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GK spending $1b on HiLo upgrade, weeding out poor performers

Published:Wednesday | December 3, 2014 | 12:00 AM

Avia Collinder, Business Reporter

Don Wehby, group CEO of the GraceKennedy group says that the com-pany is reviewing stores in its Hi-Lo supermarket chain where margins and sales have been declining.

Already the company has decided to shutter its Main Street, Ocho Rios store on December 31, with GK group CEO Don Wehby saying that action is due to both falling sales and the end of the lease.

"The landlords have indicated their desire to reclaim the property. I must point out that the sales and margins for that store have been declining over the last few years," said Wehby.

Hi-Lo might re-enter St Ann were conditions to change, he said.

The Mandeville store is also experiencing similar results.

The company now has 13 stores in six parishes - Kingston, St James, St Catherine, Westmoreland, Manchester and St Mary.

"We are continuously evaluating our existing stores as well seeking new locations, as a good location is a critical element for the success of any retail business," said Wehby.

Otherwise, he noted that GraceKennedy was bullish on the grocery business.

"We are committed to food retail and to doing it well. The feedback received from our customers has been well received, and as such, we have embarked on the renovation of four stores over a two-year period, with our Manor Park store being the first to have been completed and two other stores, Barbican and Montego Bay, slated for upgrade in the first half of 2015.

25 per cent increase

The total cost of the renovations is estimated at approximately $1 billion, he outlined.

Wehby said that since completion, the Manor Park store has seen growth in revenue, with a 25 per cent increase being experienced in the month of October, year over year.

"We have also seen an increase in customer traffic, both positive indicators that the customers have been happy with the outcome of the newly renovated store."

Wehby also told Wednesday Business that the Portmore Pines supermarket was also performing "beyond expectations" with significant growth in sales year over year. The store is expected to see new competition from Gladstone Loshusan's new Progressive supermarket, on which construction was recently finalised but is yet to become operational.

"Gladdy runs a good show," said the GK boss, who indicated he expects Hi-Lo to feel some impact from the newcomer.

Wehby, however, denied that the planned shuttering of Hi-Lo's Ocho Rios store on December 31 was related in any way to the opening by Progressive of a new store in the last week of November.