MNAs react to STC’s strategic closures |22 April 2021
With the announcement that the Seychelles Trading Company (STC) is closing its retail outlets with the exception of the hypermarket, many have been left concerned as to whether the strategic move will indeed be beneficial to consumers and achieve the objective of lowering the cost of living.
It was earlier this week that the wholesaler of basic commodities officially announced the closures and strategic direction for the company going forward, with the aim of lowering operational costs so as to pass on cost benefits to the local market.
In order to achieve this, STC proposes strengthening the partnership with retailers across Seychelles, introducing private label basic goods at more competitive prices, as well as having recommended retail prices (RRP) displayed on their goods for the benefit of consumers.
In view of the closures, STC has been working with the department of Employment, so as to assure that staff employed by the organisation are either absorbed in the company, and that others are retrained and placed in industries where there is demand.
With regard to staff on La Digue, chairperson of the STC board, Imtiaz Umarji, noted that they are more likely to be absorbed in other industries in the labour market.
However, given the state of the economy and situation with regard to employment, some are sceptical that these employees will end up jobless, with no avenues by which to provide for their families.
Member of the National Assembly Rocky Uranie, United Seychelles (US) representative for the inner islands, says the decision is disappointing, and one which places consumers on both La Digue and Praslin at a disadvantage as compared to their counterparts on Mahé, who can still access the hypermarket and goods at the price recommended by STC.
“In all honesty, I am disappointed and the La Digue community is very disappointed with the government’s decision. We do not have many shops and the STC outlet on La Digue is well frequented by both locals and tourists, as it offers a variety of goods at affordable prices that locals, tourists and businesses can have access to. It was the ideal choice, providing employment to many Seychellois and La Digue residents. The outlet was also helping to generate business for other businesses on La Digue including cargo boats operators and pick-ups that transport the goods to the island,” he said.
“I firmly believe that the government should have kept the outlets on La Digue and Praslin, as we already suffer from higher commodity prices on account of transportation costs. It is understandable to close the Mahé outlets but I feel that government could have absorbed the costs of running the two, so they need to reassess the decision,” Hon. Uranie stated.
Hon. Uranie is proposing that government review the decision and seek to find alternative options so as not to place citizens at a disadvantage. Among the options that government can consider are to offer subsidies to cargo operators towards lower prices, finding alternative options with lower rental costs and to review the service and operations on La Digue so as to concentrate efforts on providing basic commodities and only those which are beneficial and profit-generating for STC, rather than closing the outlet altogether.
With regard to the arrangements for employees from La Digue to be retrained to take up employment in other sectors, Hon. Uranie proposes that this could pose a problem as the majority of businessmen on La Digue are gravitating towards employing expatriate workers, on account that the local labour market lacks the skills and competences their businesses require.
“In general, job options are a rare commodity on La Digue and salaries are generally low on the island. How will these workers themselves fare? STC is suggesting that RRPs will serve to protect consumers but how will they ensure that shops will respect the RRP?” he queried.
“Lowering the cost of living is always on the agenda. We have always pushed for the government to provide subventions to cargo boats. Possibility of reviewing the structure of the outlet and the different products on which they are making losses, and maybe focus on those which do better, instead of leaving clients on La Digue and Praslin without much choice,” added Hon. Uranie.
The STC La Digue outlet is situated in Gregoire’s Complex and occupies a fairly large space.
Similarly, Baie St Anne, Praslin representative Hon. Churchill Gill is of the view that the closure will impact somewhat negatively on the people of Praslin, considering both the possible effects on the cost of living, and the employment situation on the island.
“The STC closure on Praslin is a very painful event for the residents, especially minimum wage citizens. STC proposes that the reason behind the closure of the outlets are due to high operating costs but what the decision fails to take into account is that high operating costs are not caused by customers. Rather, it is down to the management style, so when a business is faced with this challenge, it can be addressed in many different ways,” he said.
As with Hon. Uranie, Hon. Gill strongly feels that alternatives could have been considered to cater to residents earning minimum wage on the inner islands. Furthermore, as mentioned by Mr Umarji, STC’s new approach to buy directly from manufacturers, thus eliminating the need for middle men and further cutting down on the cost of importing such goods, should result in more competitive prices for STC, leaving room for other options to be considered, Hon. Gill added.
On the other hand, Hon. Wavel Woodcock, member of the National Assembly for Grand Anse Praslin, celebrates government’s decision and the strategic direction of the STC in moving forward, towards lowering the cost of living, and easing the financial burden on financially-disadvantaged citizens.
“The cost of operations is important consideration in all businesses and rent is one of the biggest challenges that the government is faced with financially. If operational costs are high, they have to be absorbed somewhere and this is reflected in the price of commodities, including essential commodities. Therefore, if STC can cut back on the hefty rent and operating costs, there are more opportunities for customers to enjoy the benefits. As long as the price of commodity lowers and STC sets the benchmark for other retailers to lower their prices, and consumers benefit, then it is okay”.
“Government has made a commitment to absorb the employees and we expect that the government delivers on the expectations,” Mr Woodcock stated.