#761 – The Expat Files: Latin America’s Retail Revolution and Cultural Shifts

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border, down Mexico way That's where I fell in love when the stars above came up to play and now as I wonder Hello there all you expat wannabes I'm Johnny Mueller and you're listening to the Expat Files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started All right, so I got this email from a young lady. She said Johnny You've been in Latin American now for over 20 years, right? That means you got to Latin America before a lot of the technology arrived there like the internet smartphones Surveillance cameras and stuff maybe someday Johnny you'd like to tell us how Latin America has changed since you first arrived there

[00:52] And we're kind of a pioneer at least in our minds you are then she says working on coming to your next seminar Johnny Probably will be coming alone because my Significant other is not quite on board with a plan B yet. Either way. I'm coming Johnny with or without the guy So save a spot for me. Love the show is Johnny signed Cynthia from Upper, Michigan Hmm. All right sin. Thanks for that. And as far as how things have changed in the past Well, it's been 27 years now I could probably do three or four shows on that but now that you've asked just the other day I was thinking about none other than Walmart. Hey, I'm no fan of Walmart, but man It's got a huge presence here now in Latin America Why because well, you probably heard me say this in the past show But it's the largest employer in all of Latin America and man when I got down here

[01:42] 27 plus years ago, there wasn't a single Walmart. In fact, they're only a handful probably five first world franchises That I'd run into consistently and almost always in Latin big cities That would be the usual suspects McDonald's Burger King, Kentucky Fried and believe it or not Sears and Ace Hardware But here's the thing about Walmart at last count. There were more than 3,500 Walmart's in Latin America and it's a new word in the Spanish vocabulary These days everyone knows it and 10 or 15 years ago. No one knew it. They say Walmart Walmart And here's something if you keep your eyes open You'll notice you walk into a Walmart you almost never see lower middle class and poor people or

[02:28] Indigenous people unless they're there as maids are cleaning ladies assisting their boss ladies head of the house selecting stuff to buy and sometimes you'll catch an Indigenous lady in a full-blown maids uniform just like you see in the old movies They even have an island Walmart with maids uniforms You can buy and I'm not talking about the sexy ones either actually to me It's pretty nauseating when an upscale Latin forces her maid or cleaning lady to wear a maids uniform. Come on Anyway, so it seems the clients at Walmart are pretty much exclusively middle class upper middle class and wealthy Latinos And they dress up too. It's a place to be seen, you know Nope, no bathrobes slippers and curlers and way back when when there were no Walmart's Where'd the middle class and upscale people shop? Well, they went to the big markets

[03:17] I'm talking about those gigantic fantastic produce markets that you see here and there and everywhere Sometimes they're outdoor markets and sometimes they're in raggedy old buildings, but they are everywhere so back then when there were no Walmart's or Costco's and you know Costco's down here too and that's Exclusively for upper middle class and wealthy Latinos since it is a membership thing and you got to pay 25 bucks a year Something to get the card right and for most Latin Americans making minimum wage three or four hundred bucks a month That's a deal-breaker and that of course means if you want to see meet or mingle with exclusively upper middle class and or wealthy Latino gringo wannabes and For those you into mating and dating we're talking about high maintenance here Get a Costco card and shop there. By the way in some Latin countries are called Costco's and other countries are called price smart

[04:04] You got to wonder what doofus pick that name. That's PRI C E S M A R T price smart First of all, the word price is an English word and so it's smart So your average Spanish speaker has no idea what that means But don't let the name fool you when you walk in all the products are Costco and it's set up exactly the same way It just has to do with a particular Latin countries corporate branding and such now personally I try to go into Walmart as little as possible though It's sometimes I'll wander in there but never to buy the produce their produce is just like up in the states Nicely packaged but never quite fresh. You want fresh? Extreme fresh you go to one of the street markets. That's what I do all the time I've been doing it since I got down here Anyway years ago before Walmart and Costco landed I go to the big markets and people shopping there were from all social classes

[04:55] All the way up to the very rich Although the upper middle class and wealthy people would generally sit in their nice cars in the parking lot and send out their maids And cleaning ladies to do the shopping because you know There's extreme class consciousness here in Latin America And if you're in the upper social status, you don't want to be seen mingling with the common folk I know I know it's totally ridiculous But that's the way it is here and believe me that part of Latin society has not changed since I've been down here For the upper classes and wealthy especially it's all about where you're seeing what you look like what you have and being as gringoized as possible So anyway these days when I go to one of those fantastic produce markets and park in one of the nearby lots I still see the occasional relatively new BMW Range Rover or upscale SUV But unlike in the past today that just means the wealthy lady sitting in the car in the parking lot

