The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s president yesterday revealed he is bracing for a “below normal” sales decline as the post-COVID lockdown reality bites, and said: “If we fall ten percent below last year we’ll be in trouble.”

Rupert Roberts told Tribune Business that the supermarket chain is preparing for “a tapering off” in groceries demand that could happen as early as this week as high unemployment and reduced incomes as a result of the economic lockdown shrink consumer spending.

“There hasn’t been any major tapering off yet,” he said, “but we know that as the hotels open the staff will be eating in the hotels, and as the restaurants people will be eating out instead of at home. We expect a drop-off. First, it’ll go back to normal and then go below normal.

“The lack of money, we expect to encounter that in weeks to come. It may be sudden rather than a gradual drop-off. The sudden may start this week. I don’t know. There’s going to be a shortage of money to shop, and people will want to be in by dark. It hasn’t happened yet, but we all now it’s going to happen. It may have started this week, and we really don’t know. I haven’t looked.

“If we start falling ten percent below last year we’ll be in trouble. Our expectation is that it will not go below ten percent below last year before we catch ourselves, tourism kicks back in and the economy catches itself. It’s wait, watch and see.”

Mr Roberts said himself and other companies were “sad” that tourism’s re-opening had been delayed, adding: “We were hoping it would start kicking in by June 15. Now it’s going to July 1, and the worldwide increase in COVID-19 cases is not so encouraging. That’s bound to have an effect on us as well.”

The rapid increase in positive COVID-19 cases across multiple states in The Bahamas’ major source market, the US, and particularly the likes of Florida, is likely to further complicate the planned re-opening of a tourism sector upon which this nation relies to generate the bulk of its economic output, jobs and foreign exchange earnings.

Mr Roberts’ expectations of a food sales drop-off have also been echoed by one of Super Value’s major competitors, BISX-listed AML Foods, which revealed that it, too, is expecting top-line volumes to start declining by the end of its 2021 first quarter.

That period ends on July 31, meaning that the fall-off is likely to be occurring now. The Solomon’s and Cost Right owner, unveiling its full-year and fourth quarter results for the period to end-April 2020, also exposed the boost that COVID-19 panic buying and stocking up gave to its top-line and those of other food stores as those figures also contained the pandemic’s first six weeks.

AML Foods saw its fourth quarter sales increase by more than $5.7m or 13.3 percent year-over-year, jumping from $43.66m in the same period in 2019 to $49.382m during the three months to end-April 2020.

Franklyn Butler, AML Foods’ chairman, told shareholders: “The COVID-19 pandemic has had a positive impact on sales for the quarter. However, the expectation is that with increased unemployment and the prolonged closure of the tourism industry, sales volumes will begin to decline by the end of the 2021 first quarter.

“Increased sales during the quarter were single-handedly from our food distribution segment... Consumer purchasing behaviours shifted during the quarter, and sales of higher margin departments such as deli and clothing were down, negatively impacting our gross margin dollars. During the quarter, our gross margin percentage dropped to 30.3 percent from 31.8 percent.”

Mr Roberts yesterday said Super Value’s early pandemic sales were ahead of the prior year by a similar margin to AML Foods, citing a 10-15 percent increase as food stores were one of the few sectors to enjoy an initial lockdown boost. Yet he agreed that COVID-19’s economic fall-out, with mass joblessness, income cuts and depressed consumer confidence amid the ongoing uncertainty, were all likely to take a toll for the foreseeable future.

“I think it’s very tight,” he told Tribune Business. “I think other businesses are suffering. People have to eat and put money into groceries still; they cannot afford anything else.” The Super Value chief said his business was already adjusting ordering to meet the anticipated drop-off in demand, having purchased three-quarters of the amount of turkey and ham that it sold in 2019.

And he also expressed reservations about extending Super Value’s opening hours from 7pm to 8pm, even though the Prime Minister’s decision to move the curfew start back to 10pm has provided this extra time for business.

“Because we’ve now been open for two Sundays, the lines have disappeared except for one store,” Mr Roberts added.”We’ve lost 12 hours of opening per week, and that still gave us lines at Golden Gates. I haven’t decided what we’re going to do because you have to contend with darkness.

“I think with the curfew that people do not want to be out in the dark from 8pm to 10pm. We have to decide if we will shut at 7pm and let people get home before dark. We could consider staying open to 8pm, but you don’t have a chance to get home before dark.”

The Super Value chief said the supermarket chain has also been preoccupied with replacing products that were out of stock, having just received a shipment of Hellman’s mayonnaise after a long period without. “There’s a lot of brands that have disappeared that we to get substitutes in for,” he added, explaining that private labels had to be sourced instead of “name brands” as suppliers focused on their domestic markets.

“When this first started I discussed with the [then] minister of health [Dr Duane Sands] putting in three months’ inventory,” Mr Roberts told Tribune Business. “We’ve never been able to build inventory that high, but we got to a plateau and will maintain that level.

“It looks like we will have this pandemic and be fighting it for the rest of the year. It’s anybody’s guess what we do. I’m going to maintain inventory at the levels we have now and not increase it any more. We have to turn it fast.

“We’ve managed the inventory quite well. We’ve managed better than in the US. I saw pictures of US shelves scantily stocked, but we’ve been able to stock like it’s a grand opening throughout the pandemic. The stores in the US have their problems. They have the US market, we have the world market. When one market closes, we rotate to another. We managed better than the US.”