No doubt as a result of its relentless determination to lower the cost of living in Barbados, it has been revealed, the new Thompson administration is entertaining discussions with a company called North West, which operates the Cost-U-Less chain of food stores.

Last week, our intrepid leader of the opposition, Mia Mottley, stunned the country when she threw the Cost-U-Less name at the feet of the government, in hopes that the odd-sounding name would reverberate along the halls of Bay Street, causing the new mighty to shudder. (Cost-U-Less should not be confused with “Costs-R-Us”, the unofficial name, in my book, for all of the supermarkets in Bimshire.

Deny that you are negotiating with this company, charged Mia, suggesting along the way that it had a “questionable reputation.”

According to the Nation, (Mon. July 14), Ms. Mottley, speaking at a BLP meeting the previous day, posed to Prime Minister David Thompson the following questions:“Is it your intention to remove a local monopoly and to put up a foreign monopoly? Is it your intention to cause the workers of that local monopoly (to lose) their jobs in the hope of bringing in this foreign monopoly?”

Since then I have been avidly surfing the net in hopes of finding out more about Cost-U-Less, this presumably giant monopoly which the Thompson administration might be encouraging to set up on our shores to the detriment of local food monopoly jobs. And. of course, I have kept a special eye out for any controversy in which it might have been embroiled.

I found out a bit about the first, but nothing so far on the second. I’m still hoping to find a “smoking gun” on Cost-U-Less.

But in the meantime,  what I have discovered, and which anybody could do as well with just a couple of mouse clicks on Google, is that any local food and distribution “monopoly” is not likely to get too worried about its hegemony being usurped by the arrival of a Cost-U-Less outlet here on our tropic shores.

At the end of 2006, Cost-U-Less earned gross revenues of just over US$222 million and a net profit of just over US$2m. It had, at that time, over 600 employees in its total operation comprising 12, to confirm, that is, one dozen, locations worldwide, and presumably counting in the head office personnel. The average number of employees per store was 50.

Now here’s a powerhouse to challenge the likes of Trimart (which alone has 600 employees in Barbados, according to Everick Eastmond), not to mention the much larger Super Centre Ltd.

According to a company profile I found at www.manta.com, “The company runs nearly a dozen warehouse club stores on remote island locations to avoid heavy competition. The stores (averaging 32,000 sq. ft.) are found on islands such as American Samoa, Fiji, Guam, Hawaii, Netherlands Antilles, and the US Virgin Islands, as well as one mainland store in Sonora, California.” (Oops, sorry, Mia, did the facts just get in the way?)

Compare that to PriceSmart, which earned US$277m in gross revenue and US$10.5m in net profit in the first quarter of this year alone.

According its website, PriceSmart owns and operates 26 stores in 12 countries, half in Central America and the rest in the Caribbean, including the U.S. Virgin Islands.
And according to a story dated July 9, 2008 in the San Diego Union-Tribune, which I found on www.istockanalyst.com, Writer Bruce Bigelow pointed out that “Central America and the Caribbean have proved to be fertile grounds for the company, which sells primarily to middle-class and affluent customers.”

But back to Cost-U-Less: The company was acquired in August last year for just CAN$52m by a much larger operation called North West Company.

Now, maybe this is the real monopoly that is going to wreak havoc here in Barbados. But wait, any company with a logo featuring what looks like five trappers rowing a canoe gives one pause.

Turns out North West was once a part of the storied Hudson’s Bay Company and continues to this day to boldly go where no other retailer wants to, bringing much-needed supplies to the far-flung former trading posts and now small towns of Canada.

“Today there are over 200 retail outlets, located in British Columbia, the Yukon Territory, the Northwest Territories, Alberta, Saskatchewan, Manitoba, Ontario, Nunavut, Quebec and Labrador, operating as Northern, NorthMart, Quickstop and Giant Tiger. Alaskan operations include 29 stores, operating as AC Value Centers and one AC Quickstop,” according to the company’s website.

Its flagship Northern brand stores operate in markets with populations from 500 to 5,000, notes the company, and a “typical store is 7,500 square feet in size.” Including earnings from its Cost-U-Less acquisition, the North West Company expects to have gross revenues this year of about Can.$1.3 billion, which converts to roughly the same amount in US dollars.

By remarkable coincidence, the new combination of the Neal & Massy and BS&T groups would in a full year, at 2007 performance levels, have a combined gross revenue of close to Bds$2.4B, or the equivalent of about US$1.2 billion.

But the regional group is concentrated right here mainly in just five Caribbean countries (T&T, Barbados, Jamaica, Guyana and Antigua), and its food stores in just T&T and Barbados (the Hi-Lo and Super Centre chains), along with its importing and distribution network, probably make it the dominant, if not monopoly, food network in the Eastern Caribbean. It would take a long, long time for anyone to catch up.

Of course, that doesn’t mean outside competitors could not, as Price Smart now has three locations in T&T. But to suggest that just by coming into Barbados, Cost-U-Less would suddenly replace a local monopoly with a foreign one and lead to a wholesale (sorry) loss of jobs strains credulity. I also wonder why Ms. Mottley would go so far in the direness of her prediction, when it was under the BLP that PriceSmart came to Barbados. There was nothing wrong with the decision to let PriceSmart in, although if you have been there recently to shop you must wonder how smart you really are.

If the fur traders think they have a contribution to make in lowering costs in this economy, let them come in and compete. Just remember, we are not Guam, but a fairly sophisticated marketplace, where consumers are crying out for some relief in their pocketbooks.