02 Jun2006

aaprice1

I cheered the day the retail law was finally passed. I have always believed that the local retail industry was depressing when compared to many other countries because of strange distortions such as a near monopoly on large retail locations by mall owners, a strange stranglehold on large scale importations of goods, a highly inefficient distribution system and a whole host of problems that means we generally had less choice of goods, higher prices, erratic supplies and mostly pathetic service at most large retail outlets. If Shoemart (and I generally like Shoemart), for example, is the best we have to offer for middle to upper-class consumers, where when you buy shoes there are 48 different salespeople and they will only help you if you pick up their brand of shoe, because they are salaried representatives of the manufacturer and the not the retailer, then you get the picture (this also applies to appliances)… The retail law was supposed to herald the entry of seasoned retailers and to raise the level of competition which inevitably would benefit the consumers. Or at least that was the plan. So when Price Smart announced it was opening as the first large scale beneficiary of the new retail law, I was one of the first to apply for a card, even before it opened its doors for business.

And its first few months were brilliant. Well-stocked stores with merchandise previously unavailable here. I spent an obscene amount of money there and it rapidly accounted for the bulk of our grocery purchases. As the years progressed, problems between the foreign and local partners became apparent and news reports of a serious tiff eventually resulted in the foreign partners leaving, for WHAT EVER reasons. The Filipino partners took over about a year ago. Immediately following that takeover, supply problems became OBVIOUS even to the slowest consumer. Months went by when basics such as Diet Coke would not be stocked. Shelves emptied out and last Christmas they had the most pathetic selection of goods ever. Today I went for the first time in over a month. There are no longer any San Miguel products, the storage shelves are 80% empty, there is no fish section left, and 90% of the fruits and vegetable are GONE. Even the wooden bins used for veggies and other specials are gone. I was done with shopping in 3 minutes as there was simply nothing to buy. And that’s even before the 1 year transition period where they can still use the Price Smart name applies. When that period is up they don’t even have that.

My Price Smart card expires tomorrow. And I don’t think I will renew it. Just like I allowed my wife’s card to expire a few months ago and one of my employees as well. What is the use? Why pay for a membership to a store that is nearly empty? I was so irked in fact I asked to talk to the manager. All of the regular employees I had seen over the years were gone. Many of the cashiers and other floor staff have changed. The Manager lamely suggested they were having delivery problems. I asked “delivery problems, for 9 months???” He then readily admitted they weren’t able to pay the suppliers so they wouldn’t send any goods. Duhh. That’s not delivery problems, those are liquidity problems. And if I were him, I wouldn’t say that in public either. I don’t know enough about the internal details to comment about those, but I am a frequent shopper there and I can tell you it appears they are on their last legs… and I am annoyed. How hard is it to manage a glorified large grocery? Is the Philippine business environment so convoluted, so difficult, so riddled with illogical and irrational behavior that a simple food store can’t figure it out? And, actually, BRAVO to the American partners who figured this out earlier and bailed out. They left the locals who were agitating so much to sink even FURTHER into the abyss. But do I really care about the owners? No, I just lament the lack of choice for the consumers. Boo, to Price Smart/their new local owners. A BIG FAT BOO!!! Can anyone point me to a suitable alternative? Is that place in Libis any better? Why is it that almost all other Asian neighbors with reasonably open import policies have far better groceries and wholesale clubs??? Who cares if we are able to send 8 million people to work abroad if the precious funds they send home can’t even buy a reasonably priced cart full of groceries? If I had the capital, I would open MarketManila – the ultimate food emporium.. But then again, if I had to deal with the import system, the distribution system, the cartels in vegetables and other food items, the four folks who control 50% of canned goods in the Philippines, and folks who cannot, even under the threat of severe torture, not say “POR A WHYEL…OUT OP STUCK,” I too, would FAIL.

POST UPDATE : Since this post was written, S&R has had a change in ownership and management. Marketman is again an avid customer of the store and service and product selection has improved dramatically. Nov. 2007

 

COMMENTS:

  1. asunta says:

    marketman, the place in libis is called cost u less and it is owned by the same group of price smart. fortunately there is no membership. we do have veggies and seafood and meat as well. they carry most of the items in pricesmart and are open till 2am. btw i am not affiliated with them so this is not an endorsement. i shop there for my meat and fish then move to shopwise for the other items on my grocery list.

    Jun 2, 2006 | 6:46 pm

     
  2. wysgal says:

    I’ve never been directly involved in the retail business, although I can imagine the supply chain management bit of it being thoroughly interesting.

    Cost U Less, the few times I’ve been there — has had a decent selection of basic items at wholesale-ish prices. But hardly the US-type warehouse Price Smart was envisioned to be.

    Shame about Price Smart. They were one of the reasons I was thinking of packing my bags to move to Fort Bonifacio.

