Home' Trinidad and Tobago Guardian : February 16th 2017 Contents BG18 | COMMENTARY
BUSINESS GUARDIAN guardian.co.tt FEBRUARY 16 • 2017
Out with the fake
There are counterfeit brands,pi-
rates of the West Indies (vid-
eo copies), cloned computers
and, very recently, fake news.
In business, is it likely that
we might also have fake en-
trepreneurs? Is it possible that many of the
business persons are not what they are made
out to be? The use of the word "entrepreneur"
is sometimes used as a substitute for business-
man. This can have implications for value and
wealth creation and have national economic
The performance of the private sector was
recently highlighted in the IDB's report (2017)
titled, "Are oil and gas smothering the private
sector in T&T?." It posits that local companies
under perform in sales growth and under in-
vest in research and development than other
The report adds, "In general, firms in T&T
show an inferior level of performance com-
pared to small economies." This is especially
worrying if the business sector is to carry on
in the post-oil and gas economy.
But can a new mindset and skill set be re-
quired to shift the paradigm and so transform
the economy. The current thinking among local
business persons might be part of the problem.
Has the energy economy spoilt business people
to the extent that they have become traders and
less innovators, unlike world class companies.
Owners of small- and medium-sized enter-
prises (SMEs) in T&T are generally not leaders
in their field. They do not have a dominant
market strategy mindset. They settle for just
enough to make a living and maybe a bit more.
Think about the restaurant business, they
generally are single unit operations, sell es-
sentially what others are selling and not in-
novative. They have little propensity to scale
up the business either through franchising or
accessing the public capital market to expand
Of course, we have a few exceptions, the
best would be the Rituals chain of coffee
shops. However, they have not gone public
and demonstrate global ambitions yet.
Owners of SMEs as a rule do not use superior
technology to improve their business models.
Many here still use archaic point-of-sale sys-
tems, poor inventory management techniques,
deliver exceptionally poor service and use an
inefficient distribution system, making them
vulnerable to foreign competitors.
For the average business owner, today is in-
deed yesterday-what made us successful in the
past will cut it for tomorrow. How can local
book sellers, for example survive the internet? I
am sometimes amazed how easy it is to import
a book from Amazon, ship it to my Skybox and
have it delivered to my home in less time and
at a lower cost than if I went to a store.
While Amazon allows you to browse a book
before you purchase it, some brick and mortar
stores here have a prominently displayed, No
Reading Please sign.
Old places, old faces
Look at the hardware, pharmacy, and auto-
motive businesses. They all have one thing in
common: they all look like they are from the
1960s. We are still way behind the countries
that have chains and therefore they can enjoy
the economies of scale of a large operation.
They can buy in large amounts from a central
location and pass on the savings to its custom-
ers. They can advertise chain wise and spread
the high cost over many locations.
This model is not the dominant format in
T&T. SuperPharm is the big exception and
probably is heading for most of the market.
How can this evolve in the future?
Look at the supermarket industry and see
how it was transformed from single operator,
small family-owned shops to large format re-
tailers with multiple locations owned by larger
corporations. Massy Stores, JTA Supermar-
kets and Tru Valu have majority of the market.
Notice as supermarkets get bigger, the medi-
um-sized disappear or turn into convenience
The old shop keeper is gone, except in rural
areas, and the era of self service has lowered
the cost of operation, while providing better
service as one can leisurely choose what you
Apparently, the old way of placing an order
at the counter is still pervasive in many areas
Today is tomorrow
So SuperPharm has brought the big box,
chain store format with better service to the
pharmacy industry. A couple of enterprising
people will think the yesterday's model of sell-
ing from behind iron bars is not going to work.
These are the true entrepreneurs. They are the
future oriented. They see customers wanting
better value, and this could only happen with
the supermarket model.
While this model is over one hundred years
old, Clarence Saunders, who is credited for
starting what we know today as the grocery
store with self-service, was a true entrepre-
neur. He found an innovative way to bring down
food prices and so destroyed the old model
of service at the counter. But the self-service
model has spread to other retail formats in
the first world. There are few that still use a
predominantly over-the-counter model in the
developed world, and this is for products that
require some expert or technical knowledge.
SuperPharm still has a pharmacist as re-
quired by law to assist with advice.
Will our business people change their way
of thinking, especially those in the retail busi-
ness? Will they lose selling through holes and
behind a fortified environment? When will we
stop shouting what we want?
to the rescue
1.The retail landscape is just one of the
industries that is ripe for disruption.
While the supermarket chains are dom-
inant, there is space for some innovation in
the smaller size range. This market is occupied
by what we call the mini-marts and run by
many Chinese emigrants. But do we have an
Some enterprising person is going to look
at the trends: the need for more convenience,
avoidance of the traffic in built up areas and
24/7 opening hours to match people's life style.
This market is currently under served. We need
to develop our own 7-Eleven, convenience
stores that offer not just ingredients to make
a meal but meals, drinks, etc. This model relies
on franchises to expand quickly and central
warehousing and agile inventory management
systems to deliver small amounts frequently.
2.The automotive sector is another that
needs to be disrupted. Not to mention
the fuel market, the service at NP chains is
poor and has very little more than gas to offer.
It is amazing how governments can come and
go, and little has changed. The Chase Village
NP station is more than 60 years old. It is a
dinosaur with frequent stock outs.
When will the State recognise that the pe-
troleum retail market should be deregulated
and put into the hands of true entrepreneurs?
Unipet gas stations have done much better
but I am sure if they could set their own prices,
a new model will develop and maybe a different
kind of 7-Eleven.
3.The government, of course, is one of
the largest owners of businesses and
they call them state enterprises but nothing
could be further from the truth. Indeed, the
biggest fake entrepreneur is the State itself. To
move the economy forward, it's a simple case
of, out with the fakes and in with the genuine
Sajjad Hamid is an SME & family
business adviser. He can be contacted
via: email@example.com and
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