The Tribune

By NEIL HARTNELL

and FAY SIMMONS

Tribune Business Reporters

Food stores yesterday voiced fears they will be viewed as “the bad guys taking advantage of people” if Sebas Bastian’s pop-up grocery store concept is not handled properly, with one asserting: “We just hope it won’t interfere with the regular business flow.”

Debra Symonette, Super Value’s president, told Tribune Business that the Fort Charlotte MP’s bid to ease cost of living pressures for his constituents via Saturday’s offering of up to 40 percent discounts on key food items needs to be perceived as a “charitable” initiative rather than a new food store entering into competition with established rivals such as her 13-store chain.

Emphasising that she is not opposed to Mr Bastian’s efforts to bring relief to struggling Bahamians, and that she is “extremely happy” his constituents are getting a much-needed “break” from high costs, the Super Value chief nevertheless warned that - by selling groceries “at cost” and deep discounts - it could give the public the incorrect, misleading impression that food store businesses are, in effect, price gouging.

Ms Symonette told this newspapers that comparisons between food stores and Mr Bastian’s pop-up market are inappropriate as the two are not an ‘apples for apples’ or ‘oranges for oranges’ match. She explained that, unlike the minister for innovation and national development’s Saturday event, food stores are business enterprises that have to cover their costs and make a profit to keep their doors open.

Food distribution retailers and wholesalers employ hundreds of Bahamians, while covering major expenses such as rent and energy, and paying multiple government taxes such as VAT, Business Licence fees, Customs duties and National Insurance Board (NIB) contributions. Tribune Business was last week picking up growing concerns that Mr Bastian’s pop-up concept could undermine this model, and Ms Symonette confirmed the existence of such sentiments.

“Basically, he’s offering the stuff at cost or deeply discounted prices,” she told this newspaper. “That, to me, makes it more of a charitable organisation than a business. But, in a business, we need to make a gross profit to cover our expenses. And there are a lot of expenses.

“We have to cover our staff alone. Payroll is a major expense we have to cover, and we have expenses related to the Government - all the taxes we pay, VAT, Customs duties, Business Licence fees, NIB. How in the world can we possibly compete with someone offering goods at cost? If we were to do that, we would go out of business.

“It’s important for us to stay in business. Just the fact we are employing so many people and helping the economy in different ways. We help out in times of crisis, hurricanes.”

Mr Bastian signalled he will be having discussions with his fellow MPs to take the discount pop-up market to other constituencies - a move that may well further alarm food store businesses. Ms Symonette said it was vital that the industry not be perceived, or portrayed, as “the bad guys taking advantage of people when we are not. We are simply trying to cover our expenses and to remain viable”.

She added that it was critical that Mr Bastian, also the minister of innovation and national development, “gives the right concept out and not make it seem as if he is in the same category as we are”.

“It’s not that we’re not happy that the residents are getting a break,” Ms Symonette told Tribune Business. “We are extremely happy for them with the cost of living. Everyone is trying to find a way to save on costs. We’re just hoping it won’t interfere with the regular flow of business.”

The Super Value chief also appeared sceptical that the pop-up grocery market could be restricted to Fort Charlotte constituents only, while there was seemingly nothing to prevent attendees from buying in bulk for relatives or friends living outside the area.

Other sources have also questioned whether Mr Bastian needed licences and/or permits to stage Saturdays event, which Ms Symonette branded “a good question”. She added: “We also hope it’s being properly regulated.

“We source the best possible prices but we have to cover our expenses, and if you compare volunteers to employees who have to be paid, that’s a huge difference. I really cannot say where he’s getting his stuff.”

Mr Bastian could not be reached for comment before press time yesterday despite numerous Tribune Business attempts to reach him. However, this newspaper was told he was moved to act after seeing how many Fort Charlotte constituents were struggling to make ends meet, and pay all their bills, due to the ever-escalating cost of living.