    Jun 2, 2006 | 7:39 pm

     
  3. sister says:

    What would you like in your next Balikbayan box? Time to make a Costco run in a Zip car… Thought you were the main customer of Price Smart, too bad they can’t keep you supplied with Diet Coke.

    Jun 2, 2006 | 8:31 pm

     
  4. Ciela says:

    CostULess is also going through the same slow painful death. My friend bought eggs from them just to find out half were already rotten. Yes they do have imported stuff, but some are still overpriced or nearing expiration. I got this shampoo which when I used seem to be half diluted with water. Imported doesn’t always mean quality. They seem to be getting low quality imported goods. I overheard a customer complain that it’s “kulang-kulang”. I basically just go there to look around. To complete my grocery list, I would have to go Shopwise or Rustan’s. Their stuff is complete and organized. The last time I was in CostULess, top shelves which used to be stocked, are almost empty. Good thing membership was free. My membership in Price Smart was never even renewed.

    Jun 2, 2006 | 9:37 pm

     
  5. Kristine says:

    Cost-U-Less is in no better shape. The last time I went there which was about a month ago, I was really disappointed since the warehouse-slash-Costco feel was already gone. They used to be well-stocked, literally from floor to ceiling. But now, there are only spaces in between what’s left of the items they offer.

    Jun 2, 2006 | 10:31 pm

     
  6. tei says:

    Been to Cost U Less twice and on both occasions didn’t buy anything. Mainly because what they had in there can also be found in other supermarkets.. read: they carry ordinary stuff/items. Yes they are also owned by the owners of Price Smart. The Filipino owners were even bragging before that Price Smart will still continue to thrive even without their foreign counterparts. What a shame!

    I usually do my groceries at Unimart. They also have a above average selection of imported items. Plus, they are cheaper than SM supermarkets or Shopwise.

    Jun 2, 2006 | 10:38 pm

     
  7. fried-neurons says:

    What a pity. That’s one of the reasons why I don’t think I can ever go back to Manila to live. Living in the west, you take it for granted that you have easy AND reliable access to certain things – an extremely wide variety of high-quality food and groceries among them. In Manila, that’s just not the case. Hopefully things improve for the better and stay that way.

    Jun 3, 2006 | 2:04 am

     
  8. mydream says:

    a couple of months ago i actually bought a box of “mochi” at costuless they sucked big time..at first i was so exited coz’ i’ve been trying to find good ones like the ones i get at “trader joe’s” in the states but i was so dissapointed…by the way would you know where i can get good quality “mochi” aside from haagen daz?…thanks!

    Jun 3, 2006 | 5:08 am

     
  9. millet says:

    Most Makro stores are also the same…. in the Davao branch, they don’t turn on the aircons anymore except in the frozen food section. (Or maybe the cold wascoming from the freezers?) I was suffocating in the heat, but I pity the poor cashiers and clerks who have to work in that environment day after day. Half of a tray of eggs I bought was spoiled, and last time I was there, rotting fruits and veggies were lumped together with the fresh, while a big bag of frozen fish fillets had ripped, and its contents scattered all over the freezer. Nobody was cleaning it up – it seemed like it had been that way for days already.

    Jun 3, 2006 | 8:26 am

     
  10. Wilson Cariaga says:

    well, you really can’t find a grocery store here where you really can buy all items you need. . .I go to Shopwise Cubao for groceries and other needs but for fish and veggies I go to Farmers Market Cubao, there is no meat shop yet that impressed me of their goods except ofcourse Santis but really it is expensive, we really have a bad quality of meat products here.

    Jun 3, 2006 | 9:09 am

     
  11. Chris says:

    Mydream, Lori of dessertfirst just posted an article on mochi. You may want to check it out :

    http://dessertcomesfirst.blogspot.com/

    Jun 3, 2006 | 10:56 am

     
  12. Chris says:

    I don’t think we have bad quality food here and marketmanila is proof of that. Marketman has been discovering so many wonderful vendors of good quality produce, meats, etc. It’s just that nobody offers them all together in one big comfortable space. Can you just imagine the Market Manila Food Emporium MM is dreaming about? That would be heaven!

    Besides, the imported stuff they offer in those hypermarts aren’t exactly or aren’t necessarily quality products… Most are junk, overprocessed, and downright unhealthy.

    Jun 3, 2006 | 11:05 am

     
  13. Marketman says:

    Take a little inspiration from the indoor or covered markets of Melbourne, the outdoor offerings at Union square, the delis and sausages from Europe, fruit from california and thailand, all our great stuff here, perhpas hte 50 most innovative produce sellers, the delicacies from our provinces, our seafood from the best sources. Some aircon. And we would have a nearly impossible financial targets… open 6 days a week. Interesting hawker center with perhpas 20 truly authentic owner operated stalls, a tea store, coffee store, cheese shop, dried fruits, local jams and preserves…yup all under one roof instead of all competing with each other…under this scenario, only the best stuff would prevail. Maybe even a section for home cooks like the best ensaimadas, cakes, etc.

