Grupo Ramos - Walmart

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
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Santiago de Los 30 Caballeros
Just got off the phone with somebody that's "inside" the Grupo Ramos and in-touch with what's happening in there...

Turns out that Walmart (NYSE: WMT) had been holding talks to buy out Grupo Ramos "La Sirena" operations, but the latter counter-offered with a partnership instead in the country and Caribbean. The deal of the initial offer was in the tune of USD$ 1 billion, but the counter offer was more appreciated as it meant a re-shuffling of shares between the two under a new corporation.

Walmart then counter offered a deal, which requires that Grupo Ramos extends the "La Sirena" coverage in the country to a consolidated amount of stores with a minimum net sales. A new distribution center with full compatibility of that used by Walmart in their U.S. and P.R. stores.


The number is between 30 and 50 (I can't be exact for biz sake) for the total of stores needed for the Walmart brand to be stamped for all operating stores.

So far Grupo Ramos is beyond the 20th store with more due to open all around the country within the next 3 years...

If you happen to see a lot of similarities in the inside and operations of the new La Sirena stores and the U.S. Walmarts, then it's for this reason...

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They're even using the new format of Walmart express stores with a twist in the DR from Grupo Ramos:

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SantiagoDR

The "REAL" SantiagoDR
Jan 12, 2006
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The high tax obligations seems to me would be a deterrent of Walmart buying out Grupo Ramos.

I have always seen it as counter-productive to the D.R.'s progress?

Look back at when Verizon sold out to Carlos Sims.

What do you think Pichardo?
 

Chip

Platinum
Jul 25, 2007
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Competition is good for the DR. I wonder how many can remember how much El Pola/La Sirena has changed in the last 10 or so years. Their customer service and prices didn't used to be really anything special but then they got the "high volume" "low margin" bug with a dose of "decent customer service" and they have taken off like a rocket.
 

belgiank

Silver
Jun 13, 2009
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I thought Walmart stood for cheap and decent quality/service.

La Sirena stands for not cheap and lousy quality/service... in comparison with local supermarkets

I only go there for their superior fried chicken...

BelgianK
 

SantiagoDR

The "REAL" SantiagoDR
Jan 12, 2006
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La Sirena USED to have the best prices around (14) years ago. (Talking large items)
I bought many larger items from them in the past and they used to give a discount when asked.
Now they always say "no".

There are still some bargains, but not like before.
Smaller items as I said before are sometimes cheaper (Example: Circuit breakers)

People were coming all the way from Montecristo/Dajabon to shop there.

The rotisserie chicken (At least at the Pola store) is always overcooked and dry.
The pan de aqua used to be the best bread around, now it is always overcooked.
I complained about it and they blame it on the dough they get from the distribution center.
(Nothing new there, always someone else fault in the D.R.)
 

windeguy

Platinum
Jul 10, 2004
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Maybe something will change in 3 years

From the OP it appears that in no less than 3 years, and probably longer, when La Sirena has 30 to 50 stores they will be large enough for WalMart to do something like buy or merge with them in some fashion. Until then La Sirena will be what they are today.
 

Mauricio

Gold
Nov 18, 2002
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Everyone involved in large scale retail in DR knows since long that Walmart and Ramos have been talking and that as soon as Grupo Ramos has the coverage Walmart needs (not only in stores but also in distribution centers) in one or another way Walmart will get involved here.
 

Mauricio

Gold
Nov 18, 2002
5,607
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Im still not sure if this is a good or a bad thing to happen. I suppose prices will finally come down a bit in the supermarkts, when Walmart sets foot here, which is good for the customers, margins that are ridiculously high will come to a more reasonable level but what will happen with the small guys, that have one or two supermarkts (example Amigo in SD) or the colmados who dont have the power to negotiate better prices from their suppliers and dont have to scale to survive on lower margins. The spread in price between buying close to your house in a colmado or minimarket for some daily needs or buying at the supermarkt 10 minutes driving will become to big and those small business will lose business.

Just what happened in Holland and many other developed countries where 'mom and pop' stores had to close because of the 'supermarket wars' that took place in the last 2 decennia.

I know that with current margins with only one small supermarket (size Hola in SD) you can make very good money, but this might change with Walmart changing the retail environment.
 

windeguy

Platinum
Jul 10, 2004
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There is no question that the entry of WalMart into the DR market would have benefits for the consumer and negative impacts on the mom and pop businesses that they will wipe out. The question is still if that will happen and not necessarily when although I suspect it will.
 