The former Island Luck co-founder, who resigned from all his corporate posts prior to the May 12 general election, is also understood to not be seeking to enter the food retail or wholesale business but simply ease the financial burden on struggling Bahamians in his new role as an MP.

It is thought up to 30 percent of what was sold at Fort Charlotte’s pop-up market on Saturday was sourced from Bahamas-based distributors and retailers, with thousands of dollars spent locally.

Speaking at Saturday’s event, Mr Bastian said: “This is an initiative that we brought forward to bring much-needed relief to the cost of living. And the number one contributor … to the cost of living is food.

“So we partnered with local distributors, as well as international distributors, to really get wholesale prices, bring them in and just get our volunteers together, and we just sell these at cost.”

Mr Bastian added that his team also engaged in international sourcing, saying they “analysed the different costs from different regions and all that. We saw a lot of arbitrages in terms of differences in prices across several items.

“We realised that there was a savings of about up to 40 percent on many items that can be ascertained by facilitating an initiative like this,” he said. “We have the healthy options, and we have some not so healthy things, obviously. But we have to meet the consumers where they are.”

Cartons of eggs were on sale at 99 cents each, non-perishable items started at 39 cents, and other essentials such as toilet paper, diapers and feminine products started at $1.70.

However, one Bahamian grocer yesterday argued that established food retailers feel “under attack” from politicians entering the market with discounted food sales, adding that such events create an unfair playing field for businesses already grappling with rising costs.

Speaking to Tribune Business on condition of anonymity, the retailer said many grocery operators believe discounted food markets hosted by politicians misrepresent how the industry functions while placing legitimate businesses that employ Bahamians and operate year-round in an unfair light.

"It really is important that the real grocers have a voice," the retailer said. "We feel like we're being under attack all the time. What the hell is going on? For the good of who? Go look somewhere else."

The grocer argued that retailers cannot compete with one-off political events because they must cover payroll, utilities, rent, licensing fees and other operating costs every day. "This isn't a game for us. This isn't some political ploy. This is real life," the retailer said. "We're running real businesses that families depend on."

The retailer rejected suggestions that grocery stores are inflating prices, arguing competition keeps prices in check. "Competition keeps prices at market rates," the retailer said. "We have to do this consistently. We can't sell below cost because we'd be out of business."

The retailer also said businesses continue to absorb significant costs arising from the Davis administration’s recent decision to categorise unprepared foods as VAT ‘exempt’ rather than ‘zero-rated’, which prevents grocery stores from claiming or reclaiming the tax on their input expenses

"It looks good to the general public, but somebody has to absorb those costs," the retailer said. "If we can't absorb them, they eventually find their way back into the price of goods in another form."

The retailer added that businesses have also incurred thousands of dollars in software upgrades and system changes to accommodate the VAT policy adjustments.

"Every time there's a policy change, we spend thousands of dollars updating our systems, changing shelf labels and reconfiguring our software. Nobody compensates us for those costs,” they said.

The retailer said many grocers share similar concerns, and want greater opportunity to explain the realities of operating in today's retail environment. "Everybody is doing their best to stay competitive and stay in the market," the retailer said.

One social media posting, seen by Tribune Business, said: “If an MP is able to sell groceries 40–50 percent below what local grocers can even purchase them for, it creates an uneven playing field. Consumers will understandably buy the cheaper products, but private businesses cannot survive by selling below their own cost.

“Over time, this could result in reduced sales, staff lay-offs, fewer investments, business closures and less competition. Ironically, if local grocers become weaker or disappear, consumers could eventually face higher prices and fewer choices, not lower ones.

“If the cost of living is truly the problem, perhaps the better long-term solution is to reduce the costs that every grocery store faces through lower duties, lower taxes and other measures that allow all retailers to reduce prices for all Bahamians, rather than having elected officials compete with the very businesses that sustain our economy.

“Helping struggling families is a worthy goal. The challenge is ensuring that the solution provides relief without unintentionally undermining the businesses that create jobs, pay taxes, support charities and keep our communities fed every day.”