    Jun 3, 2006 | 11:13 am

     
  14. JoAnn says:

    Marketman,

    I believe you can make it happen. With your MBA and experience in Management & Business Consultancy, this might be the right time for you to do it. Your vision is our vision too. Make it a reality.

    Good Luck,

    Joann

    Jun 3, 2006 | 12:13 pm

     
  15. Ichabod's hubby says:

    You think being a customer to Price Smart And Cost-U-Less sucks? Try being a supplier.

    Our company tried selling our products to Cost-U-Less last year. The amount they bought for the year costs only around 30K. And yet, one year later, they are taking their time paying up. They are paying us in installments and still owe us around 5K. If we call them to follow up our check, they say that the Price Smart office at the Fort has yet to forward the checks. We won’t be selling to them this year.

    As a consumer, I lament the lack of good quality and variety of goods here in the country. As a supplier, I have to say that it is very difficult to find a good retailer who pays on time.

    Jun 3, 2006 | 1:25 pm

     
  16. Jul says:

    What a waste Pricemart has become, but it’s not suprising since its competitors (Makro and Shopwise) don’t seem to be doing much better. Everytime I go to these places, I don’t see the crowds that would make these places financially viable. I have a friend whose firm put quite a large sum in Shopwise, and we were suprised with that decision when he made it, so I hope I’m wrong in my observation.

    I read somewhere that the Filipino’s tend to buy smaller quantities of groceries in greater frequency due to lack of spending power, thus the popularity of sari-sari stores. It’s a day to day life out there for most, and this is a reality we have to accept. It’s places like PureGold that act as the wholesaler to these small retailers. There you will find large crowds buying cartful loads of the basic necessities. Choice is not as much a priority as price.

    As for the demise of Pricemart, maybe a vulture capitalist out there might decide to buy it for a song and hopefully do something better with it. It’s a shame to let all those assets go to waste.

    Jun 3, 2006 | 3:44 pm

     
  17. Marketman says:

    Ichabod’s hubby are you KIDDING ME? One year wait to get paid?? I would have bust a carotid 6 months ago if I were you. I would have camped out outside Price Smart Taguig with a sign “This store hasn’t paid this supplier for his goods for 6 months” until they gave me a cheque. That is absurd. I would have taken out a half page advertisement in the newpaper at a cost of PHP90,000 together with other suppliers just to embarras them into paying you. And many customers would have noticed. I am so annoyed. If I knew about this sooner I would have stopped shopping at Price Smart months ago. I can’t stand it when I hear these stories… morons who run retail outfits that expect their suppliers to act as their working capital. This really pisses me off. As a direct protest I will stop all purchases from them and ask as many people as I can to do the same. And if you are one frigging day late paying your credit card company they tack on 50% per annum equivalent charges, hound you on the telephone and send you nasty letters! Double Boo on the local Price Smart… you just lost my business for good, and I am pretty sure as an individual consumer, I was in your top 1% of customers in terms of value purchased per annum! Jul, you are right in a lot of what you say, hence our preference for shampoos in sachets, cigarettes sold by the piece, etc. In general, the buying power is really weak. But having said that, neighboring countries with similar per capita incomes and high wealth concentrations can still support at least a few decent groceries or hypermarts…we seem to have a problem with it. And we can’t seem to have one decent upscale food market. If only you could merge a big Santis with stuff from Terry’s, throw in some of Rustans, Cash and Carry, Unimart, Chinatown, a fruit store or two, gulay from some of the Baguio bigwigs…then you would get closer…but so far, nada. Fried Neurons, I know what you mean…in New York, there is a fabulous Citarella, Zabars, Grace’s, etc. every few blocks and their daily turnover is more than the monthly sales of a small Rustan’s probably. Even their neighborhood D’Agostino groceries which are less than 500 m2 seem to carry more stuff than some of our stores here at 2000m2!

    Jun 3, 2006 | 5:10 pm

     
  18. gonzo says:

    There is only one reason why we in this country do not have access to the type of food emporium we all wish for: the customer base is too small to support a fully stocked Costco or Trader Joe’s (Or my personal fave when in america: Whole Foods). After decades of political bickering and econnomic mismanagement, the philippines is low man on the economic totem pole in SE Asia. we are at rock bottom; the Payatas dump of asia. that’s all there is to it.

    We are simply too poor.

