Yesterday, I wrote about why I believe the next great consumer boom won’t be limited to the United States.
Today, I want to introduce you to a company that’s become part of my everyday life here in Nicaragua.
Every time I drive into Managua (a little less than 2 hours from the beach), there’s one stop I almost always make.
PriceSmart.
As a member, I’ve shopped there for years. And every visit leaves me with the same impression.
It’s packed.
The parking lot is full. Shopping carts are overflowing. Families are buying everything from fresh produce and electronics to patio furniture, televisions, and bulk groceries. Checkout lines stretch toward the back of the warehouse, yet members continue pouring through the doors.
As an investor, I love seeing businesses in the real world.
Financial statements are important. Earnings reports matter. But there’s something powerful about walking through a store, observing customer behavior, and asking a simple question:
“Would I want to own this business?”
Every time I visit PriceSmart, my answer is yes.
This is the epitome of “boots on the ground” research.
Most American investors have never heard of the company.
Yet the business model is immediately familiar.
Think Costco - but built for Latin America and the Caribbean.
PriceSmart (PSMT) operates membership warehouse clubs across 13 countries, including Costa Rica, Panama, Guatemala, Honduras, El Salvador, Nicaragua, Jamaica, Trinidad, Barbados, Colombia, the Dominican Republic, Aruba, and the U.S. Virgin Islands.
Instead of chasing razor-thin retail margins, the company generates recurring membership revenue while encouraging customers to purchase in bulk. It’s a model that’s worked incredibly well for Costco over the past several decades.
The difference is where PriceSmart operates.
Latin America has quietly become one of the world’s most attractive long-term consumer stories.
Over the past two decades, millions of households have entered the middle class. Formal employment has increased. Credit availability has expanded. Consumers have more disposable income than previous generations, and they’re increasingly looking for convenience, quality, and value.
That shift plays directly into PriceSmart’s strengths.
For many families, shopping there isn’t just about buying groceries.
It’s about buying better products at better prices while saving time.
The warehouse club model creates loyalty because once consumers become members, they tend to return again and again.
I’ve seen it firsthand.
It’s common to watch shoppers leave with carts loaded high enough that you’d think they were stocking up for months. Families often travel significant distances because PriceSmart offers products that simply aren’t available elsewhere or are offered at significantly better values.
That’s exactly the type of customer behavior long-term investors should pay attention to.
What’s especially interesting is that PriceSmart still has plenty of room to grow.
Unlike Costco (COST), which already operates hundreds of warehouses across North America, PriceSmart has only a few dozen clubs spread throughout Latin America and the Caribbean. Many of the markets it serves remain underpenetrated, and management continues expanding carefully into regions where rising incomes support long-term membership growth.
That combination - a proven business model plus a long runway for expansion - is something I always look for.
And PriceSmart isn’t just benefiting from population growth.
It’s benefiting from something even more powerful: rising purchasing power.
As incomes increase, consumers don’t simply spend more money. They often upgrade where they shop. They become more brand conscious. They seek higher-quality products. They value convenience. They buy larger quantities to stretch their budgets.
Those trends can continue for years.
This is why I encourage investors to think beyond U.S. borders.
Some of tomorrow’s best-performing consumer companies won’t necessarily be headquartered in New York or Chicago.
They may be serving families in Managua.
Or San José.
Or Panama City.
Or Medellín.
One of the biggest mistakes investors make is assuming great consumer companies have to be American. They don’t. Great businesses simply find ways to earn customers’ trust, encourage them to come back again and again, and steadily grow alongside the economies they serve. That’s exactly what I believe PriceSmart is doing across Latin America.
Tomorrow, we’ll cross the Atlantic to examine another fascinating corner of the global consumer story. While PriceSmart helps families stretch every dollar, Europe’s luxury giants prove that the world’s wealthiest consumers continue to spend - almost regardless of the economic backdrop.
We’ll look at why companies like LVMH, Hermès, Ferrari, and Richemont have built some of the world’s most valuable brands and why their long-term growth story may be far from over.
Whether it’s a warehouse club in Managua or a boutique on the Champs-Élysées, the investing lesson is remarkably similar: great consumer businesses aren’t built around products - they’re built around people. And investing alongside changing consumer behavior has been one of the most reliable ways to build wealth for generations.
Here’s to the future,
Matt McCall
Editor, Market Insights
