Rising Cost of Living

[DrChrisHE]

Darn it Chris...I was just about to ask the Gini coefficients of each of those countries

Seriously, Matilda...I have noticed the same thing about the colmados vs the bigger supermarkets. We shop once or twice a month at PriceSmart (I'll post prices after this Saturday if people find them useful), and in between at Jumbo or Iberia and I used to shop the outdoor market a lot. The question is: "Are the colmados NOT marking up their items in order to help the little guy (let's face it, people without cars and other ready transport frequent colmados for most of their food, whereas people like myself use them to 'fill-in' where we run out or for specialty or spur of the moment items)?" From about two years ago to now, it seems to me that the colmado prices have NOT increased nearly as much as say Jumbo, or various other large markets. For awhile, I thought there was just a lag, but it seems to be going on longer.

Another thing I don't understand is why people don't shift their consumption patterns. When one type of food goes up substantially in price, we shift to other foods. It's called being price sensitive. We aren't talking about switching from filet mignon to Porterhouse steak either. I'm saying if chicken breasts are too expensive, we buy whole chicken. If papas are more costly than yucas (or some other starch) we switch. When certain local vegies or fruits are in season and cheap, I buy those. I refuse to buy some of the ridiculously priced imports. Sometimes we splurge (and sometimes it's unintentional like with the onions I bought this weekend--the sign didn't match the tag--mistake on my part.) I try to balance my family's nutrition within a certain financial constraint. Is there simply a lack of education on substitutes or are these viewed as inferior?

 

[bob saunders]

Jumbo and other large stores are large for just that reason, they have a higher profit margin than the colmados- purchasing power and economy of scale...etc. Mind you they also have more advertising costs...etc. I've also noticed that the prices people are paying in Sosua seem to be higher than say Santiago or even Jarabacoa.

 

[DrChrisHE]

Jumbo and other large stores are large for just that reason, they have a higher profit margin than the colmados- purchasing power and economy of scale...etc. Mind you they also have more advertising costs...etc. I've also noticed that the prices people are paying in Sosua seem to be higher than say Santiago or even Jarabacoa.

Bob--Yes, they have advertising costs but as you said they also have purchasing power and economies of scale...so in theory they SHOULD be able to hold the line on prices instead of just passing it on and saying "We have no control over this--all prices are rising." As Matilda said, the colmado prices are not going up and one would think that a smaller business would be disproportionately impacted by rising costs, yes/no?

Have you been surveying the different parts of the country over a period of time? I'm just wondering if this is a consistent difference across the country. I know that high end tourist areas tend to be more expensive.

 

[NotLurking]

For comparison and reference

Here is a list of items purchased Today in La Sirena/Super Pola, Sto Dgo.