    Jun 4, 2006 | 8:08 pm

     
  19. Cyrus says:

    i agree with joann. some things do suck in this country. but there are still people here who are doing their best for its good. pls. take note of this quote:

    “You must be the change you wish to see in the world”
    – Mohandas Gandhi

    Jun 4, 2006 | 8:39 pm

     
  20. Marketman says:

    I definitely see both sides of this interesting discussion. But perhaps what exacerbates the lack of a decent food store problem is not only a relatively low income base. But also the fact that even the high income folks don’t really pay as much attention to what they are eating…it is my belief (opinion) that food is lower on the totem pole of priorities when compared to neighbors with similar per capita incomes. You will often see an old fogey or village matrona getting out of their PHP4 million mercedes or BMW (daily depreciation and running costs including cost of money at about PHP3,000)at the grocery and they will buy gross limp romaine lettuce or awful apples and instant noodles for their apos. Likewise there are folks who live in PHP20 million peso apartments who have no clue what saffron or kaffir lime is… The fact that we have so many restaurants but so few of them REALLY noteworthy is another indication that we don’t really demand the finest or best value in our vittles.

    Jun 4, 2006 | 8:51 pm

     
  21. millet says:

    you’re so right…that’s why SM gets away with displaying/ selling limp pechay, lettuce with brown leaves, onions with brown stinky cores, and cabbage that looks like it’s on its 3rd incarnation. the P4M mercedes matrona just keeps buying them (well, in all likelihood, the only lettuce she recognizes is iceberg, in all likelihood). teka ,when did the beef shift from the supermart to the matrona? inggit lang ako sa P4M mercedes!

    Jun 4, 2006 | 9:07 pm

     
  22. ajyoung says:

    Is it true that Makro doesnt allow customers to carry shoulder bags or medium sized purse inside their supermarkets? Whats the reason behind this? Do they think that most of the filipinos are thieves? They even let you pay for the plastic bags for the things you bought. I know of two countries who has the same stupid policy, Zaire and Somalia in Africa. Maybe the owners think filipinos, who made them rich in the first place, are thieves. tsk! tsk!

    Jun 5, 2006 | 5:18 am

     
  23. mojitodrinker says:

    hi mm, anytime you want to open your food emporium, let us know!

    adding my two cents to the discussion. if one is to believe the author of “french women don’t get fat,” the french buy “tingi” as well. same as the japanese in the book “japanese women don’t get old or fat.” (i realize this makes me seem like someone strangely obsessed with diet books but if you ignore that i do have a point… =) )this is not because of the lack of buying power in either country but because they want to have only the freshest food for consumption. though it’s a pain, i wouldn’t mind buying small amounts of food frequently if the tradeoff were flavor and freshness. unfortunately, given that the local purchase patterns are related to economic power and not with food preference, we’re getting neither flavor nor freshness. with the big hypermarts, we would take on the american predisposition for buying large quantities of pre-processed (read: fattening) food. now do we really want to do that?

    Jun 5, 2006 | 9:52 am

     
  24. Marketman says:

    If traffic, parking fees (which really bring up your food expense) and erratic supply weren’t issues, I would shop at least 3-4 times a week. In Barcelona, Florence or Rome, the best home cooks shop a few hours before preparing their meals…they don’t have big freezers at all…

    Jun 5, 2006 | 10:09 am

     
  25. Lei says:

    I know this may come as a shock to most, but last year an office friend pointed out to me that say for example you compare the price a bottled shampoo costing around 80 pesos containing 200 ml of shampoo, you can get the cost of that shampoo per ml(milliliter). Then proceed to compute the cost of that same brand of shampoo from those that come in sachet. I kid you not, the cost of that same shampoo per ml is cheaper when it comes in sachet.

    When I first heard of this, I initially thought that they may have just gotten the computation wrong. I was really in for a surprise, when on one of my grocery trips, I pulled out my trusted calculator, proceeded to compare the cost per ml of bottled shampoo against those in sachets and it is indeed true, I have to say that for most of the local shampoo’s like Sunsilk, Palmolive, Pantene, Vaseline, etc….it is definitely CHEAPER to buy those in sachets. Though you just have to contend with a lot of sachets littering your bathroom.

    What really makes me wonder about this sales phenomenon though is that the usual rule that ‘is is cheaper to buy in bulk’ doesn’t apply to this. Though I think that it is only applicable right now to shampoo and conditioner. I really don’t know why, probably it just a marketing strategy or what but still to this day, I am amazed and we continue to amaze others when we point out that here in the Philippines, shampoo in sachets are cheaper when compared to those that come in big bottled sizes.

    Jun 5, 2006 | 10:46 am

     
  26. unpaid for a year says:

    I am a supplier of both Price Smart and Cost U Less. Both are owned by Mr William Go. I was tricked by both Thercy Quintos and Manny Dacayan who both promised me that they will pay suppliers if they continue supporting Price Smart during the transition. Now that the accounts are overdue they are hiding in some hell hole or are conveniently out of the office.
    You talk about fancy cars (porsche, ferrari, etc), ask the owner how he can afford all his fancy cars and yet can’t pay his suppliers. He can even donate money (not his after all) to journalist and pretty radio commentators.

