AML Foods has shaved $1.2 million from its expense base so far this year by imposing efficiencies, re-negotiating contracts and realizing synergies between its growing list of businesses. According to Gavin Watchorn the CEO of AML Foods, reducing operating costs has been a key objective for 2013 following a rapid period of expansion. "We have done a lot of work on synergies and focusing on areas for savings," he said. "The $1.2 million is a combination of efficiencies and maximizing synergies. We think there is more to be had; $1.2 million is real or identified.
There is another $500,000 we must work to realize, in addition to that." AML Foods opened three major supermarkets in just over a year, capitalizing on the demise of the City Market franchise. While sales have continued to rise in recent months, expense tightening comes at an important time. Watchorn told Guardian Business that today's official grand opening of Solomon's Fresh Market at Harbour Bay Shopping Centre will be used as a platform to educate the public on healthy eating. Products at the supermarket are often more expensive than other stores, he said, but attached to that is a new echelon of quality.
Over the coming months, AML plans to make more of an effort engaging the public on the benefits of eating well. The CEO said sales at the store have been steady, but overall the location has underachieved compared to management expectations. The store is the second Solomon's Fresh Market. The first, near Old Fort Bay, exceeded expectations in many respects. "The sales out east are okay. We would like them to be a bit higher," he said. "We are having challenges with residents in eastern New Providence in terms of accepting the format." The grand opening will offer information on healthy eating and free samples for the public.
On an overall sales basis, the CEO clarified that Harbour Bay is actually ahead of the Old Fort location, although that was expected given the population density. He felt it should have the potential to do more than what it's doing. AML Foods hires 180 Bahamians between those two specialty stores. Across the company, consumers have reportedly clamped down on discretionary spending. Price controlled basic items enjoy strong sales, but general merchandise is flatlining.
AML Foods has decided to hold off on the opening of its much-anticipated Carl's Jr franchise due to this lull in consumer spending. "There is a traditional decline after Christmas. Consumers tend to max themselves out over this period," Watchorn explained. "However, the rebound seems to take a little but longer each year."
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