The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AML Foods believes its newly-opened Solomon’s Lucaya store will give it a collective 40-50 per cent share of Grand Bahama’s food retail market, with that outlet’s sales already “quite a bit ahead” of expectations.

Gavin Watchorn, the BISX-listed food retail and franchise group’s chief executive, told Tribune Business that Solomon’s Lucaya had come in “on time and on budget”, some $3.9 million having been invested in its opening.

Mr Watchorn, who is also AML Foods’ president, said Solomon’s Lucaya’s opening had created 62 full-time staff posts, and another 20-25 temporary jobs during its fit-out.

And, turning briefly to the group’s Nassau-based businesses, Mr Watchorn said it had “no concerns” that its rival, Super Value president Rupert Roberts, would be able to snatch the lease for the former City Markets’ Harbour Bay store out from under its Solomon’s Fresh Market concept.

“The opening itself went very well and was issue free, with no problems,” Mr Watchorn told Tribune Business. “Everybody worked very hard, and I was very pleased with the team, who delivered another project on time and on budget.”

Acknowledging that the initial budget for Solomon’s Lucaya was $3.5 million, a sum that covered all pre-opening costs and the initial inventory, AML Foods “very early on decided to invest $400,000 in energy initiatives because that pays for itself very quickly”.

This took AML Foods’ total investment to $3.9 million, and Mr Watchorn said Solomon’s Lucaya had drawn “a great response” from consumers in the surrounding area, with between 100-150 persons lined up outside its doors on opening day.

“It will cannibalise a little from our existing business, and we anticipate that, but in the early days our overall share of the market in Freeport is up quite a bit,” Mr Watchorn told Tribune Business.

“Compared to the same period last week, and the last couple of weeks, our business has gone up in the Freeport market.

“I think we probably have 40 per cent, maybe 50 per cent, of the market. Once we’re fully up and running we’ll be 40-50 per cent of the market.”

Apart from Solomon’s Lucaya, AML Foods also has a Solomon’s SuperCentre and Cost Right stores in the Bahamas’ second city. It also does not have to contend with a presence from Mr Roberts, like it does in Nassau, while competitive pressures have also bean eased by the recent closure of rival Savemore.

To open its Lucaya store, AML Foods took over the lease for the 31,000 square foot site previously held by City Markets, negotiating the terms with landlords, the late Sir Milo Butler’s family.

The BISX-listed group’s aim is for the Lucaya store to act as a ‘sister location’ to Queen’s Highway-based Solomon’s SuperCentre, and fill a niche created by the absence of rival food retailers in that area of Freeport. Effectively, its existence gives AML Foods complete coverage of Freeport.

Mr Watchorn had previously told Tribune Business AML Foods expected Solomon’s Lucaya to generate between $12-$15 million in per annum sales within three years of opening, and he sees no reason to change that forecast.

“I think we’ll get up to that number pretty quickly,” he told Tribune Business.

“We felt that investing in that store there would be a good move for the company. Yes, it gives us a strong position in Freeport, but it also fitted in to our strategy of growth in areas we don’t have a presence in, and opens up synergies on the purchasing side and operational expenses side.”

Mr Watchorn explained that common, group-wide costs in Freeport, such as marketing and insurance, could now be spread across three stores, instead of two.

“We’re now reaching that level we’ve been seeking for some time, where the increase in sales vastly outpaces the increase in central costs that go along with it,” he added.

“Marketing, insurance dollars per sale decrease, and that drops to the bottom line and drives up earnings for shareholders.”

Asked about Solomon’s Lucaya’s performance for the first week, the AML Foods chief told Tribune Business: “They [sales] are ahead of expectations - quite a bit above what we expected - but three days doesn’t make a trend.

“We’ve been open three days, and have to be realistic in not jumping to too many conclusions yet.”

Mr Watchorn expressed optimism that AML Foods’ latest project success would translate into its upcoming New Providence ventures, namely the start of its Carl’s Jr burger franchise and the $5-$6 million Harbour Bay re-fit for its second Solomon’s Fresh Market outlet.

He was adamant, though, that Mr Roberts stood no chance in snatching the Harbour Bay lease out from under AML Foods’ nose, in a bid to put his Quality Supermarkets chain in there.

Mr Roberts told Tribune Business on Friday that he had “not given up” hopes of getting the Harbour Bay lease, having initially been set to acquire that interest as part of the deal with City Markets’ majority shareholder, the Finlayson family, to takeover the latter’s former sites.

Tribune Business understands that the Mosko family, Harbour Bay’s landlords, effectively terminated the lease held by City Markets due to non-payment of rent for three months - a move that prevented the Finlaysons from selling its leasehold interest to Mr Roberts.

It also opened the way for AML Foods to enter into what was effectively a bidding war with Mr Roberts for the lease, with the Moskos ultimately deciding in favour of the BISX-listed group’s destination concept, Solomon’s Fresh Market.

This has not gone down well with the Finlayson family. Mark Finlayson has been threatening to sue the Moskos over the lease termination, but the landlords are sticking to their position that their action is more than justified.

In response to Mr Roberts’ comments, Mr Watchorn would only say on AML Foods’ behalf: “We have absolutely no concerns about Mr Roberts getting Harbour Bay.”