<center>
<table border="1"><tbody><tr> <th>ITEM</th> <th>QUANTITY</th> <th>ITBIS*</th><th>PRICE**</th></tr><tr><td>Bistec Cadera</td><td>1 lb</td><td>0</td><td>87.95</td></tr><tr><td>Pan de agua</td><td>bag 10 units</td><td>0</td><td>29.00</td></tr><tr><td>Nestle Corn Flakes</td><td>500 grams</td><td>13.10</td><td>94.95</td></tr><tr><td>Tomate Bugalu</td><td>1 lb</td><td>0</td><td>17.95</td></tr><tr><td>Crackers Club Social</td><td>27 unit packs</td><td>12.41</td><td>89.95</td></tr><tr><td>Yautia Blanca</td><td>1 lb</td><td>0</td><td>25.95</td></tr><tr><td>Cilantro</td><td>small bunch</td><td>0</td><td>9.95</td></tr><tr><td>Cilantro ancho</td><td>small bunch</td><td>0</td><td>5.95</td></tr><tr><td>Chuleta de Cerdo</td><td>1 lb</td><td>0</td><td>82.95</td></tr><tr><td>Ala de pollo</td><td>1 lb</td><td>0</td><td>49.95</td></tr><tr><td>Pecho de Almendra</td><td>1 lb</td><td> 0</td><td>34.95</td></tr><tr><td>Tampico </td><td>10/8 oz box</td><td>13.95</td><td>99.95</td></tr><tr><td>Arroz</td><td>20 lbs</td><td>0</td><td>295.00</td></tr><tr><td>Habichelas Pinta</td><td>2 lbs</td><td>0</td><td>67.95</td></tr><tr><td>Ligo Raisins</td><td>11 oz</td><td>7.58</td><td>54.95</td></tr><tr><td>Coca Cola</td><td>2.5 liters</td><td>6.89</td><td>49.95</td></tr><tr><td>Cafe Sto Dgo</td><td>8 oz</td><td>0</td><td>35.95</td></tr><tr><td>Queso Danes</td><td>1 lb</td><td>0</td><td>135.00</td></tr><tr><td>Habichela Negras</td><td>2 lb</td><td>0</td><td>57.95</td></tr><tr><td>Lechuga Repollada</td><td>1 lbs</td><td>0</td><td>19.95</td></tr><tr><td>Linda Sal</td><td>18 oz</td><td>3.17</td><td>22.95</td></tr><tr><td>Hellmanns Mayo</td><td>16 oz</td><td>11.86</td><td>85.95</td></tr><tr><td>Spam Less Salt</td><td>12 oz</td><td>20.55</td><td>149.00</td></tr><tr><td>Campbell's Can Soup</td><td>10.5 oz</td><td>6.89</td><td>49.95</td></tr><tr><td>Platano</td><td>unit (big)</td><td>0</td><td>8.95</td></tr><tr><td>Fab Total</td><td>2000 grams</td><td>27.58</td><td>199.95</td></tr><tr><td>Azucar Refina</td><td>5 lbs</td><td>0</td><td>64.75</td></tr><tr><td>Heinz Ketchup</td><td>14 oz</td><td>9.37</td><td>67.95</td></tr><tr><td>Cebolla Roja</td><td>1 lb</td><td>0</td><td>27.95</td></tr><tr><td>Downey</td><td>1 liter</td><td>7.58</td><td>54.95</td></tr><tr><td>Esponja Alambre</td><td>1 unit</td><td>4.82</td><td>34.95</td></tr><tr><td>Colgate Dental 1</td><td>150 grams</td><td>11.72</td><td>84.95</td></tr><tr><td>Guineo Verde</td><td>1 lb</td><td>0</td><td>9.95</td></tr><tr><td>Aujama Fresca</td><td>1 lb</td><td>0</td><td>15.95</td></tr><tr><td>Princesa spaguetti</td><td>400 grams</td><td>0</td><td>19.95</td></tr><tr><td>Guandul La Famosa</td><td>15 oz</td><td>6.20</td><td>44.95</td></tr><tr><td>Mistolin Lavaplato</td><td>1 gallon</td><td>32.41</td><td>235.00</td></tr><tr><td>Milex powder milk</td><td>1000 grams</td><td>0</td><td>282.95</td></tr><tr><td>Nutra powder milk</td><td>1800 grams</td><td>0</td><td>429.00</td></tr><tr><td>Jabon Nutrimilk</td><td>1 unit</td><td>3.58</td><td>25.95</td></tr><tr><td>Jabon protex</td><td>1 unit</td><td>2.34</td><td>16.95</td></tr></tbody></table></center>

* the current ITBIS rate is 16% and is listed for reference only
** Price includes ITBIS

NotLurking

 

[bob saunders]

Bob--Yes, they have advertising costs but as you said they also have purchasing power and economies of scale...so in theory they SHOULD be able to hold the line on prices instead of just passing it on and saying "We have no control over this--all prices are rising." As Matilda said, the colmado prices are not going up and one would think that a smaller business would be disproportionately impacted by rising costs, yes/no?

Have you been surveying the different parts of the country over a period of time? I'm just wondering if this is a consistent difference across the country. I know that high end tourist areas tend to be more expensive.

What I inferred but didn't say is: Most large stores are larger and more profitable because of a mind set- they are greedier and know just how far they can increase their prices and still sell.

