EFresh looks to supermarkets for improved profit margins
Published:Friday | November 1, 2024 | 12:10 AM
Imported food supplier Everything Fresh Limited says a greater percentage of its profits in the immediate future will likely come from sales to supermarket chains rather than supplies to hotels, which make up most of the company’s revenue.
The company registered a $100-million net profit in 2023, but its profit for the first six months of 2024 is down, relative to the corresponding period last year, because of rising operating costs and the flattening of demand from the hospitality sector.
EFresh Chairman Gregory Pullen said the profit margins from sales to the retail trade are higher than to sales to hotels, and that sales to hotels have flattened somewhat this year.
“Although the hotel business is substantial and still represents the majority of our sales, the margins on the other side (retail) are greater than on the hotel side,” Pullen told the Financial Gleaner after the company’s annual general meeting in Kingston on Tuesday.
Pullen noted that there has been much activity in the retail food sector recently, citing a new supermarket called NLA Country Store opening in Negril, Hi-Lo upgrading its Negril operations, and members of the Progressive Group opening new stores.
In 2023, the earnings of EFresh group, which includes 80 per cent of Everything Fresh Bahamas, grew by 109 per cent, and was its highest net profit since listing on the Jamaica Stock Exchange in 2018.
Annual revenue rose to $3.17 billion, which was 20 per cent above the previous year’s sales of $2.64 billion.
“This was as a result of our forward planning to ensure that the adequate stock was on hand to handle Jamaica’s strongest tourist season ever recorded, with a 16 per cent growth in visitor stopovers over the previous year,” the company said.
However, net profit at half-year ending June 2024 was down, from $78.1 million to $43.1 million.
Expenses rose in the period, but EFresh said the additional expenditure was in areas that bolstered the capacity of the group to facilitate future growth in revenue.
“These areas include a rise in employee costs, as additional staff were recruited in 2024 for warehousing, purchasing, merchandising and transportation, as well as some major one-off truck repairs,” Efresh said.
“The company began operating its Bog Walk distribution warehouse (in St Catherine) at the end of the first quarter of 2023. The costs for that location has risen significantly as it was in full operation throughout the first half of 2024, compared to being underutilised for most of the first quarter of 2023,” it added.
EFresh trades in dairy products, assorted dry and canned goods, fruits, vegetables, seafood and deli meats, which are mainly supplied to companies in the hospitality and food sectors.