Jun 2010 Financial News

Hi-Lo targets Portmore

Jun 16, 2010

Retail grocery chain Hi-Lo Food Stores will enter Portmore, St Catherine later this year, with plans to commission its first store by yearend.

The GraceKennedy-owned subsidiary has not revealed the exact location of the new supermarket in the municipality, but it is likely to be near the cluster of gated residences that have sprung up in the sprawling, mixed-residential and commercial zone in the last five years.

"We will be opening the new store in the last quarter. We will be offering several services from the new location but would rather not elaborate at this time," Hi-Lo general manager Andrea Coy said Monday.

The new store will cost US$1 million (J$86 million) to set up and employ about 50 people, Coy said. It will become the 15th in the chain.

The chain is currently recruiting senior staff for St Catherine, including managers, meat and produce supervisors, and personnel for accounts and customer service.

Hi-Lo has been in expansion mode since mid-2009 when it acquired two supermarket operations, the 18,000 square foot Pavilion store in Kingston and the 26,000 square foot Fairview store in Montego Bay from the Wayne Chen-led Super Plus Food Stores.

Coy did not say whether the new store at Portmore - a community of some 250,000 - would be operated from owned or leased premises.

Last year, Hi-Lo Food Stores recorded 17 per cent growth in revenue and a 25 per cent increase in net profit, Coy said.

Pre-tax profits of $723.8 million were up 18 per cent year-on-year.

The new store, combined with upgrading projects already completed is expected to improve on the 2009 performance.

"We are trying to establish our presence and capture market share amidst the economic challenges," Coy said.

"Despite this, the stores continue to show improvement month over month in revenue and customer traffic and we are continuing to tailor our marketing initiatives to assist these stores in achieving their targets."

The main upgrade for the chain in 2009 was the renovation of the Cross Roads, Kingston store which Coy said resulted in a three per cent growth in customer count and improvement in revenue and net profit.

"Customers have been very happy with the improved shopping experience," the Hi-Lo GM said.

Hot meals are currently being sold at the location and there are plans to offer additional services before the end of the year, she said.

The supermarket chain is currently present in seven parishes, with five stores in Kingston, one in Port Maria, three in Westmoreland, two in Montego Bay, and one each in Ocho Rios, Mandeville and Spanish Town. Locations offer grocery and non-grocery items and in some locations, remittance services.

Hi-Lo Food Stores started operating in Jamaica in 1954. it was originally owned by the Neal and Massy Group, but was acquired by GraceKennedy in 1984, 25 years ago, as a chain of six stores. It now falls under the conglomerate's GK Foods division.


Source:
Avia Collinder, Business Writer
avia.collinder@gleanerjm.com
Jamaica Gleaner
Wednesday June 16, 2010

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