 

[DrChrisHE]

What I inferred but didn't say is: Most large stores are larger and more profitable because of a mind set- they are greedier and know just how far they can increase their prices and still sell.

Sad but true.

The other factor is that there is a certain type of person (the ones who think I'm nuts for going to the outdoor market) who won't venture into "other" types of establishments. Unfortunately, where we live I am surrounded by people like this. Yes, on any given day at the outdoor market in SPM, I AM the only gringa (and get lots of attention/help, but it's fine--I've only been treated respectfully). I think Matilda can probably comment on her experiences there too.

The flip side of this is when we go to PriceSmart, one sees a completely different side of the DR than at the outdoor market. Of course my kids are more comfortable with the PriceSmart type of store (being from the US) but I bring them to the outdoor market because I think they need to participate in this society and not just be spectators. We discuss the price differences and who directly benefits when we shop at each location. This was true in the US too--using local farmers markets keeps the smaller farmers & vendors in business.

 

[NALs]

Bob--Yes, they have advertising costs but as you said they also have purchasing power and economies of scale...so in theory they SHOULD be able to hold the line on prices instead of just passing it on and saying "We have no control over this--all prices are rising." As Matilda said, the colmado prices are not going up and one would think that a smaller business would be disproportionately impacted by rising costs, yes/no?

Depends on the goods being offered.

Colmados reach most of the population, but they carry a very narrow variety of products, mostly traditional food used in traditional lower income Dominican cooking and lots of rum and beer.

Supermarkets in the DR carry a much greater variety of products, many if not most of them are imported and that, I think, is a major difference, assuming all other variables remains constant.

Comparing modern supermarkets to inefficient and small mom and pops stores is a little extreme when those differences are not taken into account.

Also, I do wonder how many colmados actually pay for their electricity or any other services they use to run their business.

Employees at a colmado are usually family members, so wages is another issue that doesn't affect colmados in the same way it affects large efficient stores.

You know, its the little things that at the end of the day makes the biggest difference.

People are too quick in blaming someone of being greedy. That should be left to last resort, after all other possible reasons for explaining the difference has been analyzed, and even then, being careful in arriving to such conclusion.

-NALs

 

[amparocorp]

mom sends her 7 year old daughter to the colmado with 10 pesos to buy 2 potatoes. when the little girl comes back and tells mom she needs 1 more peso, as the price went up, mom runs down to the colmado, in her pajamas and hair in curlers, and bitches out the owner. in supermercado nacional mom puts a 5lb. bag of potatoes in the cart and says to her girlfriends at home that she went shopping today and food is getting very expensive.

 

[Matilda]

Also, I do wonder how many colmados actually pay for their electricity or any other services they use to run their business.

We pay for all of our electricity, and it costs a small fortune

Employees at a colmado are usually family members, so wages is another issue that doesn't affect colmados in the same way it affects large efficient stores.

We employ no family members and the staff are paid at least double minimum wage

-NALs

Be careful of making assumptions and explain to me how Jumbo supermarket can charge 3 RD$ more for a 20oz bottle of coca cola or Sprite, more for tomatos, mangos and many other items than we do. We mark up everything by 30-50% apart from Dominican staples like platanos, rice and sugar, which have a lower mark up. We need such a high mark up in order to pay for the staff and the electricity.

Matilda

 

[ben oregon]

here in the usa we are hopping for the economy to restart in the positive right after the presidential election.
As for the USA and the rest of the world ,the"Gene is out of the bottle" and we can not put it back.we will have to reavaluate the way we live our life and spent our money.The DR is still one of the less expensive place to be an leave a good retireing life.
Think about it!! an affordable hotel in the Bahamas or Hawai will cost you at least USA$185/night and extra $ 30 for breakfast.the average studio in HAwai is about 400 thousand $. In the USA it's impossible to leave in a metropolitain area in a house for less than1/4 million$ .with a %400 stress level.here worcking for$20/hour will get you nowhere.(you are consideret as a poor american).
So the DR LOOKS VERY GOOD TO ME. Yes it will get a little harder for the next year but people in the USA need to decompress some where, some how and the DR is an excellent alternative ,better than Mexico;.