Mon | May 27, 2019

As roadworks impact sales ... GraceKennedy looks to delivery service to boost Hi-Lo business

Published:Sunday | November 25, 2018 | 12:00 AMSteven Jackson
Group CEO of GraceKennedy Limited, Don Wehby.

GraceKennedy Limited (GK), one of the Caribbean's largest and most dynamic food and finance corporate entities, is planning to update its Hi-Lo application for mobile phones to include deliveries of food and other items to set locations, starting with Manor Park, St Andrew, by the latest, next March.

The Manor Park supermarket, one of its better stores, is currently beset with reduced shopping traffic due to roadworks in the Corporate Area, but on the other hand, another unit of GK benefited from increased business arising from the roadwork because they are the insurers for the equipment that the contractors are using.

Shoppers in the Manor Park area can expect an online delivery service by next March. Before June 2019, the updated app will see new features for all of the company's 13 locations.

"We are now negotiating with a company to do deliveries. We will be starting with Manor Park because of the road construction in Constant Spring," said Don Wehby, group CEO, in a conversation with The Financial Gleaner on Friday.

The company recalled that its Barbican, St Andrew-based store took a "big hit", with sales down 30 to 40 per cent during another round of roadwork last year. With the completion of that project that store recovered sales, said Wehby at a recent online investors briefing.

"But Constant Spring roadworks is impacting our Manor Park store, which is one of our more profitable stores. So we are planning to have a delivery service where you can call in to the Manor Park store and get your groceries delivered because we recognise that it could be very inconvenient for some of our customers to come to the Manor Park store due to the roadworks," said Wehby at the briefing.

Hi-Lo, on a whole, performed well as it benefited from a US$8 million investment in its modernisation in recent years. Wehby indicated that the group would next refurbish the Hi-Lo store at the University of West Indies, Mona.

 

MORE SPACE

 

"The challenge is that there needs to be more space. Long lines and only two cashiers. I will try to engage the leadership of the UWI to see if we can get additional space there. But the plan to refurbish the store is well warranted in terms of what I am seeing there," stated Wehby.

There is a series of ongoing roadworks in the Corporate Area, including at Constant Spring Road, Three Miles, Mandela Highway, among other areas. The improvement works, which are meant to address traffic congestion, were contracted to China Harbour Engineering Company by the Jamaican Government through the National Works Agency. The works are set to persist until 2019. GK General Insurance has benefited from increased coverage due to the roadwork.

"We are very pleased that we are the insurer for most of these projects taking place, and so we have seen strong growth in our engineering portfolio at GK Insurance as well. So the revenue growth in insurance and returns on our investment income led to strong profit performance for the insurance segment," said chief financial officer Frank James at the online briefing.

Over nine months, GK group made $3.7 billion net profit on $73.8 billion in revenues.

steven.jackson@gleanerjm.com