Super Value owner Rupert Roberts said yesterday the grocery store chain stocked its warehouses with long-dated items to help lock in lower prices for as long as it could, but won’t be able to hold off on higher prices when those items run out in a few months.
Roberts expects inflation will rise into 2023.
“Nassau people have no reason to complain about inflation,” said Roberts, noting that on Family Islands, residents face even higher prices.
“This country hasn’t really seen inflation and we won’t see the inflation for about six months.
“We have six to 10 months’ supply of [cooking] oil at the former prices.
“We have about a year’s supply of corned beef … so, we don’t have to raise the prices [anymore] until we buy [again]. Bahamians don’t know, we’ve really protected them from [even higher] inflation.”
Roberts said Super Value has been able to get a large supply of the items that represent 80 percent of sales, but it obviously cannot buy certain items and hold them in stock for long.
“We can only warehouse long dates,” he explained.
“We can’t warehouse cereals [and other items] that take to bugs in the summer heat. Those bugs germinate from within.
“We have ample supply of 20 percent of the items that represent 80 percent of the sales but, unfortunately, rice, flour and those kinds of delicate items are not considered in that, but the hard goods, we’re protected for at least six months.
“Now, when we buy after Christmas and start paying the price, you’re going to see the real inflation.”
Roberts said Super Value buyers spend almost all their time trying to source goods at the cheapest prices they can find in various markets.
“We bought every possible brand of cooking oil we could buy when we suspected everything was going to skyrocket,” he said.
“When the scare started, we bought all that we could hold in the warehouse at the low price.”
He added, “We will be running out of the commodities that we bought at the old lower price, so we will have to pay the market price, whatever inflation is in January.”
Roberts also said that more people are shopping on Sundays than three years ago to take advantage of the double stamps, which can be converted into cash value — a likely sign that more consumers are finding it hard to pay the higher prices.
He noted that given that inflation is imported, there is only so much supermarkets and the government can do to keep inflation down.
Roberts suggested that consumers be more flexible in the brands they purchase. He said brand loyalty leads many to buy at higher costs when lesser known brands are of the same quality.
Providing advice to consumers, he said, “I would buy the lowest brand that we have in the store, and some of them are significantly lower. Those brands are just as good, but their grandmother used Wesson oil and they’re going to use Wesson oil.
“These national brands, a big part of the budget is advertising; you get the word out.”
As such, many people gravitate to those higher cost brands, he said.
In recent months, costs have continued to climb.
The war in Ukraine has triggered higher food prices globally, as Russian ships have blocked Ukraine exports of popular agriculture commodities like wheat, corn and coarse grains.
The price spikes and supply chain disruptions have been extensive.
Supply chain issues caused by the COVID-19 pandemic had already created significant challenges for many markets.
Bird flu, which has killed millions of chickens in North America and Europe, means that the cost of eggs has gone through the roof.
Roberts said there is no end in sight to those price rises.
“The government had 30 percent duty on [eggs] and they took it off and made it 10, and about that time the bird flu hit and we didn’t get the advantage of that, so what’s going to happen is eggs are going to get so few and they’re going to go up and up and up until I don’t know where it’s going,” he said.
“When it goes to $10, I don’t think you’re going to buy eggs, but the people [who] want them are still buying them and it’s such a supply and demand thing and I don’t know where it’s going to go — [perhaps] into infinity; nobody knows where it’s going to go.
“The more serious this problem gets, the shortage of eggs and the demand [are] going to put the price to — I can’t predict what’s going to happen.”
Roberts gave a “wild guess” that over the last three years, there has been an across-the-board increase in grocery prices of 20 percent.
Last week, Central Bank Governor John Rolle said inflation is expected to increase even more in the near term.
“What I think we also need to appreciate, as has been said on several occasions, is that this is inflation that is being imported by The Bahamas, so it isn’t something that we should expect a significant or much ability at all on the Bahamian side in terms of influencing the rate that’s coming through,” Rolle said.
The government, too, has said it has very limited control over inflation, though Prime Minister Philip Davis said last week the government is examining measures to help ease the burden.
In his budget communication in May, Davis, who is also minister of finance, announced the reduction of customs duty on a “significant number” of food items to bring relief to citizens and residents.
The government in January also reduced value-added tax (VAT) from 12 percent to 10 percent, but the previously VAT-free breadbasket items now attract 10 percent VAT, something the government has been heavily criticized over.
Roberts himself previously called on the government to remove VAT off breadbasket foods to ease the burden of inflation.
But he told The Nassau Guardian yesterday the customs duty reductions “equalized” the VAT increase.
“The reductions in customs duty and the reduction [in VAT from 12 percent to 10 percent] across the board, I think that equalizes things, so I even checked our VAT returns on the same [amount of] sales [as we paid last year] and they are about the same, so I’m satisfied that the increase of VAT on breadbasket items was eliminated by [other moves] that were made,” Roberts said.
He added, “It sort of proves that it evened out; otherwise, the government would be getting more but they’re not.”
Despite his prediction that food prices will remain elevated and even move higher into 2023, Roberts said, “We hope for a better year next year.”
The Nassau Guardian pointed out to him that for many, a trip to the grocery store has become a painful experience.
“That hurts us because when you walk in, we want to create a soft, warm feeling, and that can’t happen,” Roberts responded.