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EPA Consolidates Its Business Model Without Fear of Competition

EPA, the home hardware retail chain of Venezuelan origin, arrived in Costa RIca in 2004

It was 2004 when EPA arrived in Costa Rica, introducing the “self serve” concept never seen before in the country’s home hardware market.

The EPA concept has been innovative in Costa Rica, there was no other retail concept like theirs, in which, shoppers could fill the same care with hardware, construction material, home decorating or remodeling, gardening and more. A store where the consumer could pick up the merchandise, examine it and, place it in their cart and check out in supermarket fashion at the end.

No other hardware store offered that at the time. It had always been and in some places still is, ask for what you need from the person behind the counter.

Service, value pricing and assortment is the business model of EPA

“The self-service made a complete change in the supply within the national market. It also changed the concept of who visits the store: at that time no entire families went to the hardware store, a woman was not a regular customer,” said Jeannette Montero, EPA general manager.

“We were leaders and many people improved (their lives) thanks to that. We started introducing many things like the bar code,” said Montero, in reference to the way things were done while at “counter” hardware stores a clerk brings you the product, invoices it, you pay the cashier, then pick up your purchase at the “dispatch” counter.

In many cases, that model has gone unchanged today in a typical hardware store. A visit to a small hardware store and it’s like a step back in time. At some larger hardware stores, customers are able to stroll the aisles, but in the end, a clerk has to still invoice, you then pay the cashier, and pick up the purchase at another counter, even if it is for a candy bar.

Others copying the EPA model does not worry the company, despite the number of competitors is increasing. From 2011 to 2016, the number of hardware and construction materials retailers has grown from 1,877 to 2,434, according to date from the Directorate General of Taxation.

The Home Depot style of retail chain of Venezuelan origin considers their brand of service a major element of their business model, combined with competitive pricing and a wide assortment of merchandise.

EPA has many advantages. For example, there are the extended hours and ample parking. My local hardware store in Piedades de Santa Ana still closes for lunch. Between 12 noon and 1:00 pm, the store closes, staff (mostly family) go home for lunch. At 5:00 pm they are done, Saturdays at noon. Sunday, closed.

“Our consultants make a big difference. But above all is our value pricing, assortment, and service. That is what we started with, what served us well and what we will use to continue to grow in Costa Rica,” said Montero.

EPA has four stores, employing 950 people, in Curridabat, Escazú, Belén, and Tibás that it considers covers well the GAM. Although there are no plans to open more stores, it is not entirely ruled out.