Saturday 11 July, 2020

Massy Stores SLU responds to price gouging concerns

Massy Stores (SLU) has responded to concerns it has received from customers surrounding price increases.

"In the last few months and more so in recent weeks, we have received feedback from customers expressing their dissatisfaction over general price increases at the supermarkets.

The tone of the feedback from letters received and messages placed on social media point to a high degree of concern and frustration over this matter.

We acknowledge that there have been price increases on many products. While some of the issues related to pricing predate our COVID-19 experience, factors linked to the pandemic have further exacerbated those increases.

We wish to advise that there are two main direct factors driving price increases:

  • Supplier price increases brought on by recent unprecedented global demand, in addition to factors affecting the production capability of manufacturers. Those factors are heavily affecting food supply chains across the globe and no geographic space has been spared. A simple search of global supermarket price increases would provide some insight into this situation
  • The implementation of the Article 164 trade regime in January, pre-COVID, which saw certain categories of products imported into St. Lucia (from outside the OECS and Belize) attracting duties as high as 100%. The implementation of Article 164, on its own, caused unprecedented price increases and when subsequent increases by suppliers due to COVID-19 are added to this, the price impact is nothing short of extreme.

From the onset of the global pandemic, we have been very mindful of the effect that the extraordinary demand for a number of products was having on the global supply chain. 

In a press release dated March 16, the company advised that there could be some price increases in the future given the supply chain challenges.  

Over the last few months, our purchasing executives have and continue to work very closely with suppliers to keep prices as competitive as possible.  This, in the face of mounting challenges across various product categories, some of which are basic and essential items.

Given the scale of the coronavirus crisis and the rate at which it has evolved, maintaining a steady food supply chain has its own share of challenges.

A critical focus for us has been to do all we can so that no matter what, there is sufficient food in the country and on the supermarket shelves.

We have had to identify the items that are critical to the food supply and negotiate actively to try to secure reasonable commitments from suppliers.

We have also developed relationships with new suppliers where existing suppliers were or suspected of being unable to meet demand. Further, we have strengthened our relationship with local manufacturers, distributors and farmers to ensure buffer stock to manage potential shortages.

While these efforts have resulted in some gains, the reality is that, worldwide, the cost of groceries continues to rise sharply.

In the last three months, we have received formal notification of price increases from over twenty of our major suppliers covering the breakfast, snack, juice, milk, fresh and processed meats, vegetables, pet food, household, haircare and beauty categories.

Some of these increases have already taken effect and others are imminent. Suppliers have cited various reasons for increases including production and raw material costs, compounded by increases in inland freight costs in some instances.  

Added to that, fears and scarcity caused by COVID-19 have resulted in a lot of uncertainty about supply, availability and logistics.

This has forced us to be proactive and forward buy, in some cases, at higher prices than what traditionally obtained pre-COVID-19.  

In general, Massy Stores has felt the adverse impact of absorbing a large number of increases at great cost to the organization and in the instances where these increased costs could not be fully absorbed; we have had no choice but to pass on the increases.

With the introduction of the Article 164 trade regime in January of this year, the cost of flour, pastas, curry powders and aerated waters imported from outside of the OECS and Belize have increased significantly.  

The significant price increases are due to changes in the tariff and duties paid on these products. The duties on the products that fall in those categories increased, from an average of 20% - 25%, to, in all instances, 70 or 100%.

The increased duties under Article 164 are part of government regulations to support local manufacturers; however, the effects of such increases are out of the company’s control.

Recognizing that hundreds of items within the store fall under the four categories mentioned, and despite the significant increase in the landed costs of the items, Massy Stores has made every effort to minimise the extent of the price increases wherever it is reasonably possible to do so.

At this time, it is important to advise customers that the prices of locally manufactured items would not have changed as substantially and this is an opportune time to further support local producers and manage the cost of grocery shopping

We wish to reiterate that we are not engaged in any form of price gouging or unfair trade practices, as this is not in keeping with the company’s values. 

Although we have incurred significant increases in operational costs inclusive of port charges, security, cleaning and sanitation and transportation, among others, we have not allowed these to affect our product pricing.

We remain fully committed to ensuring that we maintain an adequate supply of food for our nation, and that good quality, wholesome food products are available to customers at fair market prices.

The company’s promotions and specials have continued as a means of giving customers options to save money on their grocery. Later this week, some additional price reduction, discounts and bargain offers will be rolled out to ensure there are relevant and exciting consumer-valued offers at the stores.

We take our role as market leaders quite seriously and have spared no effort to lead by example during the peak of the COVID crisis.

In that regard, we acknowledge the unwavering commitment of our team members to exceptional levels of service during what is no doubt a most difficult time in the history of the world.

Our support to agencies like the Salvation Army, and a range of other charitable and service-based organizations will continue, to help bring much-needed relief to many of the island’s underserved communities.

Along with our staff of over 1300 persons (who are also customers), we will continue to serve St Lucian families with the best of standards guided by our values. We simply ask that you judge us fairly.

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