GK devises plan to reinvigorate Hi-Lo chain
Published:Wednesday | February 1, 2012 | 12:00 AM
Sabrina Gordon, Business Reporter
The GraceKennedy-owned Hilo Food Store chain will close its Savanna-la-Mar branch at the end of this month, citing profitability issues, and is working on a plan to bring other underperforming stores up to par.
"We will be closing the Savanna-la-Mar store because it is not profitable. We did a review in quarter three of last year and from that we have taken the decision," said Michael Ranglin, chief executive officer of GK Foods.
"We think our efforts would be better spent concentrating on other stores," he said.
The store has been operating for six years. The closure cuts the chain of supermarkets to 14 stores nationwide.
"There are stores that are doing well, others mediocre and not so bad," said Ranglin. "Those we will be working on to bring up the revenue."
The 15 persons employed at Savanna-la-Mar will be transferred to other Hi-Lo stores.
Hi-Lo Food Stores was incorporated in Jamaica in 1954, but was acquired by GraceKennedy Limited in 1984. It operates as a division of GK Foods.
Two years ago, the supermarket chain closed its Liguanea store, leaving five stores in Kingston at Cross Roads, Half-Way Tree, Barbican, Manor Park and the University of the West Indies, Mona campus. Outside the capital, there are two stores each in Montego Bay and Negril, and one store each in Port Maria, Ocho Rios, Mandeville, Spanish Town and Portmore.
The Portmore store opened in December 2010, after investments of J$94 million, to become the second-largest operation in the Hi-Lo chain.
The store is not doing as well as expected, but Ranglin said it is showing steady improvement.
"It still has some way to go, but is coming up and doing better," he told Wednesday Business.
The plan for the chain includes more aggressive marketing and promotion, improvement of product lines, and better ways to serve customers.
"Some stores don't have the right fit, look and feel. We will be working on that, as well as promotions and building activity in stores, while also working with our suppliers," Ranglin said.
GK Foods is projecting 10 per cent growth in revenue across the 14 Hi-Lo stores this year, but admits the target may be too optimistic .
"Given the environment we are in now, it could be a stretch, but we are optimistic. We know what we have to do, and we are going to do it," said Ranglin.