[05:45] While her maid or cleaning lady does the shopping is probably in a financial bind And that's why they're shopping there because as you'll see yourself If you come down here and keep your eyes open any produce you buy in one of the big markets Will be marked up double if you buy it at Walmart or Costco and it won't be as fresh either So bottom line at one of those big markets. It's very rare. You'll see an upper middle class or wealthy person shopping there I mean extremely rare unless of course, you're in a market that's on the gringo tourist trail Then you'll see a lot of gringos there still very rarely will you see an upscale latina there Of course, you'll never know how many maids and cleaning ladies are clandestinely doing the shopping By the way in latin america being that it's a macho society It's almost exclusively the ladies that do the shopping anyway

[06:30] So what's it all mean? Well, it just means that upper middle class and wealthy latinos prefer to shop at walmart and costco more because it's the place to go And be seen because their first world gringo franchises than it is about the freshness quality or price It seems more a psychological trade-off than anything because they do know The produce is bigger better fresher and much less expensive at those big outdoor markets But they're also scruffy disorganized chaotic in full of people they call coriente Meaning low-class people they would never personally mingle with I know I know it's kind of sad But that's life here in latin america In fact you long-time listeners just might remember me saying that one time I was talking to one of my translator ladies The ladies I use at my expat insider seminars

[07:18] Most have very good english because they went to upscale helicopter bilingual schools Meaning their parents were upper middle class or wealthy So what's that got to do with anything? Well, like I said One of the boots on the ground trips for my seminars is to go to one of those big markets and more than once I've heard one of my seminar translator ladies say you mean we're going to the central market I've never been there before and these are 20 somethings who've never once stepped foot In the big central market why well because their parents have never gone there either So then where do their parents shop two guesses walmart and costco though nowadays in almost every latin city The competition for the walmarts happen to be local or national supermarket franchises who pretty much try to copy walmart

[08:06] And some do it pretty well And there are some lower class kind of scruffy and dingy supermarket chains, too And somehow it always seems to play out That the more dingy and scruffy a supermarket chain is the cheaper the prices are compared to walmart Which is why when you walk into one of those places you'll see they're frequented almost exclusively by middle class Lower middle class and poor latinos because you see upscale latinos will never go into those places either Except if they're having a dinner party emergency again What we're talking about doesn't apply on the gringo tourist trail because they'll have local supermarkets there, too Some as mentioned quite scruffy, but since those sprinkles are not particularly class conscious We'll pop in any place if we need to buy a case of beer cheetos condoms or soy burgers

[08:53] Nope, we'll never run across town to the walmart Just because we don't want to be seen at the central market or in a scruffy or supermarket Those thoughts are not even on our radar Oh, and if you think i'm exaggerating or you doubt what i'm saying is true On your next trip to latin america just pop into a walmart or a costco and you'll see exactly what i'm talking about By the way, here's something all you health conscious listeners just have to know after visiting dozens Maybe hundreds of latin american homes from the very wealthy with bodyguards and helicopters To the very poor with tin roofs and dirt floors I've discovered that in practically every kitchen in every strata of latin society. They use and cook with Margarine margarina not butter

[09:40] mantakea That means if you're invited to eat at any latin person's house what you're eating Was cooked in or slathered with margarine and they just don't know any better even the latins who are supposedly educated Anyway, you know, there's always been that ongoing controversy about butter versus margarine and these days if you've been keeping up with the science, you know Butter real butter has its problems But it's infinitely better than margarine and butter is probably not that bad for you at all as long as it's certified organic And the cow is free range and it hasn't been injected and all that Again, the cows here in latin america and you'll see them everywhere walking all over in the boonies. They're definitely free range They're not factory farmed or pendants. You gotta love it except For the inevitable mountains

[10:26] Sometimes mountains of poop deposits on the highway. In fact many times wouldn't you know it right after i've washed my car I plowed into a putrid patch of pure poop Try saying that five times after a couple of tequila's a revolt and development to say the least But I digress. Anyway, if you're tuned into all things food and nutrition, you know Margarine's not fit for man nor beast In fact, I saw a youtube knocked so long ago where someone put a stick of butter and a stick of margarine next to each other Outside right next to the garbage canes and with time lapse photography You could see flies and insects hitting on the butter and not one insect or living creature Touched the margarine now that's as at all right turns out bacteria doesn't even like this stuff

