Executive Briefings

Is Ice-Cream Parlor Business a Snapshot of Mexico's Small-Is-Better Approach to Retail?

In almost every town in Mexico, you will find at least one garish La Michoacana ice-cream parlour, a Mexican business success story, possibly as well known as Dunkin' Donuts is in the United States. But it is not a corporation, nor a brand, nor a franchise. It is a confetti of independent, family-owned ice-cream parlours.

Is Ice-Cream Parlor Business a Snapshot of Mexico's Small-Is-Better Approach to Retail?

La Michoacana stores are the epitome of Mexican small businesses: not only independent and family-owned, but also tatty, with a few people behind the counter, working on and off the books.

They also epitomise Mexico’s stubborn attachment to smallness in business. The OECD says Mexico has more businesses with ten workers or fewer, as a share of the total, than any other big economy in Latin America. Manuel Molano of the Mexican Competitiveness Institute, a think-tank, calls this a “Peter Pan system” in which firms prefer to stay small than to grow, mostly because of tax and regulation. “It’s easier to fly under the radar when you are microscopic,” he says.

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La Michoacana stores are the epitome of Mexican small businesses: not only independent and family-owned, but also tatty, with a few people behind the counter, working on and off the books.

They also epitomise Mexico’s stubborn attachment to smallness in business. The OECD says Mexico has more businesses with ten workers or fewer, as a share of the total, than any other big economy in Latin America. Manuel Molano of the Mexican Competitiveness Institute, a think-tank, calls this a “Peter Pan system” in which firms prefer to stay small than to grow, mostly because of tax and regulation. “It’s easier to fly under the radar when you are microscopic,” he says.

Read Full Article

Is Ice-Cream Parlor Business a Snapshot of Mexico's Small-Is-Better Approach to Retail?