Q COSTA RICA BUSINESS / Costa Rica’s retail industry is highly competitive, retailers must monitor daily the needs of customers as well as their competitors, constantly innovating to offer consumers a variety of goods according to the latest trends, and differentiate themselves from the competition.
The market is so complex and volatile it is hitting even the big names, names like Casa Blanca, that recently filed a “convenio preventivo” (similar character to Chapter 11 in the United States ) allowing the debtor who is not yet in bankruptcy, protection from creditors for a limited period to allow it to reorganize.
According to ElFinanciero’s latest Consumer Profile (Perfil del Consumido in Spanish), Casa Blanca is third on the list of consumers, behind Gollo and Monge, when they think about buying an appliance.
Despite the financial downslide, the retailer continues adding services. For example, earlier this month it began selling unemployment and serious illness insurance at all its stores. To this is last year’s addition of orthodontics plans.
Buying on Credit
Over the past few years, the retailer added the much-needed consumer credit, calling it Flexipago, allowing customers to make purchases not only at Casa Blanca but also at Colono, El Lagar and Las Gravillas (hardware and construction material retailers).
But the competition is fierce. For example Gollo offers easy consumer credit at any of its stores, credit given regardless of income or length of time on the job, for purchases on home improvements, school supplies and so on. In addition, with only a signature Costa Ricans can purchase on credit vacation plans for travel in and out of Costa Rica.
What led the fall of Casa Blanca?
Minor Alfaro, marketing manager for the retailer, on speaking to El Financiero chose not to comment on that point, saying it is prudent to wait the come of the judicial process first, a process that began on January 12 when the “convenio preventivo” was filed.
The official, however, recognizes that the retailer is going through a period of economic hardship. However, he emphasizes that their outlets (stores) are operating normally and have plans in place to attract more consumers.
Seeing the ‘writing on the wall’, last year Casa Blanca began closing its smaller stores, arguing that their size did not permit their full line of products and services, concentrating on stores over 500 square metres (5.300 square feet).
The retailer currently employs more than 550 and operated 58 stores across the country.
“Casa Blanca is a company that is operating smoohtly. We have a commercial strategy that aims at being profitable and sustainable growth in sales of product adapted to demands of customers,” said Alfaro.