By LETRE SWEETING
lsweeting@tribunemedia.net
FUSION Superplex’s chief executive officer said the timing of the minimum wage increase is “of great concern,” adding he hopes the government can offer businesses tax incentives to assist with the impact of this latest financial blow.
This comes after Carlos Foulkes said last month that he anticipates an increase in the facility’s power bill of about $466,000 in 2023, assuming the business’ consumption patterns from this year remain the same due to Bahamas Power and Light’s bill hike.
Mr Foulkes said at the time that the triple blow of higher electricity prices, increased food costs and the rise in employment wages has been known to “close down businesses”.
“Under normal conditions an increase in minimum wage would be manageable alone,” Mr Foulkes said in a statement sent to this newspaper this week. “Unfortunately while having to deal with the BPL fuel surcharge increase at the same time, as well as the rising cost of goods, the timing is of great concern.”
He said that although Fusion supports this minimum wage increase, he hopes the Davis administration will offer some relief to businesses.
“Fusion Superplex supports the minimum wage increase. We have noticed a sharp increase in the price of everyday supplies for our restaurants. This obviously means the entire Bahamian people are suffering from an increase in prices at the local food stores. Meanwhile inflation reduces the spending power of the dollar.
“Yes, we have to make an adjustment to meet the new minimum wage (requirement). And, yes, it will cost us significantly. But we hope the government will offer businesses some tax incentives to help reduce the shock,” Mr Foulkes said.
He added that as prices go up business will continue to drop.
“Fusion’s revenue is directionally proportional to the attendance. But our margins are inversely proportional to cost. So as prices go up people spend less. So what we have here are three major cost factors increasing, first, the cost of goods sold (supplies), second, utility (power) and third, labour,” Mr Foulkes said.
“Each one of these factors alone has been known to bankrupt businesses.”
However, Mr Foulkes said that as attendance rises, he expects that 2023 should be a profitable year for Fusion Superplex.
“By the end of the year, we should be back to pre-pandemic levels in all the outlets with the support of the public. But financial performance is not just revenue, it is best described by operational margins,” he said.
“The way Fusion has survived this period of higher cost and lower revenue is by a comprehensive restructure of its operating methodologies: more efficient ways of production, better maintenance programmes and, yes, some reduced staffing where needed.
“My brilliant management team and my hard-working employees have kept us open for the Bahamian public. Because Bahamians love our products and services, we notice our restaurants and other revenue outlets are on a strong rebound.”
Earlier this month, Mr Davis announced that for BPL customers who consume less than 800 kWh (kilowatt hours), the fuel charge is increasing by two cents per kWh, “which will result in an increase this quarter of less than $20 per month.”
For those who consume more than 800 kWh, the increase will be 4.3 cents per kWh.
Several days later Mr Davis announced an increase in the country’s minimum wage from $210 to $260 per week. The higher wage will be retroactive in the public service going back to July of this year and for those in the private sector, the change will begin in January 2023.
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