September 06, 2013
Food prices have risen by three to five percent as a result of the impact of new and increased fees and taxes, grocery retailers and wholesalers revealed yesterday.
Phil Lightbourne, owner of Phil's Food Services, told Guardian Business that he has had no choice but to pass on the higher costs he is experiencing for wholesale product to consumers, adding that the rises come at a time when the economy is already "definitely" worse than last year, with overall sales at Phil's Food Services down 20 percent compared with 2012.
"It's slow all around. The whole economy is slow.
The fees and all the increases don't help the business. So far costs have gone up anywhere from three to four percent per container," he said.
Lightbourne added that one recent shipment of food items from the D'Albenas Agency, which would have previously cost $35,000, cost him $40,000 - an almost 15 percent jump.
Lightbourne attributed the price increases to the new customs fee, higher business license fee and increased shipping costs. "Put it this way, whatever cost I endure goes to the shopping public," said Lightbourne.
"The rates have gone up so high on all of these products, the way it is now, they take what you make.
It's caused everyone to raise prices. You can't play the hero."
Lightbourne described 2013 as a "difficult year" in general for his business, adding that "everyone is looking for a better 2014." "It's been a tough ride," the retailer added.
His comments were echoed by another grocery industry source, who spoke on condition of anonymity. "Price increases are going through the system very quickly.
The increased cost of doing business with the government is rolling through. The wholesalers are also putting up prices quite a bit and seemingly all together.
We've got notification of price increases from quite a few wholesalers on everything they sell," said the retail insider.
He added that the "three to four percent" figure quoted by Lightbourne reflected his experience.
Like Lightbourne, the retail insider said that he was attributing the increases to the customs fee, business license fee and higher shipping costs, however unlike Lightbourne he said that he did not believe the higher shipping costs could be attributed to the exit of the Crowley shipping company from the market in July.
"The increases have been on the cards for most of the year," he added.
Critically, the source added that the price effect would not be only a food retail issue, but would impact the wider economy.
"From what I am hearing talking to people, I think there's been a major shift in consumer confidence arising from the budget. People are pulling back on spending due to uncertainty.
That's the general feeling in the business community."
Meanwhile, a wholesaler, also speaking on condition of anonymity, confirmed his company had been forced to raise prices due to the overall business environment and new costs that have arisen, adding that a "four to five percent" figure is accurate in his experience.
"Absolutely it's caused prices to go up. We've been passing them on as we get through new product."
However, on the bright side, the wholesaler noted that prices remain lower than they have been in previous years when oil costs spiked. Lightbourne said that he will continue to fight the cost increases by buying in greater volumes.
"The smart businessmen is the only one who will win, and the only way to win is to buy in volume. Bahamians will shop around for deals," added the businessman.
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