What is a Carre-four in gridlocked Sao Paulo ?

Out of town shopping arose in the 1980s in the UK. The deal was: retailer buys cheaper land and can offer cheaper prices on a greater range of products. Consumer must invest in a car in order to benefit but as a result can also make fewer shopping trips per month.

As city centres were renewed, revitalised and rebranded in the 1990s, the big supermarkets saw an opportunity to reinvent the traditional high street. Thus was born the likes of Tesco Metro and Sainsbury's Local. The city dweller could now benefit from the economies of scale and efficiencies of the big grocery retailers even though the actual store size of these urban outlets was not so large. You paid more than an out of town hypermarket but no car was required.

In fact, a city like London will have a mix of both types of store, meaning you can still benefit from the biggest and cheapest without having to travel too far. It's more of a "car optional" situation.

In the Noughties (first decade of this century), the retailers expanded into internet retailing, meaning you could now order pretty much all of your shopping online and have it delivered to your home. The economies of out of town shopping were now matched or surpassed by interacting with your customers in the digital domain. For a company like Tesco, the market leader, the potential in capturing and analysing customer data - shopping habits, preferences, frequency etc. - was a new goldmine in itself.

And for the customer, the ability to shop from home while enjoying the lowest prices quickly transformed Britain's retail landscape.

I was prompted to think about all this as I bought a 250ml bottle of liquid soap the other day. As usual, it was from the pharmacy just across the street, which scores very high points for convenience and friendliness but low points for everything else. The product range, as so often in high street shops here, is pretty pathetic and the prices are, of course, sky high. So this boring bottle of soap cost me ten times more than the equivalent in Tesco's online store: £2.70 instead of 26 pence.

Of course I was not exactly comparing like with like (a giant retailer's own-label product versus a branded offering from a small local retailer). But comparisons must still be attempted. By all accounts there is some online grocery shopping in Brazil, but at nowhere near Tesco prices. The retail landscape here in Sao Paulo is still heavily dominated by physical stores, notably French-owned Carrefour, US-owned Wal-Mart and its sister Sam's Club and Brazilian-owned Pao de Acucar, which targets a more upmarket clientele. According to sales figures for 2009, the local company was slightly ahead (R$ 26.2bn) of the French (R$ 25.6bn), with Wal-Mart third on R$ 19.7bn (I don't know if that included Sam's Club).

As everyone outside of Brazil knows, Wal-Mart became the biggest US retailer by offering bargain basement prices. Yet here in Brazil, just like its compatriot McDonald's, it is seen as aspirational middle class - and priced accordingly. You want to shake the locals and ask them why they persist in believing such ludicrous, laughable branding ?! McDonald's and Wal-Mart are the cheapest of the cheap in the US, doesn't anyone in Brazil know that ?!

My question is: why isn't a company like Tesco here in Brazil ? It must be the opportunity of a lifetime, knowing that you could massively undercut the existing market players and still charge more than in the UK ?

If Brazil was a free market, such a move would surely have happened long ago ? Seriously, I want to know what is preventing it from happening ? Is it "taxes", the lazy catch-all excuse spouted by every Brazilian and his dog ? Or is it something more sinister ? What kind of cosy cartel operates here and why is it tolerated ?

In my last post I referred to a very upbeat article by Brazilian IT journalist Angelica Mari. She is excited about the burgeoning creativity that she sees in her homeland's approach to the internet. I have an open mind on such things and would like to know more about this. But for me the overwhelming priority right now is to see an end to the insane price disparities that blight this country and punish those who do not enjoy a privileged lifestyle in Brazil.

The kind of creativity I would like to see is consumer lobby groups and market researchers using the internet to do what I just did in a few seconds: find out what things cost in other countries, do side by side comparisons and then write headline-grabbing reports and press releases demanding to know why this inequitable situation is tolerated and why Brazil's so-called leaders do nothing to remedy it ?

So in answer to my puntastic headline, what is a carre-four, the answer sadly is that a car in Sao Paulo is for yet more punishment - in terms of time, expense and inefficiency. It is for the benefit of an outdated business model.

The internet has long offered amazing efficiencies which benefit both retailer, consumer and the environment. I live in the centre of Sao Paulo yet from the dearth of choice, the lack of services, the almost complete absence of competition ... well, I sometimes think I might as well be living on the moon.