PriceSmart Portmore for April, Caribbean sales hit new record
PriceSmart, which operates warehouse stores across the Caribbean and Latin America, plans to open a new store in three months, its second outlet in nearly two decades of operation in Jamaica.
“The company also plans to open a new warehouse club in Portmore, Jamaica, in April 2022. Once this new club is open, the company will operate 50 warehouse clubs,” said PriceSmart Inc CEO Sherry Bahrambeygui as the company released its earnings results showing record sales of US$1 billion for its Caribbean operations.
The Portmore store was reportedly set to open in September 2020 but was delayed to early 2022 due to the pandemic.
PriceSmart initially received planning approvals to build the second store in 2019, nearly two decades after its 2003 entry in Jamaica. Its current store, which is heavily trafficked, has operated from Red Hills Road, Kingston, since then.
“The Portmore, Jamaica club is progressing nicely. We believe Jamaica is a strong market for us and the sales generated out of our Kingston club have been historically record-setting for that location,” said Bahrambeygui on an earnings call on Friday.
PriceSmart previously stated that its Jamaica operations benefited from the overall growth in the wholesale and distribution trade. In summer 2018, PriceSmart expanded its operations at its single location on Red Hills Road to add a second floor for parking, reflecting increased business at the complex. The development sought to ease congestion at the superstore.
The company disaggregate sales by region, namely the Caribbean, United States, Central America and Colombia, but not the countries where a region has multiple markets. PriceSmart reported, for example, that the Caribbean less than a third of the US$3.6 billion in total revenues but two-thirds of the US$98 million profit, once the double-counting of inter-segment transactions is eliminated. However, Jamaica’s contribution to that performance was not disclosed.
Caribbean annual sales to August 2021 touched US$1 billion for the first time, up from US$994 million in 2020 and US$934 million in 2019. Caribbean profit totalled US$61 million in 2021, bettering the S$50.5 million out-turn in 2020 and US$44 million in 2019.
PriceSmart is a retailer of grocery items, housewares and electronic items. It refers to itself as a chain of warehouse ‘clubs’ located in 13 countries, whose customers must pay for membership in order to shop. Its current geographical distribution of stores comprise nine in Colombia; eight in Costa Rica; seven in Panama; five in the Dominican Republic and Guatemala, four in Trinidad; three in Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, US Virgin Islands and Jamaica.
During PriceSmart’s 2021 financial year, its Caribbean segment suffered challenges including reduced disposable income, especially in tourism-dependent countries including Barbados and Jamaica, currency conversion issues in Trinidad & Tobago, and some 15 per cent currency depreciation in the Dominican Republic.
The company noticed, however, that “members stockpiled” items in anticipation of new waves of COVID-19 outbreaks which benefited its sales. Consequently, PriceSmart increased its inventory to US$390 million at year end August 2021, compared to US$310 million the previous year.
For the first quarter ending November 2021, PriceSmart sales were described as “stellar” by Bahrambeygui. Total revenues increased 11 per cent to US$975 million, up from US$877 million in the comparable period of the prior year. It earned US$30.5 million in profit, up from US$27.8 million.
“We continue to augment the benefits of our membership, including our wellness initiatives in areas of optical, pharmacy and, most recently, audiology services,” said Bahrambeygui. “Our investments in technology and our omni-channel initiatives have enabled us to further expand services, membership benefits, and convenience for our members, allowing them to shop safely and enhancing the quality of their shopping experiences,” the CEO said.
PriceSmart also upgraded its analytics capabilities to better inform its purchases and restocking decisions.