Things are getting tighter

Sep 01, 2017 Features / Columnists, Peeping Tom

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The expansion of the fast food industry has long been felt to be associated with a growing economy. It is a misplaced idea, because what has been responsible for the growth of fast food industries in many countries has been economic liberalization, rather than growth.
It was no coincidence that the fast food industry took hold during the period of economic liberalization. As a result, the expansion of the fast food industry in Guyana became associated, at least in the minds of some analysts, with higher disposable incomes and increased economic growth rates.
In Guyana, fast food franchises are being established at a rate of knots. A number of new franchises, including Mexican, have set up shop in Guyana. KFC is the craze once again in Guyana. Pizza Hut is back. All of this would make one believe that Guyanese are enjoying higher levels of disposable income.
Guyanese should not be fooled. What we are having now is greater competition within a limited market. For every new franchise that has been established, one has gone down the drain. The original franchise owners for KFC and Pizza Hut, for example, had to close their businesses. New owners have taken over the franchise. Some food franchises have gone out of commission because of poor sales.
A fast food business, operating on council parapets, is doing brisk business every single day but across the road, there are no lines at an established fast food business. There is a façade that higher disposable incomes are leading to the growth of the fast food industry, but I reiterate, this is not so.
What is happening is that there is competition in the sector, some of it unfair and this is hurting some franchises and benefitting some.
Fast food businesses are also facing competition from the cinemas. Years ago, during the hard economic guava season, some workers used to treat themselves to a visit to Demico House on pay day. It was the only treat they could have for the entire month. Not many fast food franchises were around then. With economic liberalization, things got better and persons could treat themselves and their family to weekends at fast food joints.
Now the fast food joints are losing business to the cinemas. It costs a fair bit to go to the cinema, so there has been some trade-off between the fast food treat and cinema-going. This is why even though it may see as if the fast food joints are doing well, in terms of aggregate sales, it is most likely that sales are down because of the competition from cinemas.
Fast food business is big business and it is run by big business. The opening of new franchises is not an indicator of higher disposable incomes for either the rich or the poor.
Poor people with plenty children cannot afford to go to the cinema. It costs too much. And they surely cannot afford to treat their families at the fast food outlets. So, there is a gap between the rich and the poor. The poor are hurting in Guyana.
If you want to understand how the poor are managing, you have to keep your eyes focused on what is taking place in many communities, including coastal villages. In many of these areas, outside of the traditional commercial districts, roadside vending is reemerging.
All around the villages and even urban communities, persons are coming out with their little trays, selling all kinds of things which are already being sold by others. People are selling cakes and food by the roadside. The road corners are seeing an increase in persons vending water and aerated drinks out of plastic containers. Bottom house shops are being established, but are selling the same things as others. Dog food stands are doing good business. Pit bulls cannot be fed scrapings. They have to be well fed and therefore the dog food business is one of the fastest growing businesses in Guyana.
What all of this suggests is that the poor are feeling the pinch. They are on a hustle. They are trying to earn a dollar. The small stands are emerging. More vending is taking place. And this is a sure sign that there are problems in terms of the poor.
The rich can take care of themselves, but the rich are needed to invest in order to create jobs for the poor. But the rich are being penalized by ill-advised policies and, in some cases, high-handed action.
Do not therefore be fooled by the crowds that are flocking KFC. It is a novelty and it is typical for Guyanese to get excited when a new business opens. Take a look at the other fast food places and you will see an appreciable reduction in patrons.
Do not be fooled also by the crowds at Giftland on weekends. Poor families cannot afford to take their families to see a movie there.
Things are getting tighter for the poor people. Expect more roadside stands in the months ahead.

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