Location of stores works for and against Mother's
Patties as a low-budget meal option have created strong sales for Mother's Enterprises Limited, whose nationwide chain is one third concentrated in downtown Kingston, a centre of commerce and offices which pulls high volumes of pedestrian traffic.
But the nature of the location, prone as parts of the city's core are to upheavals of violence, is now working against the chain whose sales are down, notwithstanding discounting to gin up business.
Value meals have provided relatively stable income in the recession to food companies, but some of it is the result of business generated through specials and discountings.
Last year, Mother's sales rose 40 per cent between March and December, said General Manager Richard Foreman.
Those sales were pushed by discounting on chicken meals, Foreman told the Financial Gleaner.
Company revenue continued to grow income into 2010 at an average pace of 10 per cent per month up to the end of the first quarter, March, he said.
Within the second quarter, however, sales began to evaporate and were only five per cent above 2009 levels, Foreman said.
The turnaround came in May when, with the west Kingston civil unrest, marked by a clash of security forces and gangs, Mother's shuttered six stores downtown for an extended period, he said.
Mother's operates a chain of 18 stores: six in downtown Kingston and Cross Roads; one in Spanish Town, St Catherine, where break-fast sales are especially hard hit because residents fear entering the town centre too early when the streets are vacant, and other business is down because people are migrating away from the violence; another two in Half-Way Tree and one in Liguanea, Kingston; two in Ocho Rios, St Ann; and one each in Portmore, Linstead, May Pen, Mande-ville and Santa Cruz.
There is also a franchise operation in Morant Bay, St Thomas.
Weight of gct
Mother's last adjusted prices in March; that, plus higher over-heads and in-creased con-sumption taxes on inputs from 16.5 per cent to 17.5 per cent that went into effectin January have weighed on the company's perfor-mance. Though patties are GCT exempt, the GM said, the inputs to make the food are not.
The food chain operates in a com-petitive patty mar-ket in which Tastee and Juici Patties are strong players - all offering menu boards that include chicken combos and other meals.
Mother's stays in the game by locating stores in busy town centres, but also by competing on price.
Foreman says his chicken meals, for example, recently reduced to $359 for a two-piece combo, is at least $60 below competitors' prices.
He also offers three combos for patties, burgers and chicken ranging in price from $110 to $249.
It is not the only player offering specials - Tastee, for example, is advertising a $230 lunch meal - so Mother's is also hedging its bet by investing heavily in marketing, though it declined comment on the size of that budget.
Jeanette Lewis, marketing manager of the patty retailer, said that following a period of increased costs in 2008 with rising oil prices and high electricity costs, the company, through "prudent cost-control methods", was able to bring down product prices.
Overall, she said, sales are up since the recession took hold in September/October 2008.
Soon after January 2009, Mother's started a series of promotions, offering meals for prices between $99 and $299, which the company says was the main driver for the 40 per cent growth of business March and December 2009. The company officials have declined to reveal actual revenue.
"Mother's continues to invest in brand-building marketing initiatives. We are investing more in marketing in 2010 than we did in 2009," Lewis said.
Mother's Enterprises is owned by AB Holdings Limited, a company headed by Adrian Foreman.