The Tribune

By NEIL HARTNELL Tribune Business Editor AML Foods yesterday said fears of a top-line hit from consumers taking ever-longer to recover from Christmas had failed to materialise, with its same-store sales for 2012 to-date up 10 per cent on prior year comparatives. Gavin Watchorn, the BISX-listed food retail group's president and chief executive, told Tribune Business that the growth had come from Bahamian shoppers spending more per transaction with it, rather than an increase in customer visits. Pointing out that including its newly-opened Solomon's Fresh Market outlet took AML Foods' early 2012 sales some 30 per cent ahead of their prior year comparatives, Mr Watchorn said the "easing" of roadworks near its Solomon's SuperCentre and Cost Right stores in Nassau had provided a further top-line boost via improved customer access. "Since Christmas, we're tracking same-store sales up about 10-12 per cent, and company wide - with Solomon's Fresh Market - we're up 30 per cent," Mr Watchorn told Tribune Business. Same store sales strip out new retail selling space, such as Solomon's Fresh Market, making it easier to compare year-over-year performance. In recent years, Bahamian retailers across most formats have told this newspaper it is taking ever-longer for consumers to recover from the excesses of Christmas holiday shopping. Several have said the 'recovery period', as reflected in the level of spending and purchases, is taking a month longer every year. But not in AML Foods' case in 2012. "We haven't seen the lag we were expecting," Mr Watchorn confirmed. "Obviously, our expectations did not come true and we're thankful for that. We thought it would take that bit longer, the recovery period extended out, for people to begin repurchasing." The AML Foods president said that Bahamian retailers had traditionally relied on Christmas sales to "get through January", with consumer consumption "picking up" again the following month. "The last two years that pick up has extended out a bit, and we were focusing on government pay day for February. This year we expected a February into March pick-up, but that has certainly not happened," Mr Watchorn told Tribune Business. Acknowledging that "some departments are up, some departments are down", he added that consumer spending was being driven by "what is necessity and what is luxury". However, AML Foods had seen no top-line impact in its larger products category, appliances and electronics. "In our hard goods we haven't really seen any lag in the rebound," Mr Watchorn said. Those product lines/departments that the BISX-listed food group had forecast to be "flat to slightly down" were instead "flat to slightly up" for the first two-and-a-half months of 2012, and the AML Foods chief executive attributed the group's performance to its "value" proposition. Referring to the demise of Robin Hood, and City Markets' continuing struggles, Mr Watchorn said: "On the food side the market is not as competitive as it was, but we're finding sales increases are coming from people spending more money with us, rather than, say, 10 per cent more transactions. "We feel our value is resonating with customers who, rather than shopping around, would rather spend their money with us as opposed to picking and choosing. "We've focused on product value and quality over the last six-nine months, whereas our competitors have been offering specials at weekends, and not carrying the message through their full product line. We've focused on that, and we're reaping the benefits of that now." AML Foods, said Mr Watchorn, had been further aided by the reduced roadworks activity associated with the New Providence Road Improvement Project. Both its "flagship" Solomon's SuperCentre store in the Marathon area, and Cost Right at the Town Centre Mall, had been impacted by the more than two-year project. "As soon as the roadworks started to ease off, we've seen a bump in sales as customers came back to us. It's easier to get to us," Mr Watchorn said. "We have a long-term strategy, and value and quality - over that long-term - are going to win-out over flashy sales, and offering cheap product at a cheap price." Elsewhere, Mr Watchorn confirmed to Tribune Business that AML Foods expected to close a lease for the former City Markets store site at Lucaya, in Freeport, "within the next 10 days". It is looking to convert the site into a "sister store" to its existing Solomon's outlet in Freeport. And Tribune Business can also reveal that AML Foods was the 'local group' approached by City Markets over the latter's bid to sell a majority controlling equity interest to a joint venture partner with the Finlayson family. It is unclear whether talks focused on the whole City Markets operation or just specific store sites, as AML Foods is understood to be especially interested in the 'flagship' locations, namely Harbour Bay and Cable Beach. Sources familiar with developments, though, said it was a short courtship, if at all. Tribune Business understands that the two parties were so apart on valuation that negotiations between AML Foods and City Markets never got past first base. Mr Watchorn declined to comment, while Mark Finlayson, City Markets' principal, did not respond to a phone message seeking his input.