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Latino Daily News

Saturday March 15, 2014

Puerto Rican Government Concerned About Growth of “Big Box” Stores

Puerto Rican Government Concerned About Growth of “Big Box” Stores

Photo: Wal-Mart

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Puerto Rican lawmakers are studying a bill aimed at curbing the expansion of “big box” retail chains, whose growth has triggered the closure of hundreds of small businesses in recent years.

The speaker of the House of Representatives of Puerto Rico, Jaime Perello, says the proposed Small and Medium Enterprise Support Law would require that a study be conducted to estimate the business impact of the opening of any new retail outlet covering a surface area greater than 80,000 sq. feet (7,400 sq. meters).

The bill also proposes the creation of an advisory board to address issues related to SMEs and an increase - from 15 percent to 30 percent - in the proportion of government agency budgets that must be earmarked for procurement from SMEs.

The measure “is not directed against anyone,” Perello said.

Large U.S. retail chains create low-wage jobs and the profits those companies earn in Puerto Rico are transferred back to the mainland United States.

“Twenty years from now, there won’t be any local businesses,” Perello said in stressing the urgency of passing the bill, which also would reduce the wait time for obtaining permits for new businesses to 24 hours.

The Community Pharmacy Association of Puerto Rico supports the measure, executive director Maria Isabel Vicente told Efe, pointing out that the number of small establishments her organization represents has fallen to 750, down from nearly 1,200 two decades ago.

But Puerto Rico Chamber of Commerce President Jorge CaƱellas told Efe his organization opposes the bill and will not support legislation that restrict free-market competition.

A study by economist Jose Alameda Lozada estimates that every percentage-point increase in the market share of large retail chains such as Wal-Mart, K-Mart and Costco in the U.S. commonwealth results in six additional closures of small retailers and wholesalers annually.

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