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Hi-Lo gives up on Mandeville, for now

Published:Tuesday | August 25, 2015 | 11:15 AM
Andrea Coy, senior general manager for Global Category Management, GraceKennedy Limited.

At first, Hi-Lo was unwilling to give up on Mandeville. Perhaps changing the venue might help.

But the relocation of the super-market operation a dozen years ago from Manchester Shopping Centre to Ward Avenue failed to generate the type of business needed for the store to pay its way.

Last week, GraceKennedy, the parent company of Hi-Lo Food Stores Limited, began advertising the supermarket's fixtures for sale, having decided earlier this year to wind down the operation and close shop - cutting 28 jobs in the process.

It signalled the end of a 24-year relationship.

But even with that decision made, GraceKennedy is signalling that at some point in the future, Hi-Lo will likely return to Mandeville - the capital town and primary commercial hub for Manchester.

"Hi-Lo has operated in the Mandeville location for several years. Prior to the Ward Avenue location, we operated from the Manchester Shopping Centre. The Ward Avenue location did not attract the customer traffic anticipated despite the implementation of several initiatives. Consequently, we made a decision to close the store on February 28, 2015," said GK's Senior General Manager for Global Category Management, Andrea Coy, who oversees the Hi-Lo supermarket chain.

"There are no immediate plans to re-open at another location in Mandeville, but this is being kept under review. We are always assessing the market for ideal locations to expand our Hi-Lo stores and would be willing to return to Mandeville in the future, should we find a suitable location," Coy said.

The Financial Gleaner otherwise understands from grocery sources that the market has also softened for other retailers. Hi-Lo's main rivals in the Manchester capital were home-grown SuperPlus, Shoppers Fair and MegaMart, but there are also "a plethora" of popular mini-marts and small grocers.

Mandeville's closure follows that of Hi-Lo's Ocho Rios store in late 2014. GK Group CEO Don Wehby said then that the decision was based on falling sales, while the timing of the lockdown coincided with the end of the store's lease, which the conglomerate opted not to renew.

The supermarket chain now has 12 stores islandwide, employing 500.

Coy, when asked if other marginal performers were under review,

said: "We continuously assess the performance of our stores and implement plans to improve performance as needed. Our refurbishing project has had a significant impact on customer traffic and increased revenues in our Manor Park and Barbican locations. Customer feedback has also been very positive. We anticipate this will be the case when the other branches have been refurbished as well."

GraceKennedy does not comment on the specific financial performance of the Hi-Lo chain, which Coy reaffirmed on Wednesday when pressed for the types of margins that the Mandeville store needed to maintain for viability and the types of revenues that the chain generates.

Before the closures, Hi-Lo was the second-largest grocery operation measured by stores in the chain, but it is now similar in size to SuperPlus, which is also said to operate 12 stores. Both operations pale in comparison to the Progressive Grocers of Jamaica consortium, whose members own about 32 stores combined, 13 of which operate under the Shoppers Fair brand.

Progressive itself is a group of individual supermarket owners, who pool together to buy stock for their grocery businesses and have some investments in common.

Coy said no other Hi-Lo stores are slated for closure or opening at this time, "but as previously stated, we are always looking for new opportunities to expand our branch network".

The chain currently has its eye on innovation and improving efficiencies, as a way to drive returns, under an ongoing $1-billion programme to refresh product lines, refurbish plants and redesign floor layouts. So far, the stores at Manor Park and Barbican in Kingston have been refurbished under the project.

"We continue to explore new technologies and implement processes to improve efficiency, thereby reducing costs," Coy said.

"Even more importantly, we focus on delivering consistently exceptional experience for our customers. Several initiatives have been implemented this year to provide our customers with great values, such as our GK Value Rewards programme and our 'Many Ways to Save at Hi-Lo' campaign," she said.