By NEIL HARTNELL
Tribune Business Editor
BISX-listed AML Foods is planning to launch an e-commerce division during its current financial year that will enable the group to supply clients “throughout The Bahamas”.
The Solomon’s and Cost Right operator unveiled the initiative in the just-released annual report for its 2022 financial year that closed at end-April, indicating that it plans to continue with an aggressive store expansion strategy into new locations building off its Exuma Markets acquisition.
“We plan to launch our e-commerce division in this 2022-2023 fiscal year and are excited about servicing islands throughout The Bahamas, utilising technology and expanding on our already strong logistics expertise,” the food retail and franchise group wrote, although it gave no specifics on the plans.
“Our Exuma store has proved a great addition to our fleet, and is only the first of several additions to support our growth strategy. In the upcoming months, we will re-open a third location in Grand Bahama. The downtown Freeport store opening represents our commitment to Grand Bahamians to rebuild following the loss of our Queen’s Highway location as a result of Hurricane Dorian.
“Looking at a longer term, we have future plans to expand with new store locations and new revenue streams. We are continuing to position ourselves to achieve our sales goal of $250m by 2030. Future sites will have a smaller footprint and require less capital injection. We also will streamline the design and build-out process, which will aid in efficiencies for new store builds.”
Based on current annual sales of $175m, AML Foods needs to grow its top-line by $75m over the next eight years - an annual growth rate of just over $9m - to hit that $250m target, which represents a near-43 percent increase on the present figure.
Looking at the immediate term, the BISX-listed group said inventory levels have increased by 20 percent year-over-year due to a combination of cost increases and improve stock levels. “There is no doubt that inflation and a potential recession are top of mind for economists and businesses globally, and we must be agile to manage profitability throughout this hyperinflationary period,” AML Foods said.
“Inflation will have a significant impact on consumer spending habits. As the price of gas and other commodities rise, grocery prices are not expected to get any cheaper. We have already begun to see significant impacts on our inventory valuation from the rise in supplier costs.
“Overall, inventory levels have increased nearly 20 percent compared to the same period last year. While a portion of the increase is due to improved in-stock levels, a large portion of the increase is representative of cost increases. This has had a direct impact on our cash levels and requires us to keep a keen eye on liquidity levels.”
The group continued: “We are betting big on technology, data insights and analytics. With consumer behaviour shifting from month to month, it’s imperative that we make rapid decisions and be able to quickly adapt our operations to an ever-changing environment. Our loyalty programme has launched at the ideal time as the need to know our customers and offer them the right assortment, products and personalised communications is critical to our success in the retail industry.
“We must also be more efficient and will look at ways to improve processes and optimise or reduce our current spend to soften any impact to profitability in the event sales soften. We are well-positioned and confident that our team will continue to deliver improved results to our shareholders.”
Giving more insight into its technology plans, AML Foods added: “We have invested heavily in technology over the past few years. Implementation of our new POS (point of sale system) was the last major step in laying the ground work for future digital projects.
“In addition to the launch of our loyalty programme, we are working to implement Electronic Data Interface (EDI) with our key vendors. EDI allows us to electronically exchange documents like purchase orders, invoices and other documents with suppliers, and will replace the manual process of sending these documents. This will lend to significant efficiencies in our processes for ordering and receiving products.
“Over the next 12 months, we will focus on leveraging our loyalty programme and data analytics to understand our customers and service them better, using technology to support our understanding of trends and areas of opportunity within the business. We anticipate an increase in our market share in Grand Bahama through the opening of our new downtown Freeport location.”