Monday, February 21, 2011

Big U.S Chains Rule

Imagine yourself showing up for work only to find out that your employer is no longer open for business. You are suddenly out of a job, and your company had not given any sort of notification of what was to happen. This was the predicament which employees at the local Puerto Rican pharmacy chain, El Amal, found themselves in this past weekend. To top it all of, many of these employees are owed three weeks pay. Although El Amal had filed for Chapter 11 bankruptcy in 2009, and things have not been looking all that rosy since then, it still came as a shock for its employees and many around the island.

For many, including yours truly, it was actually surprising to see El Amal hang on for as long as it did. Anyone who has visited Puerto Rico probably noticed the strong presence of Walgreens, the largest American drugstore chain. In my neighborhood alone, within a five mile radius, there are three Walgreens stores. Lo and behold, CVS Pharmacy also opened up several stores on the island last year. American retail chain stores dominate the local Puerto Rican marketplace, and this doesn't just apply to drugstore chains. As we were passing by Dorado on the highway the other day, I couldn't help but notice the inextricably long line of cars at the drive-thru at Krispy Kreme. I still remember last year when the first Krispy Kreme opened in Guaynabo, where dozens of people spent the night outside in hopes of being the first ones to step inside the doughnut mecca. Krispy Kreme has since opened up two other stores, one in Caguas and the other one in Dorado.

Most American fast food and retail chains do very well in Puerto Rico. In fact, KFC and Wendy's are both expanding their franchises on the island. This is not only bad news for the ever-growing obesity problem but it is also a mixed blessing for the local economy. As we've seen with El Amal, many Puerto Rican businesses have become affected as they lack the massive capital and economies of scale to compete with these huge American corporations. On the other hand, these companies do create jobs and pay taxes. Aside from Capri and Pitusa (both are discount retail stores) there aren't many local retail chains. The same goes for fast food, except for my beloved El Meson Sandwiches. While the statehood issue has always been a subject of ongoing debate on the island, the majority are ebullient when it comes to the arrival of yet another Gringo-owned retail store or fast food chain.


Kofla Olivieri said...

I've always wonder how these companies make money. Same applies here in Philly, two or three Dunkin Donuts, Rite Aid Pharmacy, Walgreens within blocks from each other.

It is a shame that employees first learned about their company closing when they showed up for work and find their doors locked. It is all greed.

adriana said...

El Amal is now being investigated for violating both local and federal laws, as they are legally obligated to notify its customers of its closing.

Here's an article which appeared in Caribbean Business: