The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AML Foods is aiming for non-food retail sales to comprise “north of 25 per cent of our sales mix”, in the hope that diversification will counter Value-Added Tax’s (VAT) potential impact.

Gavin Watchorn, the BISX-listed group’s chief executive, told Tribune Business it would “continue to invest” in the food franchise business as it prepares to literally go head-to-head with Wendy’s.

Although Mr Watchorn would not confirm the location for AML Foods’ first Carl’s Jnr outlet, Tribune Business understands it is being constructed in the Solomon’s SuperCentre parking lot - a site opposite Wendy’s prime Mall at Marathon location.

The AML Foods chief, though, did disclose that Carl’s Jnr’s $1.25 million flagship Nassau location is due to open on schedule in the 2014 second quarter - a move that will create 60 jobs.

And he indicated that AML Foods’ increasing focus on its food franchise business was part of a wider strategy to better diversify the group’s revenue streams and mitigate the potentially negative impact VAT will have on its core food retail business.

“We need to start diversifying our business,” Mr Watchorn told Tribune Business. “The food franchise business is a strong business, a growth business, one that will do well.

“We want to invest in that, diversifying our sales mix from food, to having that [food franchise] as a greater proportion of our sales mix. When you factor in general merchandise, clothing and franchise sales, ultimately we’d like that to be north of 25 per cent of the sales mix.”

AML Foods’ desire for more diversification is likely to have become stronger in recent weeks, after the draft VAT Bill and regulations revealed that Bahamian food retailers will only be able to recover input tax in proportion to the quantity of taxable items they sell.

With VAT ‘exempt’ products likely accounting for anywhere between 50-80 per cent of food retailers’ inventories, the need to reduce this proportion and diversify away from this market is self-evident.

Elsewhere, Mr Watchorn said the four Domino’s Pizza stores refitted to-date had each enjoyed “a sales bounce”.

“Domino’s is performing well,” he told Tribune Business. “We’re pleased with how that’s going. It’s holding up well under the economic conditions we’re in. It can always be better, but we’re happy with how that’s performing.

“We have four of our locations completed. Cable Beach was the first, and then we did Golden Gates, Port Lucaya and Harbour Bay. The stores look very good, very modern, and each of them have given us a bounce in sales, so we have plans to do a couple more next year.”

Mr Watchorn said both Solomon’s Fresh Market outlets - at Harbour Bay and Old Fort Bay Town Centre - were performing “very well” for the company.

And in Grand Bahama, where AML Foods is widely considered the market’s largest player, Mr Watchorn added: “The Freeport market is performing well for us. It’s stronger than the Nassau market.”