Newly installed president of the Supermarket Association of T&T (SATT) Rajiv Diptee says the sector will suffer significant negative impact from the retrenchment of Petrotrin workers. Hardest hit, he said, will be the supermarkets in south Trinidad.
“We are seeing the effects in San Fernando where there are a lot of downstream businesses related to the operations of the refinery. In addition to the people going home, there is also that ripple effect.
“When our customers are under threat our businesses feel the impact. If there are thousands of impoverished workers with less to in their pockets, sales will slow down,” he said.
Diptee is predicting a “painful transition” for the retrenched workers, with the effect felt by large numbers of people, even those not directly linked to the state-owned energy company, including the business community
“Remember south relies heavily on the oil wealth so we have to take stock of how this fall out will be managed,” he said
Diptee—who was elected to the top SATT post two weeks ago—is the managing director, PC Stop N Shop Supermarket in Siparia.
During his two-year term he will be in charge of an organisation with 280 members, including supermarket chains, retail food outlets and independent supermarkets. His main responsibility will be to assist members to run operate businesses as efficiently as possible and to lobby on their behalf in issues that affect the industry.
SATT’s line ministries include agriculture, trade and health.
An immediate concern for Diptee is how budget measures announced last Monday by Finance Minister Colm Imbert will affect supermarkets.
“The Finance Minister did say that inflation is at its lowest. That means we have to be responsible as an association to be stable in our prices in the face of diminishing returns and more taxes.”
Noting recently adjustment to the food card system, he congratulated the Government for increasing the social safety net for vulnerable citizens.
With the $100 in the value of the food cards, he explained, beneficiaries will be able to go to a supermarket “and there is a list of food items that are approved for use on the card. With an approved list of food items they can put together a basic food basket and swipe it at the cashier.”
Diptee also assured that the increase in the price of super gasoline will not affect the cost of food items.
“Diesel gas prices did not go up. We are very grateful for that,” he said.
“That is one of the primary modes of transport for deliveries. Unfortunately, there will be some sort of domino effect with the super gas even though the primary modes of transport use diesel. We now have to wait to see if our suppliers will flag any price increases. At this point we do not expect any price increases.”
High on the new SATT president’s wish list is seeing more locally produced goods on supermarket shelves, which will lead to lower food prices.
“As an association we have been holding discussions with some of the farming boards as we want to see more local produce on the shelves,” he said.
Diptee also urged consumers to plant kitchen gardens since that translates into savings.
According to Diptee, among the major challenges for the supermarket industry are diminishing margins.
“There have been incremental increases in the Business Levy, Green Fund, corporation taxes and National Insurance System (NIS) taxes. All these things have been incremental across the board,” he said.
In addition, consumers have been spending less.
“For the discretionary higher end products, the disposable income is missing. Everyone is prioritizing. Gas prices just rose, so people are spending more at the pump and may spend less at the store,” he said.
“That goes down to the operating costs of each store. Overheads, wages and salaries, transportation costs and utilities have gone up. We have had to absorb all those costs. That eats into our margins.
“We are in the business of volumes, we are in the business of one to three per cent markups. That is our margin, so if we have all these things creeping up, you can see where the erosion is taking place.”
Crime has also been hitting supermarkets hard. Diptee said pilfering is a massive issue.
“We have a lot more people on the breadline. We have a lot more unemployment. We have people who are desperate and people who are in crime. The deterrence is not there for pilferage. If we catch someone in our stores, the length of time it takes to process at the court, it does not equate to the nature of the crime.
“We have discussed it before…we would like to see a petty crime court to fast-track some of these cases. The people who commit these crimes know they can get away with it,” he said.
The rising cost of security has become burdensome because supermarkets have to pay for armed and unarmed guards.
“Security has become as essential for businesses as utility bills. We also need security cameras and we have to pay security for cash pick ups. These are all high cost items.”
Labour is another big challenge for the industry. Supermarkets have to compete for labour with government work programmes.
“The supermarket industry employs in the excess 20,000 people. To get labour is a massive problem. A lot of our workers come in and they do not have much education, they are under age 20. They take jobs as packers, baggage men, meat cutters and other positions. One of the challenges is training them and retaining them and getting them to the level of service required in the industry,” he said.
One of the ways SATT has been considering to address the problem is a training facility.
“We truly believe that if we certify the average employee it gives them added purpose. If they leave my business, I know that employee has standardised skills to work in another business. I would say by the third quarter of 2019 there will be a training facility. We already have the modules for training,” he said.