[11:12] But man latinos sure do because like I said 99.9 percent of households use it regularly and exclusively why because it's cheap and kids learn from and get used to How their parents organize things so if a person's parents used margarine the kids will use margarine and since latino culture is not big Uninvestigating anything or doing their homework before they buy any kind of products the use of margarine has become ubiquitous throughout latin society In fact, if you go to any latin restaurant, you can be absolutely sure every recipe that calls for butter is used in margarine In fact, even if you go to a high-end restaurant and the waiter says would you like pan con ajo? That means garlic bread. Well, you can be sure it's not garlic and butter. It's garlic and margarine

[11:57] Now that's not to say you can't get real butter in medium and high-end restaurants If you ask for it, they'll usually bring you one of those little packaged little tabs But that's not what they're gonna be cooking with so just a heads up there because I for one do not Eat margarine though since I am latin american get invited to people's houses once in a while I'm sure i've inadvertently downed quite a bit of it because you know You can't very well quiz mama and say was this prepared with margarine. Well, i'll have none of that No, that wouldn't be too nice or diplomatic man You'd never want to insult your host, right? And of course that means if a latin person pops up some popcorn It'll be slathered with margarine same thing at the cinema and the fact that margarine's not good for you and probably is toxic Is absolutely not on any latin person's radar that i've ever come across and it's the same with cooking oil

[12:47] 99.9 percent of all latins cook with palm oil. Hey, why not? This is palm oil central Practically every medium and large-sized latin city has a number of palm oil processing plants It's close to the source, you know, which means palm oil is so cheap It's almost free and that's for canola oil which isn't much better You know that comes from rapeseed, right? And if you look that up, you'll find out before it's processed It's actually poisonous to humans. Great, huh? Anyway, since canola oil is not produced here in latin america It's a lot more expensive than palm oil and though you see it in places like walmart latinos aren't familiar with it So they don't buy it And of course the next best step up is olive oil and you see that in all the supermarkets too But it's not a big seller not at all

[13:34] In fact, there are lots of dusty bottles of olive oil all over the supermarket shelves in latin america And being that it's about five times more expensive than palm oil Why in the world would poor even middle-class latins with very little disposable income buy this stuff again? The scientific proof of the damage done by palm oil in the human system is just not on anyone's radar down here though Italian restaurants here in latin america. There are a lot of them have olive oil bottles on the table They have to that's a traditional italian thing, right? However, that doesn't mean they're cooking with it back in the kitchen And of course the next and best oil to use would be cold pressed organic coconut oil Oh and you can get it down here now, too In fact, I get mine at costco. Yep They carry the 100 cold pressed organic brands too and as much as I hate those big box stores like costco

[14:22] They do have a few products like coconut oil that are worth going in for So yes in the last couple years you've been able to get coconut oil here rather easily Though it's about twice the price of olive oil and about 10 times the price of palm oil Which is why it's almost exclusively used by gringos and expats who know better in fact in all the years I've been down here in latin america and in all the kitchens and houses i've been in i've yet to see any latino family Using coconut oil though. I understand 20 or 30 years ago before dirt cheap palm oil became all the rage Practically all latino families living at sea level around the coast had coconut oil in the kitchen And the people in the highlands where coconut oil wasn't available why they'd traditionally cook with lard

[15:09] You know, that's what you get after you've fried up some chicharrones Or they'd be cooking with corn oil and why not latin america is the home of the corn tortilla, right? So corn or mice is growing everywhere So before 20 or 30 years ago corn oil was big here and you still see it on the shelves But it's that nasty palm oil that's taken over the cooking market in a huge way So again, just a little heads up there and something you just might want to ask about next time you eat at a restaurant here in latin America and of course what that means is all cakes pies pastries and baked goods Are loaded with palm oil or margarine, which is why if you're concerned about that kind of thing It's better to eat at home now i've said about that

[15:54] Speaking of health and health care issues seems like every fresh green gringo I run into who's over 40 years old asks me about health insurance here in latin america And you've heard me talk about that in great detail in past shows Plus, you know at my expat insider seminars I give you the full lowdown on health insurance doctors hospitals clinics the best options for gringo is the best plans And we even go into first class first world hospital and meet the doctors and get the tour It's a real eye opener and beyond impressive now i'm bringing this up today because I got an email from a listener Cal who says he's involved in the private nursing home industry up in the states and he's had it He wants out He says most homes up in the states are in a terrible state and he wants to come down And has a plan to start his own senior care facility here in latin america

