Time To Downsize Hypermarkets? A Reboot For Argentine Retail

Responding to changing consumer habits, big box retail in Argentina have started converting outlets to offer an easier and cheaper shopping experience.

In a Buenos Aires supermarket
In a Buenos Aires supermarket
Natalia Muscatelli

BUENOS AIRES — Facing low-growth forecasts in 2018, on top of years of declining sales, Argentinian supermarkets and hypermarkets are seeking new ways of enticing customers who increasingly are turning away from massive big-box shopping experiences. It is not just about inflation and Argentines' declining purchasing power, it is also a response to changing consumer attitudes that can be seen worldwide.

For the big chains, falling consumption figures and high rent costs mean supermarkets are no longer profitable per square footage.

It is a time of general crisis for big retail surfaces. Last week, for example, France's Carrefour — which has many outlets in Argentina — announced it would convert 16 hypermarkets into wholesaling outlets, to reduces shelving costs and capture customers buying in bulk to get the best prices.

Meanwhile, wholesalers Diarco are taking the opposite approach. Just a month ago, the firm announced it would open smaller, neighborhood stores. These typically cover around 300 square meters and target both local shopkeepers who tend to buy there, and ordinary shoppers who had previously frequented big stores or Chinese markets. Vital, another wholesaler, is reportedly planning similar moves this year.

Asian businesses in Argentina, whose total sales rose barely 5% in 2017 after falling 12% in 2016, are also planning new distribution centers that double as wholesale outlets. Yolanda Durán, head of the Asian business owners' association CEDEAPSA, said the sector would cut commissions paid to wholesalers and assure better product prices by dealing directly with the industry. This could cheapen products by up to 28% compared to prices in big supermarkets.

Welcome to Carrefour in Mendoza, Argentina — Photo: Tjeerd Wiersma

Walmart's Juan Pablo Quiroga explained the U.S.-based retailers strategies for 2018, citing three fundamental points: pricing, innovation at points of sales and electronic commerce. Walmart will keep its Every Day Low Price policy, Quiroga said, and boost its brand by cutting down on one-off promotions ("two for one"), to dissuade people from visiting their supermarkets only on specific days. Innovation will include opening new businesses inside their premises to lower operating costs. These will act as rent-paying "tenants', like laundries, kiosks or payment centers inside big shopping surfaces.

You have to adapt to customers' changing habits.

"The traditional hypermarket of 13,000 square meters is losing traction across the world," says Quiroga. Which is why, he explains, the brand wants to reduce its own sales surfaces to as small as 6,000 square meters, cutting logistical costs.

Walmart's online sales are a source of potential growth, with its Store Pickup service, used for online purchases, proving increasingly popular. The service is available in 21 of its 106 outlets in Argentina, and sales with Store Pickup have reached 1.8% of all its sales.

Stay in your car

Other supermarkets like Cencosud, Jumbo, Disco and Vea are introducing very similar "drive thru" or al auto services, where the shop will load what you bought online into your car. This is available in some outlets inside the capital and the Buenos Aires province, allowing customers to buy online or by phone and take their purchases home for free, "without getting out the car and in the hours that suit them best," declares Jumbo, a Chilean brand.

Such novelties have become crucial for retailers, says Quiroga, as "you can't just open branches to grow, and a big part of your investment must go into conversions."

He says the major retail players must evolve with the times. "The hypermarket model of the 1990s isn't working like before," Quiroga concludes. "It is not enough just to have big retail space to cover your market today. You have to adapt to customers' changing habits."

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How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.

But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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