STC to discontinue retail outlets |20 April 2021
• Strengthen partnership with retailers towards lowering cost of living
Amid the coronavirus pandemic and the uncertainty that continues to linger around the business and economic sector, the Seychelles Trading Company (STC) is actively pursuing its goal to create and establish the best possible trading environment to further benefit its customers as well as retailers.
During a press conference held yesterday afternoon at the STC conference centre, a panel comprising chairman of the STC board Imtiaz Umarji, chief executive Christine Joubert and deputy chief executive David Jean-Baptiste, explained that the importer has decided to go back to its priority of being a wholesale distributor, concentrating its efforts on sourcing out essential as well as semi essential products at very affordable prices, for the distribution to local retailers in the country, hence bringing down the cost of living to consumers at all district level.
The strategic move will see the discontinuity in STC’s retail operations, namely, STC Victoria supermarket at Orion Mall, STC Grand Anse supermarket on Mahé, STC Grand Anse supermarket on Praslin and STC supermarket on La Digue, to concentrate on wholesale.
“We need to consider the cost of our operations. There are 27 districts across Seychelles and there were only those four outlets. The other districts were not covered by STC outlets. But when we consider our losses, our losses were colossal. At the Victoria supermarket we are talking around R200,000, Praslin and La Digue as well, conjointly, around R200,000 every month. Added together that is R400,000 and within a year, it is just under R5 million. Someone needs to pay for this, which is what causes the cost of living to rise, as we are spending too much on our operating costs. We have to add this onto the commodity. But now, if the retailers already have the facility, why do we need to reinvent it?” Mr Umarji said.
“We need to make STC more efficient, if we don’t the cost of living will not go down. We can work with them, so they win, consumers win, and STC wins,” Mr Umarji stated.
In order to effectively deliver on its mandate to offer basic quality goods at affordable prices to all Seychellois homes, STC has commenced the process to introduce own-brands or private labels across the 14 basic goods that it imports, in addition to cutting out middle-men to purchase directly from manufacturers, towards further cost-savings.
Sourcing out affordable products is but one component of the formula, as STC is also working closely with the Retailers Association of Seychelles, offering better incentives to get retailers onboard with the consolidated national efforts to lower the cost of living.
“As we said, we will source products at a better price, for STC to be able to distribute it to retailers. Our role in keeping the products affordable is moving towards private label products. We have started this with oil and we will have private labels for our essential products, whereby we will have the STC logo and will be labelled as ‘Packed for STC’. On the label will also be the recommended retail price (RRP), but despite the inclusion of the RRP, as we do not have a price control system, we cannot impose on retailers to sell the product at the stated price, but it serves to educate our customers as to how much the product should be sold,” Ms Joubert explained.
For the present time, STC will be introducing private-labels on their dried packaged goods range, including rice, sugar and lentils, as well as oil, although it eventually plans to do the same for perishables such as fruits and vegetables.
Retailers can expect better delivery services, further lowering operating costs, in the hopes that cost benefits will be passed on to consumers. Additionally, both sides have come to an agreement in relation to profit margins, agreeing that retailers will benefit from between 5 percent to 15 percent profit margins on most basic goods, and even up to 20 percent for others when setting the Recommended Retail Price (RRP). Currently, retailers face fairly minimal profit margins, on account of the foreign exchange rate and substantial losses recorded by STC, especially over recent months.
Chairperson of the Retailers Association, Kannusamy Naidu, clarified that most retailers offer basic goods imported by STC at the RRP already, and is therefore confident that at least 300 members of the association from the 400 grocery shops in Seychelles will observe the RRP.
“The Retailers Association remains committed towards helping to lower the price of commodities. We have agreed with STC, a profit percentage that we feel is reasonable. Therefore, if the recommended RRP is reasonable, our members will definitely abide by the price,” Mr Naidu noted.
Considering the central role that retailers are to play and that the wholesaler will only be concentrating on importation of basic goods, only the STC Hypermarket will remain open of the retail outlets, although there are plans in the pipeline to also modify the facility for the supermarket to occupy less floor space.
STC is also investing towards making the facility more efficient, maximising space and introducing more shops, some of which are expected to be operational as from June, with the launch of the Food Court project towards May end.
Going forward, the wholesaler is also looking to invest in infrastructure, a major challenge for the company, negatively impacting on the quality of the products, most superficially perishables such as onions and potatoes, supplied to the market.
“Another challenge we have is infrastructure as STC is unfortunately not in a good state. Our chiller cold store is not up to par. As I understand, if potatoes are stored well without breaking the cold chain, it can remain for up to one year, but we do not have such facilities, which is why some of the products are like that. But we are looking into investing in it towards food security and quality,” Mr Umarji noted.
With the closure of the retail stores, staff from the Mahé and Praslin facilities will be absorbed in the continuous operation of the STC Hypermarket, bakery, factory and our wholesale outlets on both Mahé and Praslin. The management has also ensured to provide the best possible support for all La Digue staff who might not have the opportunity to be redeployed in other STC services. STC will be working closely with the department of Employment to ensure that these staff secure employment.
Also on the panel for yesterday’s conference were; corporate affairs general manager at STC Dorina Matombe, Retailers Association representative Ramesh Pillay, member of the Seychelles Chamber of Commerce and Industry (SCCI) Pierre Quatre and STC board member Jamshed Pardiwalla.