[16:44] He's thinking about the altiplano of course owing to the fact that there'll be no air conditioning or heating bills And that's a huge expense up in the states and you know is down here There are doctors nurses and aides who gladly work for around a fifth of the salary They get up in the states and the fact that the regulations to open a facility like that here in latin america Are nothing like the tangled mountain of paperwork you have to know and comply with up in the states, etc, etc So that's cal's idea right now. That's his plan He's going to come down and scout it out and one of his questions to me is And it's a good question for anyone who's starting a business and who's going to have employees down here He says once I start hiring employees i'd like to offer him a benefits package including some kind of health care insurance Oh, and he's asking me if I know of any existing companies that are offering employee plans

[17:32] He's wondering if they have similar plans like up in the states where the employer and the employee each pay a part of it Sometimes half and half or are the options more limited because that kind of stuff's new in latin america and maybe the employer Pays the whole thing or the employee pays the whole thing and what kind of benefits and coverage can you expect? All right, cal Lots of good questions there and you know It's a funny thing But if you're going to start a brick and mortar business here in latin america and you start hiring the locals As you're interviewing them you'll notice they don't ask you about benefits. Of course, they all know about government mandated benefits especially days off christmas new year's holidays holy days Sometimes even their birthday and of course, they know that in most latin countries

[18:18] You gotta pay them an extra month's wages in the middle of the year around july and pay them an extra month at the end of the year One's called alguinaldo and one's called bono catorce. That's kind of standard throughout latin america So remember you might only be paying your employees three or four hundred bucks a month But if your business is on the books and your employees are registered with the government meaning they're in the national social security and health Care system you're on the hook for two extra months pay every year So workers know their government mandated benefits, but it'd be rare for them to ask you if you have additional benefits for them So in latin america, there's a big lag time with employee benefits, too And as far as giving your employees health insurance Well, that's truly a gift because here in latin america the only companies that really do that

[19:05] Are first world franchises coming in like starbucks costco walmart ace hardware Even mcdonald's has some kind of health care coverage for their upper level employees Anyway, and that's because first world franchises have continuity a franchise in the u.s Is the same as a franchise in london or indonesia or to gusigopa honduras? And the fact that latin america is not a culture that believes in or knows anything really about insurance It took the first world franchises coming in in the last 20 years or so and the opening up of credit markets Specifically with car loans where the banker loan company demands the owner hold insurance That's what it took to introduce latin americans to the concept of insurance because you see even now

[19:52] Only about three percent of latin americans have private health insurance beyond the cheap crappy national health care system They all have access to which except for emergency and trauma care is absolutely medieval But that's what the latin population is used to and it's virtually free, but you know, nothing's for nothing, right? So anyway, the concept of latin americans even having enough disposable income to buy health or property insurance Well, good luck with that. It's just not happening except then that upper maybe five percent of latin americans Unless of course you work for a first world franchise and the company gives it to you In fact, I only know of one latin american person and he's a highly educated guy who has homeowners insurance umbrella coverage And he got into that habit because his english is perfect and he's gone to school up in the states

[20:42] So he's got first world friends in other countries and he's been exposed to the insurance game as we know it So bottom line if you own a business here and offer health care to your employees You're going above and beyond the call of duty and I applaud you for it Because the vast majority of latin-owned businesses will never offer that stuff Oh and by the way a friend of mine a german who owns an italian restaurant franchise He said if you offer your employees a health care package and they have to pay one cent more out of their own pockets Most of them won't sign on because they don't see the value in it because they've got that stinking national health care Crummy and broken as it is and you know in latin america entry-level employees that is people who are getting minimum wage here in latin america It sounds strange but almost none of them have ever been to a private hospital or clinic because you got to fork out your own dough there

[21:32] Although they all know they're cleaner nicer have better facilities and infinitely better service than the national health care system The problem is they have to pay and they don't have the extra dough Even just spending one day in the emergency room at a private hospital would break the average working class latino For example a day in the emergency room could cost 1500 bucks And remember in the states, it would be more like 10 000 bucks or more and for the average latino 1500 bucks is a quarter to a third of a year's salary So anyway, my german buddy who owns the italian restaurants He said some of the big insurance companies even the banks that own insurance companies The ones that recommend agreements and expats get on right away when they first get down They're now just starting to offer it corporate and business group plans where you can sign up all your employees