DavidZ

Silver
Aug 29, 2005
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If and when Walmart buys/merges with Grupo Ramos, the "mom and pops" will definitely be affected, but not like they are in the US when a Walmart or Home Depot comes to town. In the US, people are accustomed to seeking out the best deal and travelling to get it, and the really small local stores are not part of the culture anymore. In the DR Colmados are part of the culture, moreso than the cheapest or best place to shop. You won't be able to buy a single Sopito cube, one stalk of celery, or un-butchered chicken in the "New La Sirena/Pola", nor will they offer credit or likely delivery. Smaller "Supermercados" will take the hit, but I doubt the local Colmados will be affected much, if at all.
 

the gorgon

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Sep 16, 2010
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If and when Walmart buys/merges with Grupo Ramos, the "mom and pops" will definitely be affected, but not like they are in the US when a Walmart or Home Depot comes to town. In the US, people are accustomed to seeking out the best deal and travelling to get it, and the really small local stores are not part of the culture anymore. In the DR Colmados are part of the culture, moreso than the cheapest or best place to shop. You won't be able to buy a single Sopito cube, one stalk of celery, or un-butchered chicken in the "New La Sirena/Pola", nor will they offer credit or likely delivery. Smaller "Supermercados" will take the hit, but I doubt the local Colmados will be affected much, if at all.

excellent posting. the demographics matter, a whole lot. La Sirena might be able to sell butter at 80 peso, while the comado sells it at 90. however, the average guy maybe wants 10 pesos worth,and that you cannot get at La Sirena. also, if one checks closely, the prices at La Sirena are no great shakes. smoked herring fillets 89 peso per tin, 59 peso in the average supermarket. i have seen several such eye opening discrepancies. you look good shopping there, and coming out with a nice yellow bag. your wallet feels the pinch.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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Lower prices and greater choice benefits consumers.

We already see that with the full implementation of DR-CAFTA.

Additionally, local products have gotten better and less expensive.
 

windeguy

Platinum
Jul 10, 2004
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excellent posting. the demographics matter, a whole lot. La Sirena might be able to sell butter at 80 peso, while the comado sells it at 90. however, the average guy maybe wants 10 pesos worth,and that you cannot get at La Sirena. also, if one checks closely, the prices at La Sirena are no great shakes. smoked herring fillets 89 peso per tin, 59 peso in the average supermarket. i have seen several such eye opening discrepancies. you look good shopping there, and coming out with a nice yellow bag. your wallet feels the pinch.
If that same issue of higher prices continues if and when WalMart takes over, then there would be no added benefit for me as a consumer. I would bet the prices would be more competitive if WalMart was in charge. I agree on your assessment of La Sirena prices, but I do go there for things not available elsewhere. For example La Sirena has a selection of breakfast cereal that includes some that are not just one of 100 brands of the various corn flakes available in most smaller Dominican supermarkets.
 

drescape24

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Nov 2, 2011
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As an American, when I am at my place in Sosua the last thing I want to see is another major American store making its imprint on the D.R. .
 

windeguy

Platinum
Jul 10, 2004
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As an American, when I am at my place in Sosua the last thing I want to see is another major American store making its imprint on the D.R. .
How much time do you spend in the DR? What major American stores have made their imprint on the DR in Sosua?
 

the gorgon

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Sep 16, 2010
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I only learned in the last 2 weeks out of 8 months that the local colmado sells almost everything lower priced than La Sirena. I started doing most of the shopping for my restaurant there. from 500ml pepsi at 15RD instead of 19.50 RD to rice at 20 pesos a lb instead of 249 pesos for 10 lbs and eggs @ 4 pesos each instead of 79 pesos for a dozen etc... All down the line. Fruit at less than half the price at a local fruit market, I figured that out very early on. 20 pesos for a papaya instead of 20 pesos a pound for a 3 nad a half pound one etc...
I don't need any special brand of corn flakes! I don't eat that much processed food, nor did I sell it in the restaurant.
As far as clothes and shoes, appliances and paint etc... I wouldn't know.
Der Fish

La Sirena is a social experience, where locals can go to juxtapose themselves with gringos. the prices are nothing special, as Derfish pointed out. besides, you had better watch every entry to the cash register, becauses the prices under the items never seem to be the ones you get.
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
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Santiago de Los 30 Caballeros
I don't know if you guys have noticed, but I've never gone to Pricesmart or La Sirena, that I haven't seen people buying things in bulk for resale.

The few times I've made a lighthearted comment about how much of something somebody buys, they always respond it's because they have a colmado.

There are even folks that buy in bulk at the big stores, then go around reselling to colmados, adding yet another level to the supply chain.



Lots of colmados COULD buy at those places, but they lack the liquidity to do so in big batches. The middle biz people that buy in large amounts and later sell to colmados, do so under a loan/pay agreement, where they supply the goods and get pay on the second order for the goods that were sold as they restock the items.

The re-sellers carry all the risks if the colmado misses the payments and can't restock with new merchandise to continue the cycle.