Ancient Mexico Facts

As of 1996 the transformation to U.S.-style retailing was incomplete and unevenly distributed in Mexico. The most important constraint on this transformation is the limited number of consumers with middle-class or higher incomes. Per capita income in Mexico in 1996 was less than US$3,000, compared with over US$24,000 in the United States. Nevertheless, owing to the skewed distribution of income in Mexico, around 10 percent of the Mexican population was significantly wealthier than the U.S. average. All of the modern commercial sector competes for this limited number of consumers.

As a result, Mexico produced two retail worlds that barely overlapped. The wealthy shopped at U.S.-style department stores, malls, and supermarkets, while poorer people shopped in mercados and misceláneas. For example, families in the top income bracket bought about one-half of their food in supermarkets, but families in the bottom income bracket bought almost none of their food in supermarkets. Rather, they made almost all of their food purchases at markets and at small stores, where prices generally were higher, but staple items were available in the small quantities that the limited purchasing power of poor families demands. Most Mexicans did not have large refrigerators or automobiles, essentials for buying food in quantity.

In the future it may be expected that the shift toward modern retailing will continue. But as in the past, the speed of this shift will be limited by the size of the middle-class consumer base and the general level of incomes in the Mexican population. In addition, new retail innovations will eventually take root in Mexico. The most recent adaptation from the north has come in the wake of the North American Free Trade Agreement (NAFTA) with the opening of U.S.-based “big box” discount stores, such as Walmart, Costco, and Price Club, and the entry of new department stores such as J.C. Penny and Dillards. Already by 1996, experiments with direct marketing and home shopping were taking place, although the limited use of credit cards (in 1994 fewer than 5 million Mexicans had credit cards) provided a real constraint. Despite all of these changes, however, it is safe to say that the deeply imbedded tradition of going to the plaza—to buy, to sell, and to socialize—will not soon die out in Mexico.

Trackback URI | Comments RSS