fact that these overseas conglamerates come to Barbados promising Bajans better prices, receving countless concessions not available to Bajan business owners, then when they set up here renege on their promises of lower prices and try to suck the blood out of Bajans. One thing they don’t ever expect is that when you turn on a Bajan, the strike back from the Bajan hits you where it hurts most, in your pocket. CUL opened on the Saturday to the public and goverments payday fell on the Monday. All of my famly including myself went to the opening and saw prices we could really work with, wrote them down in comparision and went back to shop on payday. Low and behold all and I mean all of the prices we wrote down went up and after a moment in shock we made a bee line for the door. Now we shop at CUL for one item only, diapers.


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