PriceSmart, Inc. owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high quality merchandise and services at low prices to its Members.
The company’s business primarily consists of international membership shopping warehouse clubs similar to, but typically smaller in size than, warehouse clubs in the United States. As of August 31, 2024, the company had 54 warehouse clubs in operation in 12 countries and one U.S. territory (ten in Colomb...
PriceSmart, Inc. owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high quality merchandise and services at low prices to its Members.
The company’s business primarily consists of international membership shopping warehouse clubs similar to, but typically smaller in size than, warehouse clubs in the United States. As of August 31, 2024, the company had 54 warehouse clubs in operation in 12 countries and one U.S. territory (ten in Colombia; eight in Costa Rica; seven in Panama; six in Guatemala; five in Dominican Republic; four each in Trinidad and El Salvador; three in Honduras; two each in Nicaragua and Jamaica; and one each in Aruba, Barbados and the United States Virgin Islands), of which the company owns 100% of the corresponding legal entities. In addition, the company plans to open one warehouse club in Cartago, Costa Rica in the spring of 2025 and one new warehouse club in Quetzaltenango, Guatemala in the summer of 2025. Once these two new clubs are open, the company will operate 56 warehouse clubs. Its operating segments are the United States, Central America, the Caribbean and Colombia.
The company’s warehouse clubs, one regional distribution center and several smaller local distribution centers are located in Latin America and the Caribbean, and the company’s corporate headquarters, U.S. buying operations and the company’s larger regional distribution center are located in the United States. The company’s operating segments are the United States, Central America, the Caribbean, and Colombia.
The company has purchased land and plans to open its ninth warehouse club in Costa Rica, located in Cartago, approximately 10 miles east from the nearest club in the capital of San Jose. The club will be built on a six-acre property and is anticipated to open in the spring of 2025. Additionally, the company expects to formalize a land lease in the first quarter of fiscal year 2025 and build the company’s seventh warehouse club in Guatemala, located in Quetzaltenango, approximately 122 miles west from the nearest club in the capital of Guatemala City. This club will be built on a four-acre property and is anticipated to open in the summer of 2025. Once these two new clubs are open, the company will operate 56 warehouse clubs in total.
The company also historically exported products to a retailer in the Philippines, but effective August 31, 2024, the company’s business relationship with that retailer ceased, except for some outstanding merchandise orders to be fulfilled in fiscal year 2025. However, the company is exploring the expansion of the company’s export business in other markets and recently began exporting to a retailer in the Bahamas.
Merchandising
The company offers merchandise and services in the following categories:
Consumables, consisting primarily of groceries, cleaning supplies, and health and beauty aids, representing approximately 49% of the company’s net merchandise sales;
Fresh Foods, including meat, produce, deli, seafood and poultry, representing approximately 30% of the company’s net merchandise sales;
Hardlines, including electronics, large and small appliances, automotive, hardware, sporting goods, and seasonal products, representing approximately 11% of the company’s net merchandise sales;
Softlines, including clothing, domestics and home furnishing products, representing approximately 5% of the company’s net merchandise sales;
Food Service and Bakery, representing approximately 4% of the company’s net merchandise sales; and
Health Services, including optical, audiology and pharmacy, representing approximately 1% of the company’s net merchandise sales.
Growth
The company is focused on three major drivers of growth: invest in remodeling current PriceSmart clubs, adding new PriceSmart locations and opening more distribution centers; increase membership value; and drive incremental sales via PriceSmart.com and enhanced online, digital and technological capabilities.
Competition
The company does face competition from various retail formats, such as hypermarkets, supermarkets, convenience stores, cash and carry outlets, home improvement centers, electronic retailers and specialty stores, including those within Latin America that are owned and operated by large U.S. and international retailers, including Walmart, Inc. in Central America and Grupo Exito and Cencosud in Colombia. The company also faces competition from online retailers, such as AmazonGlobal and Mercado Libre in Colombia.
Seasonality
Historically, the company’s merchandising businesses have experienced holiday retail seasonality in their markets. In addition to seasonal fluctuations, the company’s operating results fluctuate quarter-to-quarter as a result of economic and political events in markets that the company serves, the timing of holidays, weather, the timing of shipments, product mix, and currency effects on the cost of the U.S.-sourced products which may make these products more or less expensive in local currencies and therefore more or less affordable.
History
PriceSmart, Inc. was incorporated in the state of Delaware in 1994.