Tuesday, March 21, 2023
By YOURI KEMP
Tribune Business Reporter
FOOD retailers are eagerly anticipating next month’s end to the expanded price control regime as several smaller operators were yesterday said to be on the brink of closure.
Philip Beneby, president of the Retail Grocers Association (RGA), which represents more than 130 food store operators, told Tribune Business it was possible that several ‘Mom and Pop’ food stores may shut their doors after the expanded price control regime imposed a further squeeze on already-thin margins and profits.
Speaking after Consumer Protection Commission officials said that ‘Mom and Pop’ food stores are the more frequent price control violators, Mr Beneby said he “does not have a clue what the CPC is talking about”. He added of the smaller food stores: “You may even see more of them in the same position [of closing], so it’s just a matter of time. Everybody’s waiting for April.”
The expanded price controls regime for pharmacies ended on January 17, but food retailers have to wait until April to see if their equivalent will expire and the Government allows margins and mark-ups to return to October 2022 levels.
The Retail Grocers Association, in a previous statement, said the price control expansion will “affect more than 5,000 items to which inventory and price adjustments would have to be made. To facilitate such changes would be a very expensive undertaking, and would mean that 40 to 60 percent percent of total revenues for local wholesalers and retailers would be controlled.
“Additionally, such a decision was made without prior industry consultation and at a time when businesses are faced with already slim profit margins, increasing electricity costs, increased operating expenses and theft. The sector employs some 4,000 persons, and the expansion of the price control basket will undoubtedly have a ripple effect which would prove detrimental, with mass store closures, particularly among the smaller food stores and the real potential for food shortage in the country.”
Food wholesale margins, or mark-ups, were capped at 15 percent for all 38 product line items listed, while those for retailers are set at 25 percent across-the-board. Those goods impacted, some of which are already price controlled, are baby cereal, food and formula; broths, canned fish; condensed milk; powdered detergent; mustard; soap; soup; fresh milk; sugar; canned spaghetti; canned pigeon peas (cooked); peanut butter; ketchup; cream of wheat; oatmeal and corn flakes.
The remainder are macaroni and cheese mix; pampers; feminine napkins; eggs; bread; chicken; turkey; pork; sandwich meat; oranges; apples; bananas; limes; tomatoes; iceberg lettuce; broccoli; carrots; potatoes; yellow onions; and green bell peppers.
Mr Beneby said he has to continue to monitor the situation for his members. He added: “Time will tell, and you will see what happens over a period of time and it wouldn’t be overnight. I haven’t been notified by my members that warnings have been issued to them by the CPC. I wouldn’t say there is an uptick in inspectors in the stores either; they have been doing routine price checks. They are allowed to come into the stores and do their price checks.”