The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s president yesterday told Tribune Business his three former City Markets stores could generate a collective $90 million in sales within three years if the economy grows, with the Cable Beach location set to re-open today.

Rupert Roberts said that site, together with the former City Markets stores at South Beach and the Seagrapes Shopping Centre, could each produce a $30 million annual top-line “if the volumes are there”, with the outlets set to trade under his Quality Supermarkets brand.

Disclosing to Tribune Business that it would likely require a total $6 million investment, at a minimum, to re-open all three stores, Mr Roberts said that together with his 10 Super Value supermarkets they would give him “close to” a 40 per cent share of the Bahamian food retail market.

Dismissing as “no concern” fears expressed by some observers that the Quality Supermarkets outlets would take away business from his existing stores, Mr Roberts confirmed that the re-opened Cable Beach store would create 70 jobs.

“We’re re-opening Cable Beach tomorrow morning, Friday, at 7am,” Mr Roberts told Tribune Business. “We’re finished with the set-up, but have been dealing all morning with the red tape of submitting the papers for the Business Licence, which we have now got.

“To avoid any legal issues and separate from the past we’re calling it Quality Supermarkets. Customers have been expressing that they’re very anxious for us to get that re-opened, and the 70 employees are very anxious, grateful and thankful to have permanent jobs.”

Explaining that not all the Quality Supermarkets staff would be former City Markets employees, who had been spread through his existing Super Value business, Mr Roberts indicated that his new chain would largely offer the same product lines - and carry the same prices - as Super Value.

Indicating that the increased sales volumes would translate into economies of scale, and improved buying terms/discounts with suppliers, Mr Roberts said the re-opened Cable Beach store would carry what consumers in the area were “accustomed to” - English speciality frozen foods and other high-end product lines.

“There shouldn’t be any out-of-stocks this time as we’ve completed the orders,” Mr Roberts told Tribune Business, explaining that he was aiming to “distribute” the economies of scale benefits through all the stores - Super Value and Quality - carrying the same prices and specials.

Looking ahead to the South Beach and Seagrapes (Prince Charles Drive) re-fits, Mr Roberts added: “The South Beach store should follow [open] in about three months. We’ve placed the equipment order for there, and we’re starting to engineer the Seagrapes store. That order will be placed imminently.

“The second store [South Beach] will follow in three months, and Seagrapes another month after that.” This indicates that all three Quality Supermarkets stores should be open by November 2012.

Mr Roberts estimated that building and equipment upgrades at each of the three stores would cost $1 million, with inventory to re-stock them also requiring an outlay of the same magnitude. This will take his outlay on Quality Supermarkets’ start-up to a total $6 million.

“The lower we keep the investment, the lower we keep the prices for customers,” he added. “There’s loads of these odds and ends. We had to do some paint-ups at Cable Beach, stripe the parking lot and put in kerbstones.

“Whatever it takes, we’ll do. We’re budgeting tight to keep the prices down... We don’t want to incur any additional expenses, and will keep the office cutter in place to keep expenses down.”

Asked about his financial expectations for Quality Supermarkets’ Cable Beach outlet, Mr Roberts told Tribune Business: “That store is designed to comfortably do $30 million [sales] a year if the volumes are there.

“The store can handle up to $30 million if the business is there. It’s going to be there. It depends on the economy, but certainly within three years.”

Mr Roberts cited the $2.6 billion Baha Mar redevelopment of Cable Beach as reason for his optimism, together with the likelihood of an improving US and world economy.

When it came to the other two potential Quality Supermarkets sites, Mr Roberts said his top-line expectations were “sort of the same”.

“Except that South Beach is a new trade area for us,” he added quickly. “We’ve never enjoyed the business out of that area. City Markets had it for 20 years, and that should add to our figures.

“The stores are going to be designed to do $30 million each; $90 million in total if the economy improves.

“That’s not just going to happen. We have to go out and get it. You have to serve, offer the people the right service, the right prices for that to happen.”

Responding to concerns that the three Quality Supermarkets stores would take away business from Super Value, particularly the latter’s Cable Beach and Winton sites, especially given that it had been the main beneficiary of City Markets’ demise, Mr Roberts said: “Eventually, it will equalise.”

Pointing out that 60 per cent of all food retail shopping was based on location and convenience, he said that some shoppers would be “relieved”, as the Quality Supermarkets stores would reduce pressure at Super Value during peak shopping times.

“That’s not a concern,” Mr Roberts told Tribune Business. “We made the decision. Once we made the decision it could work, we knew it was going to equalise between the stores.”

Pointing out that he would employ more than 800 persons between the two supermarket chains, Mr Roberts said the addition of Quality and the three former City Markets stores would still fail to give him a majority share of the Bahamian food retail market.

“I think the market is misunderstood,” he told Tribune Business. “I think it will probably push us up close to 40 per cent.”

Mr Roberts said he had “really moved” to get the former City Markets stores re-opened, adding that any delays had been caused by legal work to consummate the deal with the Finlayson family-owned Trans-Island Traders, and subsequent issues such as searches.

“It wasn’t the physical side that held us up, as we could have opened Cable Beach in a month. The moment we signed we had an order placed,” Mr Roberts said. “If we could, we would have started putting groceries in there the following Saturday.”