    Jun 5, 2006 | 8:50 pm

     
  27. goodtimer says:

    geez poor me! was tricked again in going to pricesmart this afternoon. i just dropped by to buy a container of caramel-walnut popcorn to give a friend deep in the throes of depression who i was meeting at the fort. i was kinda hoping there would be some improvement in their stocks, but whoa! walang laman..as in the fruits, veggies, seafood were GONE! i used to spend thousands in that store, but this time i only rang up P600 for a couple of trays of meat.. that was the only thing i managed to buy. their inventory’s pathetic! MM i like your idea of opening a marketplace. it doesn’t have to be big, you can start small, but sell ALL the goodies we need and love to buy. sige na!

    Jun 6, 2006 | 12:18 am

     
  28. Marketman says:

    Lei, yes, I am surprised by your analysis. I used to drill into my crew that they had to buy in bulk and used coffeemate or coffee as my examples where buying in bigger portions meant savings… I am amazed by the shampoo analogy! And I can’t stand the thought of millions of used sachets clogging up drains and esteros across the archipelago…many of them ending up in the sea as well! At any rate, the whole tingi-tingi mentality is driven by such low incomes, even though GMA took an advertisement out in the paper to boast that we had some of the highest minimum wages in Asia (I wonder what kind of productivity we have…)! upaid for a year that is a horror story, I just drove by Pricesmart and there was someone test driving a red ferrari nearby…I hope it belongs to the owner and he is selling it to pay the suppliers! But that’s just speculation, of course! goodtimer, I know what you mean, they used to take a huge chunk of my grocery expenditure, now it’s zero.

    Jun 6, 2006 | 6:34 am

     
  29. Ichabod's Hubby says:

    Marketman,

    This maybe slightly off-topic but just to illustrate why prices are high and what a new supplier has to go through to get his products on the supermarket shelves and keep selling his products:

    Let’s say you’re an entrepreneur and you have a new product that you wish to sell to a supermarket chain , say gourmet flavored fishballs. During your talks you convinced the buyer that you have a good product and that your price is very affordable. The buyer agrees to make an initial purchase but gives a list of conditions:

    1) You have to purchase a copy of their software so that you can download their purchase orders online. This software also comes with an annual subscription and maintenance fee.

    2) You will have to pay a listing fee (anywhere from 10,000 to 75,000) for each store carrying your product. So if the chain has 10 stores and you wish to sell in each one of them, you already owe the supermarket a huge amount of money.

    3) You have to pay a new product entry fee of a few thousand pesos for each product they will enter into their database. So if your gourmet flavored fishballs comes in 5 flavors and 3 sizes, you need to pay a entry fee running in the tens of thousands.

    4) As the product is a new one, you have to give the supermaket a new product intro discount for a period of 3 months and you will need to join their mailer which costs tens of thousands again.

    Assuming you agreed to all of the above added costs, and one year later, your products is selling very well at the supermaket chain, the buyer will wish to renegotiate your terms.

    1) The cost for the software, the listing fees, and product entry fees, the intro discounts, the mailer fees will need to go up. Shelf and storage fees too.

    2) The chain is adding several branches this year, you will have to pay an opening support for these new branches ASIDE from the listing fee.

    3) You will have to pay an anniversary support for EACH store currently carrying for product.

    4) The chain has already prepared their marketing plan for the year, you will need to join their sales event and give additional discounts during these events.

    5) Good news. The owner of the chain likes your product very much and wants you to produce your fishballs under their housebrand. Bad news. You will have to sell it to them at 15% lower cost than your regular item.

    6) More bads news. Given the current bad economic conditions, your not allowed by the chain to increase your prices. And,oh yeah, the chain just increased their annual rebate from your sales by 2%.

    By the third year, competition has arrived and is already eating up your market share. Sales of your regular items are down but the house brand which your producing for the chain is selling very well. Too bad your margin on that item is negligible. You’re losing money and sales from your other customers are either pathetic or you can’t collect from them because they are doing worse than you. The buyer is already making noises about your poor performance for the year and talking about needing to increase THEIR mark-up on your items. What do you do?

    Now, after reading all of the above, is it any wonder why quality products hardly ever thrive in our market?

    Jun 6, 2006 | 12:38 pm

     
  30. Marketman says:

    Ichabod’s Hubby…I had no idea? I figured there were such things as placement fees for nice shelf space in the big groceries but not to the extent you describe. What a shame. Gosh, if I had the money I would open a 150-250 m2 store with stuff I liked, not stuff I was paid to sell. Problem is, the buying power here might not be enough for me to cover my rent and spoilage!

    Jun 7, 2006 | 7:08 am

     
  31. unpaid for a year says:

    Tell me about listing fee and other fees. Makro is a star here. This is my real life experience. Makro asks listing fee for all stores at Php90,000 per store they have 14 stores or so. They gave me an order of worth Php200,000 more or less. At the time I received my payment I still owe them listing fee on top of it Makro mail fee which is Php90,000 and retro bonus fee2.5% anniversary fee 1% software fee .5%. If this isn’t insult to injury their President, Bunny Khurana a ruthless indian hotshot, will return any unsold merchandise after 60 days. These are the kind of foreign investors our country needs. Investors who will milk local entrepreneurs of their hard earned money.
    On top of it all they get all the tax perks.
    Now tell me would you like to put up a business here in the Philippines.

