The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AML Foods is targeting two new stores in southern New Providence within the next five years, while also scouting for a "more modern" location for its Cost Right Nassau outlet.

Franklyn Butler II, the BISX-listed food and franchise group's chairman, told shareholders in its annual report that it plans to continue rolling-out 'neighbourhood' food stores following next month's planned opening of Solomon's Yamacraw.

"Our future growth plan has begun to take shape," he wrote. "We are expanding our brand of neighbourhood supermarkets, and are looking forward to the opening of Solomon's Yamacraw in the fall of this year.

"The opening of this new location will allow us to serve the residents of eastern New Providence and enter into a market that we previously had no presence [in]. The next step from this is to open new stores in both the south-west and south of New Providence. We also have plans to relocate Cost Right Nassau to a better, more modern facility."

Gavin Watchorn, AML Foods' chief executive, confirmed the company's five-year growth strategy and plans to relocate Cost Right from its current location at Town Centre Mall when its lease expires in early 2020.

The group has acquired a 4.506 acre site on Charles Saunders Highway, between Seabreeze Estates and Pinewood Gardens, as the potential site for another 'neighbourhood' supermarket.

"We have also purchased property on Charles Saunders Highway in southern New Providence, another area that we do not currently serve and that we look forward to establishing our presence in," Mr Watchorn told shareholders.

"Earlier this year, we earnestly begun searching for property in New Providence to relocate Cost Right Nassau. Our existing location is far from ideal in many respects, and we are excited about being able to offer small business owners and consumers a true warehouse club experience.

"We have targeted two more geographic areas for growth of our Solomon's brand, and hope to complete this phase of our expansion within five years. These acquisitions are key steps of our strategic plans for growth, but represent only the first of four areas that we have identified as critical to achieving our long-term vision and purpose."

AML Foods' annual report for the 12 months to end-April 2017 disclosed that the Cost Right relocation will also involve finding a new home for its corporate head office, which is also located at the Town Centre Mall.

"At the new location, the company hopes to replicate Cost Right Freeport's floor plan, which accommodates the entire store (grocery and general merchandise) on one level, which is more in keeping with the club format," AML Foods said. "The company anticipates being able to realise significant operational efficiencies with this change."

Cost Right Nassau currently occupies two floors at the Town Centre Mall, and the BISX-listed group is focused on the relocation simultaneously with its growth plans.

Mr Watchorn added that AML Foods was also targeting technology upgrades and staff development as priorities, along with a renewed focus on "not only meeting but exceeding customer expectations."

"The second area of focus will be the use of technology to drive our decision-making and improve our performance," he told shareholders. "We will invest $3 million over the next 36 months to greatly enhance our technology capabilities, installing a modern, state-of-the-art operating system for our food distribution division. This will eliminate manual processes and integrate our systems into a single platform.

"The third area of focus will be the training and development of our team. The prior levels of investment in training were well below what was required, and we now find ourselves having to catch up. We will invest $750,000 in 2018 to establish training centres of excellence in New Providence and Grand Bahama."

Mr Watchorn then conceded: "Underlying all of these key steps is our commitment to creating a culture within AML Foods that is focused not only on achievement but also on our people.

"We took a hard look at ourselves and realised that in our drive for improved performance we have not invested enough in our people. I have committed to our leaders and team that we will make this right - we cannot move our company forward if our people do not come along with us."

Looking ahead to its current financial year, AML Foods reiterated its concerns about the impact Grand Bahama's economic woes may have on its various Freeport-based formats.

"Even though the overall economic outlook for Freeport remains sluggish, the company is still very pleased with the overall performance of its three stores in that market,"the group said.

"The closure of major hotels in Grand Bahama has caused a decrease in wholesale sales, but retail sales remains strong. Like other stores in the Port Lucaya Marketplace, sales at the company's pizza store (Domino's) at this location have been severely affected."

AML Foods added that "competition from unconventional vendors has increased" as a result of hotel closures and continued high unemployment, but indicated that it was anticipating an economic boost from Baha Mar's full opening in March/April 2018.

"During periods of high unemployment or under-employment, the risk of shrink and loss and damage increases," the group said. "In order to mitigate this risk, the company has allocated additional human resources to supplement physical inventory counts."