Home Depot thought it was going to nail the market shut in the U.S. Virgin Islands when it opened its first store there in 2003. But according to our correspondents on the island, Home Depot has been plagued by supply problems, and bound up in red tape. The Daily News on the Virgin Islands reports that one month after their December 11, 2003 opening, the 97,000 square foot Home Depot is planning to cut back on the hours of all of its employees because of U.S. Customs snafus. “It’s our fault,” said a Home Depot spokesman. “We did not have the paperwork in order.” The company complained that because U.S. Customs was holding up the flow of goods onto the islands, “if you don’t have the product, you have to cut hours.” Because some Home Depot shelves were empty, the store is cutting back on its labor costs. In-coming Home Depot shipments did not properly indicate the country of origin for all products, and the shipments were held up. The 138 workers at Home Depot will work 4 days a week instead of 5 days, and the cutback could last two weeks, or longer. Home Depot also indicated that its computer ordering system has caused delays, because it is incompatible with other stores. The Daily News noted that Home Depot “has struggled to keep its shelves stocked. Virgin Islanders have been left waiting for merchandise.”
This Home Depot was bitterly opposed by local groups on the Virgin Islands. The location, along a crowded roadway, was seen as out of scale and character with the rest of small businesses on the islands. When I was asked to speak about the proposal on the islands, it was clear to me that the government had done what it could to support the store at the expense of its local merchants. Impact on existing merchants is expected to be more severe than most locations, because on an island, the market area is restricted by its ocean-locked population. The trade area’s population can only support a certain sales level for home improvement products, and Home Depot sales are likely to be drawn predominately from existing retailers. For more background on this story, search this database by “Virgin Islands.”
