BISX-listed AML Foods has warned that “the size of the pie” remains unknown when it comes to Bahamian consumer spending this Christmas.
Gavin Watchorn, the group’s president and chief executive, told Tribune Business that while it was “very confident” of gaining its due share, the extent of holiday expenditure was difficult to predict given continued economic uncertainty and fragile confidence.
He expressed hope that the sales “uptick” witnessed over the past two-three weeks would continue through the last pre-Christmas shopping weekend, with AML Foods having endured a “soft” two months through October and November. Disclosing that fellow retailers had seen a similar trend, Mr Watchorn told this newspaper: “Bahamian consumers are generally last minute. We’re as prepared as we can be.
“We have our stock in, and have great prices and value for customers, and are very confident that we will get our share of the business out there and maybe more.”
He added: “How the economy is for Christmas? I don’t know if anyone truly knows that. There hasn’t been anything over the last couple of months showing that the economy’s getting better.
“The reality is that the economy’s still soft, and we’re driven by consumer spending. If consumers don’t have the spending power, we will see that in the spending and sales numbers.
“But at AML we’re very confident we will get our share. How big the pie is remains to be seen.”
AML Foods, which owns the Solomon’s SuperCentre, Solomon’s Fresh Market and Cost Right brands, plus the Domino’s Pizza franchise, saw a year-over-year decline in October and November numbers compared to 2016.
Mr Watchorn suggested this may have been linked to September’s hurricane “scares”, which resulted in Bahamian consumers stocking up on food and other supplies given the brushes with Irma and Maria.
“The hurricane scares in September gave us a bit of a bump,” he told Tribune Business. “October was rather soft for us, and we were surprised with that. November was soft as well, and in December we’ve seen a pick-up again.
“We have seen an uptick over the last two-three weeks, so hopefully that’s a good sign for Christmas. It’s better than in the previous two months. October and November were soft compared to where we were trending, and we’ve seen an uptick back up to the trends we saw earlier in the year.”
Mr Watchorn said AML Foods was not alone in this, adding: “I talked to other businesses, and all had the same trends: After the hurricane they saw a decline in sales, and it took a while to climb back up.”
Despite the ‘softness’, AML Foods unveiled a 105 per cent increase in net profit for the three months to end-October 2017. The ‘bottom line’ jumped from $432,000 to $886,000 despite the BISX-listed group incurring $231,000 in pre-opening expenses related to its just-launched Solomon’s Yamacraw store.
“When you take out those opening costs and look above that line, we’re pleased with the numbers given that October was a soft month compared to prior years,” Mr Watchorn said.
“We’re very pleased with how the Yamacraw store has turned out. It’s a beautiful store, modern, well-built and very energy efficient; all the usual things we try to achieve with a location like this.
“The residents of the area have been very welcoming, very appreciative a quality store built in that area. The numbers are pretty much as expected, having been open a few weeks. and they’re meeting expectations. We’re pleased with where we are.”
AML Foods’ improved October quarter was largely driven by its top-line, where sales jumped 3.6 per cent or $1.312 million to $37.831 million. With cost of sales largely flat, gross profit rose by 7.8 per cent to $12.319 million, up from $11.43 million the year before.
AML Foods’ net operating profit increased 93 per cent to $1.494 million, compared to $773,000 the year prior, with the balance sheet closing October 2017 with $37.8 million in net equity.
For the first six months of its current financial year, AML Foods’ net profits from continuing operations were ahead by 14.4 per cent, standing at $2.191 million compared to $1.915 million.
This was again driven by a sales increase that outpaced the growth in the group’s costs, which produced improvements in gross profit and net operating profit margins.
Franklyn Butler, AML Foods chairman, said: “We are pleased that we were able to maintain positive sales and performance levels during the period, given the highly competitive retail environment that we currently operate in.
“Over the next quarter we will remain focused on growing transaction counts across all brands by staying competitive and driving value for our customers.”