    Jun 8, 2006 | 12:10 pm

     
  32. Another Supplier says:

    I totally agree with Ichabod’ Hubby…. I am a supplier too and the retailer he just mentioned sounded like Watsons which is owned by the SM Group. Can you imagine that after a few months of selling to this retailer you get a response from their accounting department that your company’s account is negative…meaning you owe the retailer money to cover for P600,000.00 Opening, advertising, space rental, etc etc.

    Not considering that the items are on consignment and that we get paid only for the goods sold. And goods are only considered sold if they pass through the POS. They do not even bother to reconcile missing inventory. Plus..we have to provide our own ‘diser’ and pay monthly shelf rental.

    How can you expect to have a great selection of products when our retailers are mostly “Cost To Me” instead of customers.

    Jun 8, 2006 | 12:44 pm

     
  33. mojitodrinker says:

    so really the big winnners here are only the retailers? that totally sucks!

    Jun 8, 2006 | 1:33 pm

     
  34. Marketman says:

    Unpaid and others, I agree with you for the most part and commiserate, but Unpaid, MAKRO is owned primarily by Henry Sy and previously the Ayala Group (which sold out last year or so) so it is the local folks that are milking the local suppliers… That applies to all the other large retailers locally. To my knowledge there are NO large wholly foreign owned retailers such as Walmart, Walgreens, Kmart, Toys R Us, here precisely becuase the environment, supply situation, cartelization, distribution is so messed up… I suspect a wholly owned Price Smart not subjected to unfair practices would have done well. Even in Indonesia, where things can get wild and wooly, they support dozens of larger foreign style warehouses, groceries, etc.

    Jun 8, 2006 | 3:35 pm

     
  35. Another Supplier says:

    Price Smart was actually considered a very good customer when it was still controlled by the Americans. We used to get paid 1 week before due dates…But with William Go as the majority owner….The 1-week turned into 1-year…
    With regards to your comment that the local retailers are the ones milking the local entrepreneurs…I just want to comment on an article about Henry Sy at The Philippine Star.. He said “I didnt delay my payments to suppliers, because I tell my kids that we have to be considerate to suppliers and think of their own ‘hinyong’ or how they have to protect their sense of trustworthiness with other” Well, his kids did find a way to go around it, poor, or shall we say rich old guy and his principles….Listing Fees, Distribution Fees, Shelf Rentals, Renovation Fee, Store Opening Support, Advertising Support, Annual Rebate, Quarterly Rebate etc etc etc…..Is the same as not paying your suppliers!!!!

    Jun 8, 2006 | 6:32 pm

     
  36. ivan the streetwalker says:

    To all my kindred spirits,

    I sympahtize with you all for the shi**ty way that you got treated by these retailers. I can only speak by experience and I know too well what the inner workings of these companies the worse of the lot, IMHO, is Makro.

    Unpaid,Ichibud, etc etc…

    Aside from the fact that they have all those fees, did you notice how these people dont honnor written agreements as well? We had to learn this hard way when they slashed the price agreed upon by our companies by 50% and up until today, 3 years later, Makro still owes the company a hefty amount(plus all those fees that they imposed). I swore never to set foot again on any of their stores. And dont even get me started with the sneaky way they sheild themselves from paying taxes…at your expense.

    And do you notice how high the turnover of their purchasers are? In the span of 4 years we’ve talked to 3 purchasers for our department- all of them wolves in sheeps clothing. And one even had the nerve to ask us to ‘support’ them again by supplying. The nerve. Tsk.

    MM,

    Makro is partly owned by the Sys but if Im not mistaken, theyre only share holders and dont handle operations. Ive seen Makro stores close in China and they have all but folded up in Taiwan, I suspect that besides bad variety, its these practices which made Makro’s outlet shut their doors.

    Jun 9, 2006 | 9:52 am

     
  37. Ichabod's Hubby says:

    To Another Supplier, SM still pays on time … but with deductions.8P

    Can anyone tell me whether all these fees, discounts, and rebates are standard operating procedure in most retailers abroad (and just copied locally)or were these invented by the local retailers? As I recall, I first met these kinds of conditions back when the company I work for was doing business with Makro. Ah,the joys of globalization.

    And, to be fair, not all retailers impose these deductions. Only the big chain retailers, although some of the little guys are starting to get ideas.

    Jun 9, 2006 | 10:09 am

     
  38. ivan the streetwalker says:

    Ichabod,

    I tried quatifying the results of all these added charges but cant seem to get an answer. Like Makro’s product papers, I once tried asking the circulation and even the purchaser couldnt answer me, yet they charge P70,000 per item thats on photo(!) Woe to the suppliers who’s just starting up!

