Thu | Dec 3, 2020

Countdown to Christmas - Businesses look to close revenue gap in busy season

Published:Sunday | November 22, 2020 | 8:13 AMKarena Bennett - Business Reporter

The Mall shopping complex in Kingston as seen in 2014.
The Mall shopping complex in Kingston as seen in 2014.

With people and traffic movement on the rise again, businesses are seeing signs that the peak commercial season will allow them to erase some of their pandemic-induced losses, and the countdown to Christmas is on.

For some shopping areas, yuletide decorations have been up since mid-November, as a subliminal welcome mat to shoppers.

But this year, retailers and other businesses won’t be banking on just foot traffic.

With social distancing protocols still in play, and pandemic-conscious shoppers still wary of crowds, there is expectation that commercial activity is unlikely to be as robust as in past seasons. This is borne out by the forecast for cargo processed through customs, which is projected to fall by around one-tenth by the time the year ends.

But for the business that Christmas will bring, companies are positioning for it and some are hedging their bets through e-commerce.

“We expect for it to be a busy Christmas,” said Derrick Cotterell, CEO and Chairman of Derrimon Trading Company, which both distributes foods to the retail sector and operates two supermarket brands, Sampars and Select.

“COVID-19 is still on us, so I don’t anticipate there will be many parties, but what we are sensing is that people still want to do small gatherings indoors as a way of relief from some of the challenges that this year brought. Once indoor gatherings are taking place, we expect to see our stocks moving,” he said.

Jamaica Customs Agency is anticipating a marginal decline in peak season cargo this year, but tells the Financial Gleaner that it has already started to deploy additional staff at the ports and warehouses, and announced extended operations: to incorporate Saturday December 12 and December 19, from 9 a.m. to 2 p.m.; and an additional hour each weekday, from December 14-23, for customers to do business at the Collections and Accounts Unit.

That’s in addition to the newly automated services that are being implemented at the agency, under the government’s continuing digitalisation programme.

Forecasts by the Customs Agency show that 105,614 non-commercial barrels are expected to enter the island over the period October to December 2020, which is about two per cent or 1,980 units below the similar quarter in 2019.

“Specifically for the month of December 2020, it is estimated that 6,335 small packages will be processed. This is likely to be 5 per cent or 358 pieces below November 2020, where 6,693 pieces were processed; and 1,911 or 23 per cent below December 2019, where 8,246 pieces were processed,” the Customs Agency said.

For commercial containerised shipments, the numbers processed over nine months to September totalled 55,000. Jamaica Customs’ data analytics model predicts that another 19,945 shipments will be processed for the quarter ending December. Of this number, 6,553 are estimated for the month of December, and will likely be 252 units or four per cent below the 6,805 processed for December 2019, the agency said.

Meanwhile, the export forecast for calendar 2020 is for volumes to decline by 11 per cent or 1,597 containers against the 14,838 containers exported last year.

Large distributor Wisynco has ramped order quantities for the festive season in anticipation of higher local sales, but at the same time is hopeful that new products being carried by the company such as Tru-Shake and the shockwave flavoured Boom energy drink will bolster revenue performance over the festive season into March 2021. Wisynco would be looking to make up the six per cent fall in revenue experienced in the September quarter.

Some of the hope for more sales, including among food and beverage companies, is pegged to the tourist market, where operators are looking to bring back more employees on the job as tourist arrivals trend upwards in the peak winter season.

Companies steeped in e-commerce, meanwhile, have fared well in the pandemic.

Courier company Mailpac, which has recorded a spike in revenue from new business sparked by the shift towards online transactions, is preparing for further growth of its online business over the festive season. The company led by Executive Chairman Khary Robinson has also increased logistics capabilities of its delivery segment to get goods to the doorstep of customers faster, having struck a new deal with long-time business partner, PriceSmart in April.

The arrangement allows for PriceSmart shoppers to buy goods through the local online platform of its business, Mailpac Local, and have their orders delivered nationwide.

“Mailpac has had to significantly increase its infrastructure and operational capabilities to support the growth in volume,” said Robinson.

Revenue for Mailpac Group was tracking $115 million ahead of the year-prior period, while year to date, the company’s revenue have crested $1.2 billion.

karena.bennett@gleanerjm.com