The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AML Foods has signalled it paid $1.1m to acquire the future site of its Solomon’s Carmichael store and associated shopping centre as it revealed that “smaller footprint locations” will be its future format.

The BISX-listed food retail and franchise group, in its just-released 2023 annual report, did not explicitly tie the land acquisition details in its audited financial statements to the recently-announced 4.23-acre purchase but it is difficult to imagine what else it could be referring to.

“In April 2023, the company purchased a parcel of land located on Faith Avenue, Nassau, Bahamas for $1.1m,” the audited financials declared. AML Foods did not disclose the land acquisition costs, or the likely total investment that will be made in constructing the shopping centre and new store, when it late last week unveiled the purchase of real estate located between Faith Avenue and Sir Milo Butler Highway.

Meanwhile, the group confirmed it is shifting away from the larger ‘big box’ retail formats it was initially known for, with Solomon’s SuperCentre and Cost Right, towards its smaller neighbourhood-type store strategy given that such outlets better enable it to control costs.

“The success of our Exuma Markets location has solidified that running smaller footprint locations, with less overhead, will be the future of our organisation’s food distribution division,” AML Foods said.

“Not 12 months after the opening of our Solomon’s Downtown Freeport location under the new footprint, we have already secured the site for our highly anticipated entrance into the south-western area of New Providence. Our opening date is not yet confirmed but we remain committed to serving customers in the area.

“Additionally, in May 2023, we closed on the sale to acquire the building that currently houses our Solomon’s SuperCentre store. Plans for construction are in progress and the building will be the future home for our existing Cost Right Nassau store and as well as a new Solomon’s neighbourhood store. The building purchase and relocation is expected to aid in the reduction of high and increasing rental costs.”

Meanwhile, AML Foods said around half of its existing stores have been converted to new ‘planograms’ - upgraded product displays and visual merchandising - which has already helped to boost sales. It is also invested in technology that has reduced buying/order errors, and promised that it will soon launch its e-commerce division.

“Just over 50 percent of our stores have been reset to our new planograms, and we have already begun to see improved sales results in these locations. The use of planograms is expected to improve [the] customer shopping experience through improved variety and stock levels,” the BISX-listed food retail and franchise group said.

“Our implementation of Electronic Data Interface (EDI) commenced, and key suppliers who provided over one one-third of our purchased inventory during the year are now using EDI. This has resulted in enhanced quality of data, a reduction in human error and improved ordering cycle speeds. We will continue to invest in EDI where possible.

“The culmination of our efforts of the past few years to launch our e-commerce division is near. We expect to launch e-commerce in Exuma Markets within the upcoming months and roll-out the platform to other locations shortly after. Our plan is to reach existing customers through online shopping but also customers on islands where we do not have a store presence.”

Gavin Watchorn, AML Foods’ president and chief executive, admitted to shareholders that high inflation had taken a bite out of the group’s earnings during the year to end-April 2023 and that its financial performance for the period had failed to meet expectations.

“This past year, our performance did not meet our expectations, as due to the highest inflation rate in generations, customers’ shopping habits were affected by changes to the types and quantities of products that they bought. Consequently, this is having a short-term impact on our performance,” he acknowledged.

“Each week, we process approximately 75,000 transactions throughout our 19 locations over three islands. We appreciate that our stores are an important part of our customers lives, and we aim to strengthen that relationship through providing great experiences, that will make us the first choice for our customers’ primary shop – whether that is for groceries or a quick service meal.

“This focus on improving our customers’ shopping experience is driving much of our short-term objectives – equipment upgrades and store resets in our Fresh Market brands to the much larger project of a complete remodel of our Solomon’s Nassau store and the relocation of Cost Right Nassau,” Mr Watchorn continued.

“The purchase of the property formerly leased by Solomon’s Nassau provides us with greater strategic certainty for that business, as well as Cost Right Nassau, and will result in significant expense savings over the long-term. We expect to complete the remodels and resets in our existing stores within the next 24 months, and we will then shift our focus back to expansion.

“The opening of our Solomon’s Downtown Freeport store has filled a void in the Grand Bahama market and has also allowed us to create a smaller store format that we can replicate in other locations. There are several areas that we have identified as targets for our long-term growth plans and, as part of this strategic planning, we recently purchased a property on Faith Avenue, near the intersection with Carmichael Road in New Providence.

“Our plans are to convert this property into a shopping centre with a Solomon’s neighbourhood store as the anchor tenant.” Turning to the future, Mr Watchorn said AML Foods’ objective remains to increase total group turnover to $250m by 2030 - a 35 percent or $65m increase from the near-$185m generated during the prior financial year.

“Looking ahead, I foresee continued change for our industry and our company, especially given the uncertainty in the local and global markets. I am encouraging our team to embrace these changes and to focus on the challenge of meeting the evolving needs of our customers, while delivering upon the expectations of our shareholders,” the AML chief added.

“Our outlook on the success of our business remains unchanged, and we will continue to invest in technology and our people as we work to grow our company to $250m in revenues by 2030. To continue growing our company and improving shareholder value, we will remain committed to managing through the current industry conditions while, at the same time, pursuing opportunities to expand our retail footprint, integrate our supply chain network and provide complementary services to our customers.”