    Jun 9, 2006 | 12:00 pm

     
  39. Another Supplier says:

    I think it will be nice if suppliers can organize an association with an objective of improving trade practices…..try to stop these ruthless retailers from taking advantage of suppliers specially the sme’s…I dont think these large retailers can survive without the local suppliers….just a thought.

    Jun 9, 2006 | 12:22 pm

     
  40. babyfats says:

    Let’s hope & pray that PriceSmart will overcome there problems. Instead of criticizing them let’s give them a chance to improve & prove their worth. Anyway I enjoyed being a member for 2 years since they started operating. I’m still positive & looking forward in shopping with them.

    Every company has its ups & downs. ; )

    Jun 9, 2006 | 5:09 pm

     
  41. Marketman says:

    babyfats, glad you can see the positive side to it. But tell me how you do with your shopping list the next time you visit. There is no seafood, no vegetables and fruit, no San Miguel products, etc. And the key is that there has been a management shake-up and ownership shift away from the original folks who ran it. Frankly, I am for the survival of the worthy. This was a straightforward business that they have had a lot of time to run properly. In my opinion, they shouldn’t last if they can’t cut the mustard. They seem to be the ones who have put themselves in their own predicament. For now, I’ll take my business elsewhere, thanks…hope and prayer is good, but in the business world, sound business strategy and proper management is more important. If you don’t pay your suppliers or treat them properly and you don’t have goods for the customers to buy, then you shouldn’t be in business for long. And finally, its amusing that after days of discussion on this issue here, Cocktales in the Inquirer today (June 9) has a blurb that suppliers of Price Smart are grumbling…

    Jun 9, 2006 | 5:50 pm

     
  42. kamanava says:

    i agree with you babyfats. i am also a member of PRICESMART up to now and i don’t want to see the store closing down because it became part of my weekly (shopping) routine since i got my membership.
    i shopped last week, but still the inventory is very low. i have plans of going there next week and hoping that more stocks are available by this time.

    >>>>>>PRICESMART MEMBER

    Jun 9, 2006 | 6:01 pm

     
  43. Marketman says:

    I usually like and allow a healthy discussion of issues when there are clearly two sides to it. However, I do not appreciate it when someone tries to sway opinion by trying to pad the “votes” on one side of a discussion by leaving comments on my website such as those placed above by “kamanava” – first, it’s by a first time commenter, second they used a fake email address and third, the IP locator address is oddly, IDENTICAL to the previous comment by babyfat who leaves a valid email address, possibly related to the specific company under discussion. No, no, no. If you want to honestly make a comment, you shouldn’t have hide behind a fake address. I normally delete such questionable comments but in this case leave it up so you can crucify yourselves. If either of you work for or have any related interest of any kind in the company under discussion, and if you used company email, you may have just publicly done your cause a disservice. Odd that this post has received so many thousands of page views in the past four days that if you type “price smart taguig” on google, it is the first article to appear…at least if other folks are wondering what’s going on with PriceSmart, they will get to read all of this… desperation, perhaps? who knows. Somehow the suppliers are getting more sympathy than ever! If Pricesmart does recover, we will all (customers and suppliers) see the results soon enough.

    Jun 9, 2006 | 10:06 pm

     
  44. Manila streetwalker says:

    Let the store shelves speak for themselves.

    Jun 10, 2006 | 10:56 am

     
  45. Joseph says:

    Napuna ko na ang karamihan sa opinyon at kuro-kuro dito ay tumatalakay sa malawakang problema ng negosyo ng pangangalakal nating mga Pilipino at ng mga dayuhan sa ating bansa. Sa katotohonan, isang malaking dagok sa imahe ng ating bansa ang pag-urong ng dayuhang interes sa pricesmart.

    Naiintindihan ko rin ang hinanakit ng mga miyembro, lalo na ang mga matagal nang tumatangkilik dito, gayun na rin ang mga nagpapautang dito.

    Isipin naman natin ang mga kawani ng kumpanyang ito. Isa ko sa dati’y humaharap sa mga miyembro at masayang naglilingkod sa kanila.. o sa inyo… Pero, mula ng umalis ang dayuhang kasosyo, nagmistulang walang kasiguraduhan ang aming kinabukasan. Kaya nagdesisyon ako na makipagsapalaran sa ibang bansa. (Kasama na rin sa nag-udyok sa aking desisyon ang gulo ng ating pulitika.)

    Ngayon, hindi ako masyadong nag-aalala sa pagkaing ihahapag ko para sa aking pamilya.. Pero, paano na kaya ang mga kaibigan ko na nasa pricesmart pa rin hanggang ngayon? Sa kabilang dako’y, ano naman kaya ang nangyari sa mga dating kawani na napilitan ding iwan ang kumpanya?

