Consumer Products, Wholesale and Retail Distribution

Retail trade and distribution of consumer products is one of the fastest developing and biggest sectors of Trinidad and Tobago’s economy. It includes the trade of consumables such as food, clothing and textiles, furniture and tobacco products.

According to the 2006 Review of the Economy, wholesale/retail trade, and restaurant and hotel service sectors employed roughly one in five people deemed employable. In fact, this industry attracted almost 20 per cent of the country’s labour force in that year.

Competition in the local retail market has been keen and the possibilities of extending the market are limited. This restriction has made it difficult for market players to attract clients. Consequently, these business owners have had to search for new means to increase their income. Many retail distributors said that they followed ads in newspapers and other media to check competitors’ sales activities, and that they watched general economic conditions to anticipate consumer buying patterns.

What still holds true is the statement in last year’s Who’s Who that even though Trinidadians “might complain about rising prices, the reality is that the world sees this country as a market full of consumers with relatively high disposable income, well able to pay those prices. The expanding variety of high-end brand names on the market is proof of that.

“With prices as far-ranging as the market from which they come, consumers have the choice of buying a pair of shoes for $60 or $600. The same holds true for clothing, personal care items, electronic devices and anything else the consumer desires. Caricom visitors continue to find Trinidad a shopper’s paradise.”

The use of private-label merchandise and the consolidation of buying departments have also increased the responsibilities of local retail buyers. Private-label merchandise produced for a particular retailer requires buyers to work closely with vendors to develop and obtain the desired product.

The downsizing and consolidation of buying departments increased the demands placed on buyers because, although the amount of work remained unchanged, there were fewer people to accomplish it. The result was increased workload and levels of responsibility for the individual.

In addition to fierce competition in the retail market, new areas of business growth, such as in electronic commerce, and changes in consumer habits and interests in brands are forcing market players to adapt.

One of the main concerns remains rising consumption. This is stimulated by more easily accessible bank loans enabling people to buy more long-term consumption products.

It is for this reason that greater purchasing power of the consumer, and the diversification of the country’s internal market, continue to be dominant forces in both the wholesale and retail distribution of consumer products within the country.

With the stakes high in the consumer products industry, Trade and Industry Minister Kenneth Valley said that Government had begun several initiatives towards investment promotion, export development and the development of external transport. These initiatives are inextricably linked to diversifying the economy and reducing the country’s dependence on the energy sector, as well as to achieving self-sustaining growth. In this regard, eTecK was established to develop inward investment and the National Enterprise Development Company was created to assist in the development of small and micro enterprises.

Additionally, the Exim Bank was recapitalised to provide exporters with favourable credit terms and information on new market opportunities, while regulatory agencies such as the Customs and Excise Division, Food and Drugs Division and the Bureau of Standards were strengthened in order to monitor the quality of imports into the country.

But with no time to lose, and the survival of companies at risk with each new product launch, companies at the forefront of the local consumer products market put a heavy emphasis on product development, using some of the most advanced simulation tools to evaluate alternatives, weed out bad ideas, spot and fix mistakes in the early conceptual stages of development and optimise designs so products could sail through testing and production to get to market quickly.

Professional purchasers said that they considered price, quality, availability, reliability, and technical support when choosing suppliers and merchandise. With growing regulatory complexity and a more diverse range of target consumers has come an unprecedented level of product development activity. Such products include soaps and detergents, beauty and personal care items, household batteries, over-the-counter drugs and pet foods. This phenomenon has resulted in an unprecedented increase in prices.

In 2007, consumers have had to pay higher prices for steel, PVC, bread, flour and chicken. Due to unfavourable weather, consumers have also had to pay higher prices for vegetables.

Among greater obstacles and tougher challenges to wholesalers and retailers alike include labour shortages, bottlenecks in shipping and increased supply-side costs. April 2007 proved to be particularly eventful as port workers waged industrial action posing a major setback. Importers incurred severe losses as containers at the country’s major port in Port of Spain were not cleared for almost three days and ships loaded with goods remained anchored at sea. Businessmen were forced to absorb extra costs, such as demurrage or port rent, with the Downtown Owners and Merchants Association claiming that the problems at the port were reducing competitiveness and affecting the country’s economic health.

But since the installation of Weiger Koornstra, new chief executive of the Port of Port of Spain, the port has increased its efficiency and moved from ten moves per berth hour to 15. Koornstra works for Portia Management Services, the international arm of the UK-based Mersey Docks and Harbour Company (MDHC), which signed a three-year contract in February 2006 to manage the port.

Koornstra has been credited with an improvement in truck turnaround times from two hours to approximately 50 minutes, which reduces the congestion surcharge levied by the Association of West India Trans-Atlantic Steam Ship Lines (WITASS).

While the Trinidad and Tobago Chamber of Industry and Commerce maintains that the Minister of Finance should “reduce duties and taxes on food before it is placed on the shelves of wholesale and retail suppliers in an effort to reduce the cost to consumers”, it can be agreed that hikes in the price of goods determine the choice of product that local consumers buy. Current trends indicate that most Trinidadians and Tobagonians’ spending habits will continue to be price-driven, despite having a higher spending power per capita compared with other nationals within the region.

Home  | Industries  | Articles  | About Us  | T&T Fast Facts  | Get Listed  | Partners  | Feedback  | Site Map  | Privacy Policy  | Terms of Use