The lat­est su­per­mar­ket trends have re­vealed that trips to ma­jor es­tab­lish­ments are de­creas­ing as cus­tomers grav­i­tate to­wards the small shops, hop­ing for bet­ter deals.

This was re­vealed by Pres­i­dent of the Su­per­mar­ket As­so­ci­a­tion of T&T Ra­jiv Diptee who was speak­ing at the Busi­ness Out­look fo­rum 2023/2024 which was host­ed by the T&T Cham­ber of In­dus­try and Com­merce and held at the Hy­att Re­gency on Tues­day. The event was ti­tled The Fu­ture is Now-In­sights and Trends.

Speak­ing on the is­sue of re­tail and dis­tri­b­u­tion, Diptee said the month-end sales are still rel­a­tive­ly sta­ble for the av­er­age house­hold.

“What typ­i­cal­ly we would con­tin­ue to see is that in the third week of the month is the “thrust week” where buy­ers start com­ing in­to the store and we build a cer­tain lev­el of crit­i­cal mass in­to the month-end pe­ri­od. That has now fall­en off.

“What we are see­ing now is when peo­ple go through a month-end cy­cle they are trend­ing off now to­wards the small­er stores so that where they have to pick up a bas­ket of goods as op­posed to a trol­ley of goods they are grab­bing it at the small­er stores,” Diptee ex­plained. Ad­di­tion­al­ly, Diptee said con­sumers are dras­ti­cal­ly trend­ing to­wards val­ue cre­ation and val­ue re­al­i­sa­tion.

What does this mean?

Us­ing the ex­am­ple of soap, he said this item was pre­vi­ous­ly sold in mul­ti packs now they are sold singly.

“Con­sumers are look­ing for dis­counts. Brand loy­al­ty is a thing of the past be­cause con­sumers are trend­ing to­wards low­er priced brands.

“What this means for the world of dis­tri­b­u­tion is there is an onus on them to pro­vide this val­ue ei­ther in low­er pack­ag­ing sizes, in val­ue sizes, in dif­fer­ent port­fo­lios or in those dif­fer­ent cat­e­gories all to­geth­er.

“We are work­ing with a cat­e­go­ry of peo­ple or a class of peo­ple whose dis­pos­able in­come has not in­creased es­pe­cial­ly when you con­sid­er the met­ric of food price in­fla­tion,” Diptee em­pha­sised.

Ad­di­tion­al­ly, the val­ue of the gro­cery bas­ket al­so de­creas­ing.

Fo­cus­ing on re­tail, Diptee said this was still a frag­ile en­vi­ron­ment with es­ca­lat­ing en­vi­ron­men­tal costs due to in­creas­es in pack­ing costs among oth­er fac­tors as he not­ed that this coun­try im­ports 90 per cent of its food from North Amer­i­ca.

How­ev­er, de­spite these chal­lenges, he said the sec­tor is ex­plor­ing pos­si­ble so­lu­tions like us­ing re­new­ables in op­er­a­tions to keep the costs down.

‘Look out­side re­gion’

The man­u­fac­tur­ing di­vi­sion was al­so high­light­ed at the fo­rum as An­dre Jacelon, com­mer­cial gen­er­al man­ag­er, Bermudez Bis­cuit Com­pa­ny pro­vid­ed some in­sights.

In de­tail­ing some of the chal­lenges fac­ing the sec­tor he said e-com­merce for in­stance, has forced man­u­fac­tur­ers to change the way they do busi­ness.

“The con­sumer has be­come ac­cus­tomed to get­ting prod­ucts quick­ly, ef­fi­cient­ly with more va­ri­ety and in some cas­es at a cheap­er cost,” Jacelon ex­plained.

Sus­tain­abil­i­ty, he not­ed, was an­oth­er is­sue.

Ac­cord­ing to Jacelon, this is be­cause con­sumers have come more con­scious which means that man­u­fac­tur­ers have to be more aware of the in­puts of their prod­ucts such as biodegrad­able pack­ag­ing.

On the is­sue of sup­ply chain, he not­ed that while there are some im­prove­ments in this area, there still re­main some ob­sta­cles.

“For the man­u­fac­tur­ing process, it’s sev­er­al things hap­pen­ing at the same time. So you might have nine dif­fer­ent in­puts go­ing in and if one is miss­ing you can’t make it,” Jacelon ex­plained.

The peren­ni­al prob­lem of out­stand­ing VAT re­funds was al­so raised cou­pled with fi­nance and cash flow is­sues which man­u­fac­tur­ers cur­rent­ly face.

Ac­cord­ing to Jacelon, be­cause of the length and com­plex­i­ties of man­u­fac­tur­ing, the sec­tor prob­a­bly has the “biggest bur­den” in this re­gard.

“We would start our process by or­der­ing raw ma­te­r­i­al and the prod­uct may not reach to the re­tail­er for six, sev­en, eight (months) in some cas­es a year. So our mon­ey start­ed in mo­tion way be­fore the sale ac­tu­al­ly hap­pens. That does in­crease the de­mand for our work­ing cap­i­tal and in Trinidad we do have the added bur­den of VAT.

“We all know that some­times the gov­ern­ment takes its time and we have this VAT on the out­side that we have to fi­nance,” he fur­ther ex­plained.

On the is­sue of non-tar­iff bar­ri­ers, he said in some in­stances these would pro­mote in­ef­fi­cien­cies which the sec­tor is al­so forced to deal with.

“When you man­u­fac­ture you are look­ing at the economies of scale. The last thing you want to do is stop the line to change some­thing. So if you want to send some­thing to Cana­da, the la­belling re­quire­ments are dif­fer­ent than the US, than in Cen­tral Amer­i­ca and every time you have to man­u­fac­ture prod­ucts to them you will have to stop your line just to change a sim­ple pack­ag­ing. Some­times it is just a font size,” Jacelon ex­plained.

In paving the way for­ward, he said the lo­cal man­u­fac­tures, for the most part, have done a good job in mak­ing in­roads in­to the Caribbean mar­ket.

How­ev­er, this area is be­com­ing sat­u­rat­ed.

Jacelon ad­vised man­u­fac­tur­ers to now look out­side of the re­gion to con­duct busi­ness.

Not­ing that many man­u­fac­tur­ers are al­ready there he said the sec­tor on the whole will con­tin­ue to push to get out of the Cari­com re­gion.

Au­toma­tion al­so plays a role in the sec­tor’s fu­ture.

In this re­gard, he said there’s a move to­wards smart fac­to­ries which means that there is a lot more da­ta avail­able, en­abling busi­ness­es to be­come more adapt­able as sit­u­a­tions arise.

Al­so, aris­ing out of smart fac­to­ries would be ‘pre­dic­tive main­te­nance.’

“We have three types of main­te­nance right now. There is re­ac­tive main­te­nance that’s when the ma­chine breaks down. We have pre­ven­ta­tive main­te­nance which means the line has cer­tain cri­te­ria.

‘That doesn’t mean the part is fail­ing. It just means that you’re chang­ing it and you’re wast­ing mon­ey to a cer­tain ex­tent. The pre­dic­tive main­te­nance is where there are dif­fer­ent sen­sors along the lines and dif­fer­ent ways of mea­sur­ing and this would trig­ger a red flag so it’s a way of sav­ing mon­ey in the long run,” Jacelon said.

In the short and long term he added man­u­fac­tur­ers will con­tin­ue to grow as they con­tin­ue to strive to achieve dou­ble dig­its in ex­ports.