Susan Gordon, Business Reporter

A stocker lays out items in the background while shoppers browse the shelf at the Super Plus Fairview supermarket in Montego Bay in this July 2005 photo. - FILE

Progressive Group, a Kingston consortium of supermarket owners, has opened a new 20,000-square-foot branch outside the capital under the Shopper's Fair brand, setting itself up to grab more of the multibillion-dollar grocery market.

The new store, the 23rd in the group, opened just under two weeks ago at Eltham Parkway in Spanish Town, St. Catherine, is operated from property leased from developers of the Oasis Plaza, Frederick Moe and Edward Azan, Progressive's Managing Director Sim Slung Chin told the Financial Gleaner.

The supermarket sits beside the Total gas station on the edge of the Old Capital.

A 24th store, another Shopper's Fair of 24,000 square feet, is to be opened in four months on Brunswick Road in Savanna-la-Mar, Westmoreland.

Chin, who is also the owner of the Super Valu chain, said construction had already begun on the Westmoreland store, but refused to discuss the size of the investments.

The two new operations, however, will take the group within a 5-6 store striking distance of rival Super Plus whose islandwide network now comprises 29 stores.

Owned by the Chen family of Mandeville, Super Plus lays claim to about 40 per cent of the grocery market, with annual sales, said managing director Richard Chen, of $11 billion to $12 billion.

Cutback for Hi-Lo

On those numbers, the local grocery trade would be valued at $27 billion to $30 billion.

The next two largest players are Progressive and the GraceKennedy-owned Hi-Lo Food Stores, whose network spans 13 stores, down from 15. Hi-Lo Managing Director Andrea Coy refused comment on the supermarket chain's market share, but its sales a year ago were an estimated $4 billion, which would give it a 13-15 per cent slice.

"We are not planning to contract any further," she told the Financial Gleaner, "but continue to look outside and survey other areas where the market is underserved."

MegaMart's owner Gassan Azan is also developing a third store in Montego Bay. (See story on Page 1).

The Progressive group comprises chains Brooklyn and Lenn Happ (Albert Dockey Lym), John R. Wong (Len Loshusan), Super Valu (Chin) and Loshusan and Sovereign (Glady Loshusan) - individually operated by the four main players in consortium - and Shopper's Fair which is cooperatively owned by the group, including the Westmoreland store.

"We rented the shell of the building and we are outfitting it because it came with no flooring, no windows no doors no bathroom," said Chin, explaining the March date to open for business.

The group, he said, would not be averse to eventually purchasing the store but only if the right offer was made.

Shopper's Fair Savanna-la-Mar will employ 80 workers. Chin claims it will not compete directly with the D&Y store in Savanna-la-Mar, saying both are on opposite sides of the seaside town.

D&Y is also part of the Progressive Group.

Dominant player

Super Plus is also in expansion mode and, according to chief executive officer Wayne Chen, will open a 30th store in three weeks in leased space on March Pen Road, Spanish Town.

The company refused comment on the size of the investment, but Richard Chen said a typical Super Plus store represents about $100 million of capital. The March Pen store will also employ 80.

Progressive does not discuss figures, so it's unclear what market position it holds. But Wayne Chen was insistent that his chain, which employs about 2,000, was the dominant player.

"They are not ahead of Super Plus," he said in response to suggestions that Progressive appeared poised to take pole position.

The two players are currently revamping their inventory systems for faster turnover of stock, with Progressive whose members buy in bulk, shooting for an approximate 30-day turnaround on movement of goods out of inventory, onto the shelves and into grocery carts; while Super Plus is on a 21-day cycle.

Overstocking

"Typically we carry at any given time about three weeks worth of inventory," said managing director Richard Chen.

Chin said the most desirable target for inventory control is to have the item purchased within for the stores turn around 12-14 times per year, which translates to 24-30 days or four weeks.

But, he added, there are times when grocers deliberately overstock saying there is often uncertainty that import shipments will arrive at stipulated times.

Nonetheless, he suggested the Progressive group had become adept at recognising when supplies need replenishing.

"We've always kept a tight management system where the four partners run the supermarket without a consultant," he said, taking a jab at a market rival, whom he did not name.

Hi-Lo's Coy said the chain's target is always to have at least 95 per cent stock at all times, which it tracks using a computerised inventory system.

She said the chain has been improving its variety and product range in keeping with customer demand.

As is traditional, Hi-Lo anticipates strong sales in the Christmas season. But Super Plus' Wayne/Richard Chen said he expected business "to be about the same" as last year's yuletide season, while Progressive's Chin had an even more depressing outlook, saying they had no strong expectations as the supermarkets' bills kept increasing and had to be paid.

susan.smith@gleanerjm.com