    Maaring sa aking mas payak na pananaw, masasabi kong mas masidhi ang epekto nito sa mga ordinaryong manggagawa na ang pangunahing pinagkukunan ng kabuhayan ay ang paglilingkod sa kumpanyang ito. Mahirap sigurong matulog ng mahimbing kung hindi mo alam kung ano bukas na naghihintay sa iyo. Pero, ano pa man ang mangyari, sana’y lagi silang pagpalain ng Maykapal.

    Jun 13, 2006 | 3:15 pm

     
  46. unpaid for a year says:

    I agree that we should form a group and ask some of our lawmakers to investigate the trade practices of all these big retailers. I think this will be a great start in establishing a truly friendly entrepreneurial environment specially for those who are starting out.
    I think we should take our grievances to another forum and let all consumers know what is really behind the prices of the goods they buy.
    If there are any investigative journalist that wants to put our story out please do so. I am sure this is only the tip of the iceberg.
    We as suppliers have worked hard for what we have. We deliver our goods to the stores on good faith. We do not ask for deposit or anything we even sell on credit so that the store will have a headstart in selling our products. However we end up with all the risk and the expense of running their store even down to the construction of their stores.
    Now tell me when this practice becomes mutually equitable.

    Jun 14, 2006 | 9:08 am

     
  47. Chris says:

    I guess the problem started when the big retailers decided they want to be landlords instead. Can you even call them retailers if they don’t buy outright a single product they sell and all their shelves are for rent?!? I guess a related issue would be renting mall space where they charge you a percentage of your sales aside from numerous other charges. This reminds me of an Italian guy who complained that back where he came from, only the mafia did these things!

    Jun 15, 2006 | 2:08 am

     
  48. mochamudpie says:

    We used to supply goods to Price Smart and it takes a really long time for them to pay. They still owe us quite a large amount of money and we won’t deliver goods to them unless they pay for the goods that they bought.

    It really pisses me off that they’re treating us like a bank. Their request for new deliver means that they have already sold the stuff that we delivered before right?! So there shouldn’t be any reason why they couldn’t pay.

    WE shop at Lung Center and Farmer’s for meat, fish, etc. and do our grocery at SM or Unimart. I must admit that I like the layout of Shopwise, however, the prices are way more expensive than the other supermarkets.

    Jun 15, 2006 | 11:43 am

     
  49. Another Supplier says:

    unpaid, i agree with you..it is time to do something for the sake of the suppliers…try to make the market fair for a change.

    Jun 15, 2006 | 12:02 pm

     
  50. unpaid for a year says:

    Can we get the others to speak up as well. Can marketman host an “eyeball” forum? I am pretty sure I can still get a couple more suppliers to join our cause.

    Jun 15, 2006 | 7:43 pm

     
  51. Marketman says:

    Sorry guys, a supplier forum a little out of my league. But if you plan something like a get together, let me know and I can post an announcement. I definitely think it is a useful idea for smaller suppliers to start meeting up and mapping out a broad strokes plan of action…

    Jun 15, 2006 | 7:48 pm

     
  52. unpaid for a year says:

    Understood Marketman just giving the courtesy as you are hosting the forum. Anyway hope we can get confirmation posted on this site and agree on a time and place.

    Jun 15, 2006 | 8:03 pm

     
  53. Another Supplier says:

    unpaid, what is your email address so we can communicate. We need to do something so we can collect from Price Smart.. and it might help if we do it as a group…

    Jun 27, 2006 | 6:45 pm

     
  54. unpaid for a year says:

    e-mail me at rtl@saleshub.com or at unpaidbypsmtandcul@hotmail.com Sorry for the delayed response.

    Jun 29, 2006 | 7:27 pm

     
  55. Another Supplier says:

    to all fellow vendors..Price Smart is now closed. I hope you were able to pull out all your goods.

    Jul 21, 2006 | 6:26 pm

     
  56. henri isaac says:

    we are one of the big supplier of pricesmart and cost u less. we have already sued them for non payment of goods we delivered – its a lot. well we may not be successful in collecting given the legal system in this country. But the owners (pricesmart and cost us less – william go and his ilk) can never escape the law of karma. it work this way: whatever money they owe us will be ‘suffered’ by their children and childrens children in different ways; foremost is poverty and second is sickness and misfortune. and this is perpetual. hope this message reached mr go. : spare your kids and your family from this bad karma. pay your suppliers or return their goods.

    Aug 23, 2006 | 11:30 am

     
  57. t hart says:

    the habit is consistent: non payment to suppliers or employees, not showing on time, deals not as agreed, side contracts, paying yet a third time for the job to be redone, laws not obeyed, lack of personal responsibilty. the person who mentions it first is shamed-ignoring who is right. this is not the way to be able to survive in business and business will go elsewhere. cheap labor is not worth the hassles. ps. karma is not vengeful but hopefully persons will see Mr. Go and others as their true selves and treat them accordingly-ignore the $$ and look to the true being. don’t let his ill rub off on you. i am sorry to hear of such loss.

    Sep 16, 2007 | 11:49 am

     
 

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