Foreign Policy Blogs

Wal-Mercado

Teeming with bright veggies, fruits and clothes, the Martinez de la Torre market is a hallowed institution in Mexico City. But many vendors are suffering from drooping sales. Why? Across the street is a new Bodega Aurrera, a mini-supermarket owned by Wal-Mart.

Unlike stands at the market, Bodega Aurrera accepts credit cards, and the quality of its stuffs are deemed more reliable by many consumers, even if that reliability means sacrificing the chance at better taste, or the knowledge of helping a local farmer.

Then there is price, that inconvenient truth which most criticisms of big retailers overlook. Professor Thomas Reardon at Michigan State University conducted a study in 2005 that found 10 of 17 vegetables and fruits bought by Mexicans were cheaper in supermarkets. A more current study would probably accentuate the 2005 findings.

Wal-Mart’s presence in the Mexican capital, or any large Mexican city for that matter, doesn’t bother me much. Big retailers provide an additional choice for urban Mexicans, who can save money on certain staples, then turn to nearby fresh markets for other goods, especially ones where quality counts. So long as Mexico’s fresh markets are not forced out of business the dichotomy is beneficial. But in the pueblos there is more cause for concern. What if there are only one or two small markets or tiendas? A big retailers presence could drive them out of business, either through lower prices, or just because of the convenience of one-stop shopping. Weighing the benefits versus costs of Wal-Mart and other large retailers in Mexico presents a conundrum: there are six fresh tomatoes in one basket, half a dozen in another.