[22:22] In fact, he gave me the lowdown and a pamphlet on his group plan. Now get this It's one of those health care insurance that's run by a bank Where he has his own personal plan that costs him around 100 bucks a month And now the bank's offering it for owners and employees of small businesses just like his And he was shocked and surprised when he found out he could put each of his employees on the same plan He has for only 25 bucks a month each person now I wonder do you or do you know anybody up in the states who's got a group plan for their small business? What do you think the average is that they pay to have their employees on the plan? Well, I just looked it up and the average employee contribution 100 bucks a month and the average employer contribution 500 bucks a month

[23:07] And it works out that the average monthly payment for health care in the united states for a family When not on a group coverage or employee sponsored plan, that means individual coverage is 833 bucks a month per family. Meanwhile back here in latin america Small business employers can get first world medical coverage for their employees for 25 bucks a month And the employee kicks in nothing man. You gotta love it here in latin america, huh? Man, if that's not stretching the limits of lag time, I don't know what is Those are more like 1960s health care prices back in the states before most of you were born Which thoroughly proves the point that it's time to get the hell out of dodge get that plan be going

[23:54] All right. I know 25 bucks a month sounds crazy. You think what's the catch? There's gotta be one, right? Well for those of you non-believers out there, just send me an email and i'll prove it to you It's the expat files at gmail.com and i'll scan these pamphlets and send them to you Of course, they're all in spanish. And by the way on the pamphlet there's a picture of a young happy guy Apart for the course this young man looks just like a first world gringo. He looks so non-latin And so first world, but you know, that's the point that's the marketing strategy that many many companies use down here for example Real estate companies do it all the time when trying to sell units in a new subdivision or gated community or residential tower All their ads will show a young happy family a beautiful blonde wife

[24:42] Tall white skin dad and generally a couple of blonde blue-eyed kids something that just doesn't exist in for real here in latin America, but suddenly or not so suddenly drives the point home that if you buy into this gated gated community Whatever your neighbors will be upscale tall white and gringo like talk about classism, huh? Oh and talking to a gringo just the other day Who's been living down here around three years now came to one of my expense at our seminars and never left That happens, you know, anyway, he said something very surprising to me though It shouldn't really have surprised me at all He said, you know johnny by the way He lives slightly off the gringo tourist trail In other words, he can get to a kind of a gringoized area within an hour's drive He says johnny you won't believe it but three years after coming down here

[25:28] My cost of living has actually dropped about 30 percent. I said really how'd you do that? You're buying less or drinking less or the dog die. What happened? He said no I can speak spanish now and that he said was the secondary effect the unintended consequences I never would have thought of he said now that I can speak spanish At least well enough to talk to almost everybody and understand what they're saying No one dares try to stick me with gringo prices and no one never tries to scam me either Not that that was a big problem before I started speaking spanish But the fact is I never knew if they were scamming me though. I sort of figured he said I was paying more than I had to for certain things like rent and stuff simply because I didn't realize for example How much you can barter down here even believe it or not

[26:15] He said in a mom and pop hardware store or with an electrician or plumber or someone who's fixing your tv Took me a while. He said but I learned pretty much the only places you have to pay retail prices are at franchise outfits You know like costco starbucks gold jim bass shoes tommy hill figure those kind of places And even then it doesn't hurt to throw them a lower price See what they say oftentimes when you're just dealing with a plain salesman He'll call the boss over and you will be able to strike a deal But you won't be able to pull it off if you only speak english. All right, that's good info to know, huh? Now we're getting to the end and before we close up shop today Like to mention once again, you can still sign up for my july 2018 expat insider seminar starts in about five weeks now And you can still get in on the early bird discounts if you sign up by june 1st

[27:06] And since this show is first going out on sunday may 27th You've got just about a week to sign up and save an additional 500 bucks per person after that on june 1st The price goes back to normal Till this seminar kicks off in july So check out the details and sign up info at www.thenewexpat.com Then click on johnny's seminar link and don't forget to check out those famous john gulp side trips You've been listening to the expat files living in latin america If you need some help with your own plan b you can schedule a one-on-one phone call with me But first download my free plan b questionnaire at www.thenewexpat.com Better yet if you want to get your plan b going from right up there in the states Just sign up for my nine-hour expat essentials course get the perfect plan b blueprint by going to the expat files

[27:55] dot com slash academy most famous