Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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RET AILING TODA Y The smart shoppers' club PRICESMART IS MAKING LATIN AMERICANS FANS OF MEMBERSHIP WAREHOUSES By María Bird Picó A 54 SCT / MAY 2012 actual stores in the U.S., but 29 across Central America and the Caribbean and, as of last year, one in Colombia. Nor might they know that PriceSmart is the offspring of a divorce from Costco. Sol Price, father of the membership- warehouse concept, merged his Price- Club chain with Costco in 1993. Owing to differing strategic visions, the Price family parted ways with Costco and in 1996 founded PriceSmart in Panama to tap emerging markets. BOUT ONCE A MONTH FLORA Ramírez, a lawyer in Costa Rica, finds herself in a one-stop-shopping paradise when she heads to PriceSmart, a U.S.-based membership-ware- house club. She stocks up on high-quality meats, fresh produce, family- size packages of rice, and even cleaning products. Ramírez often finds foreign-made appliances and household items unavailable elsewhere. She, like other customers in Central America and the Caribbean, is probably unaware that this San Diego–based retailer operates no PRICESMART'S ESCAZÚ STORE IS ONE OF FIVE IT OPERATES IN COSTA RICA. A public company, PriceSmart keeps a low profile but is a darling of a few North American stock analysts. Given Latin America's healthy economies and growing retail markets, the company ap- pears to be in the right place at the right time. "PriceSmart does well because in some cases they are the only vendor sup- plying the things that people are looking for [in these countries], primarily prod- ucts only available in North America," said Brian Stoffel, a stock analyst at The Motley Fool. "They also pass along to their customers the pricing advantages they have because of their size." Stoffel says he believes Central Amer- ica's growing appeal to North American retirees pushes up PriceSmart's business outlook, as does the retailer's foray last year into Colombia, which, with nearly 46 million people, is South America's biggest market after Brazil, Argentina and Peru, in that order. Unlike Brazil and Argentina, though, where Sam's Club currently operates, Colombia has no membership-warehouse clubs. PriceSmart now has some 1 million members across 12 countries and in the