Page 35 - Neal and Massy Holdings Annual Report 2012

33 forward focused
continue creating excitement from our various value propositions
well into the foreseeable future, and hope in the coming year to
break ground for our first super combination store format in Trinidad
and Tobago.
The two Alternative Format stores, LB’s and Food Master, have
been rebranded under the new banner “Diskomart”. Both stores
were closed for two days to facilitate the rebranding exercise, and
we have adjusted the variety and aligned the offering to cater to
value-seeking consumer segments.
Super Centre Limited (Super Centre) achieved moderate
results, despite the challenging economic conditions in the Barbados
market. Super Centre remains the market leader in the food
retail industry, but has come under increasing competition from
discounters, as consumers have become more price conscious in
the weakened economy. The company was unable to achieve the
anticipated top-line growth. Projected gross profit and net income
consequently fell short. During the year, a strategic decision was
taken to amalgamate the operations of Peronne Manufacturing
into Super Centre, implementation of which was completed at the
end of June 2012. One-off costs associated with the consolidation
further eroded profits for Super Centre, but the amalgamation will
produce savings for Super Centre in the future.
As mentioned last year, Super Centre established a new
centralised produce facility, which resulted in a major collaboration
with the cruise ship industry. Sales to this sector continue to be
extremely buoyant, and it is expected that, by comparison with
2012, the 2013 tourist season will be more fruitful for the company.
Stronger sales growth and greater expense control are key elements
of the 2013 Operating Plan. We will continue to price aggressively
in core categories to increase customer traffic, and to encourage
spending by providing greater value, particularly on the perimeter
(i.e. fresh food offerings). At the same time, the optimisation of
operating procedures is on the way to improve management of
operational cost, and to increase productivity with a more efficient
business model. The redevelopment of Sunset Crest is now in the
design phase, and we have a signed agreement to purchase land
at Kendal Hill to develop a new super combination store model.
Knights Pharmacies (Knights), the retail pharmacy unit of Super
Centre, performed creditably despite the sales decline occasioned
by a change in Government policy with regard to the Barbados
Drug Service. The Knights Health Advantage Club continues to be
promoted, and it is notably an important strategic pillar of growth
for Knights, by offering its patients value-added health care services.
The club now has approximately 1,700 members and several more
are expected to join in the coming financial year.
DacostaMannings Retail Limited (DMR) was split out of
Dacosta Mannings Inc. in 2012. The retail business was incorporated
into its own entity DMR, the distribution business lines were
incorporated into another entity – Dacosta Distribution Limited and
real estate properties remained with Dacosta Mannings Inc., which
was eventually amalgamated with SP Musson. DMR realised some
revenue growth over the past year due to the introduction of new
ranges of furniture and consumer electronics, as well as a new
consumer credit vehicle (Max Credit), which drew an encouraging
response from our customers. However, these gains were eroded
primarily by the increased costs related to the discontinuation of
hardware inventory, and one-off finance costs related to the original
Dacosta Mannings Inc. split, officially completed early in the financial
year.
A transformative business plan for further integration into the
Retail LOB has been put in place and is expected to bear fruit in the
coming financial year.
Gablewoods Supermart Limited (Associate Company) is the
parent of the operating company Consolidated Foods Limited (CFL),
which currently has nine supermarkets (Super J’s) and one warehouse
club (Mega J) in St Lucia, as well as two supermarkets (Super J) and
one Save-A-Lot franchise discounter in St Vincent. CFL in St Lucia
continues to show strong growth in sales and profits, but has been
experiencing some challenges with the operations in St Vincent.
CFL is looking forward to another year of growth in 2013, and the
company will continue to add Shareholder Value to the Group in
the Eastern Caribbean.