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November 14, 2009

Chen responds

Sunday Observer writer Erica Virtue sought and got a response from Wayne Chen, chief executive officer of Super Plus Food Stores, to Chevelle Duhaney’s Question of the Week two Sundays ago: Why have you closed down so many branches of the Super Plus Food Stores? He also graciously opted to answer the other three questions posed by our readers.

1. Why have you closed down so many branches of the Super Plus Food Stores?

Super Plus came together in 1992 from the merger of five supermarkets in central Jamaica owned by members of my family. The business grew rapidly, especially in the last 10 years, focusing on low prices, one-stop convenience, and friendly service.

At its peak, Super Plus had 28 supermarkets, seven wholesales, two home stores, a dozen convenience stores, and online shopping. At that time, in 2006, we directly employed more than 2,200 Jamaicans and procured goods from more than 400 local suppliers. During the same period, the group acquired and developed significant real estate assets for current and future expansion.

We had grown from a small rural group into Jamaica’s largest-ever retailer. At the same time, we raised standards in the grocery business by continuously training and developing our employees and focusing on food safety and regulatory compliance, and being a good corporate citizen.

We realised that the organisation would need to be reorganised to increase efficiency and more cash and credit to keep pace with the daily demands of the business.

In 2006 we began a restructuring exercise to reduce expenses and focus on the most profitable business lines. We started by closing the wholesale outlets because the margins and profits were too low, given the operational risks and the demands on management. At the same time, we started to sell off non-core real estate assets to raise cash.

In the last year, we had to step up the pace of restructuring as we were hit by four issues simultaneously:

. the fall in our customers’ purchasing power;

. the high cost of borrowing;

. the rolling back of supplier credit; and

. the fall in value and demand for real estate.

These created significant challenges to our restructuring, and forced us to cut more deeply than we had originally planned.

We have sold or closed several supermarkets, but you should note that the only one that will not reopen is the Oasis Plaza store in Spanish Town. All the rest have been sold to supermarket operators and are either in operation, or will soon reopen.

It should also be noted that most of our former employees and virtually all the managers and supervisors have been rehired. It is significant to note that today Super Plus still operates 13 supermarkets that employ more than 600 people.

2. Would you consider the closure of some of the Super Plus Food Stores a failure on your part?

There is no doubt that in recent times Super Plus has suffered a setback. However, I am confident that we are putting the business on the right track for sustainability and future growth.

If success or failure is judged not by size, but by what has been achieved, I would propose that we take into account Super Plus’s contribution to the development of a dynamic and competitive retail sector, its support of many Jamaican farmers and manufacturers, and its active development of many individuals, communities and organisations.

Importantly, Super Plus has been a good corporate citizen and has been in the forefront of corporate social responsibility over the past two decades, on a scale and breadth matched by very few Jamaican companies.

I must express my personal disappointment in not being able to keep all the stores and team members as a part of the Super Plus family. I will also miss the many customers and other stakeholders that I had developed close relationships with over the years.

3. Are you interested in becoming a politician, and what role would you play?

Politics is really a form of public service, and my six years, from 1995 to 2001, as an active politician came out of my long-standing commitment to serve Jamaica by contributing to its development.

Today, I am no longer a politician but am still very engaged in public service in several areas including land titling, urban development and the arts. I have never shied away from serving or speaking out, even at personal cost, on issues that I consider important for Jamaicans, especially those less fortunate than myself.

Jamaica has many challenges and needs many hands on deck. We are all very good at talking but shy away from the sacrifice and hard work that are required to put talk into action. I would urge those of us who have education, skills, or wealth to get off our verandahs and get involved.

4. How would you address the rumours that employees of Super Plus Food Stores are not well treated by the management?

I am sure that there are some team members who feel from time to time that they have not been treated well, and where we find instances of this we move quickly to address it. The issue of mutual respect is one that we take very seriously and it is a fundamental element of our training and management.

The retail grocery business is a tough, stressful, unglamorous one – with few “white-collar” jobs – and not every team member see it as their dream career. The task of keeping team morale and productivity high is a challenging one, and conflicts will arise on occasion. We have invested significant time and effort in ensuring that these are kept to a minimum.

It is important to note that Super Plus has brought new levels of training and HRD practices to the retail sector.

We have invested millions of dollars in training, not just in work skills for use in the business but also in team members’ personal development.

Most of our managers have been sent overseas for training to expose them to international best practices. In fact, since it was founded in 2001, the Chicago-based Independent Grocers Alliance (IGA) Institute, has had more enrollees from Super Plus than any other supermarket group in the world.

Today, the cadre of store managers are mostly men and women who have worked their way from the bottom up through the ranks, and typically have been with Super Plus for over 15 years, so they bring experience and empathy to their jobs.

We are still committed to our mission of being “Jamaica’s favourite supermarket” for our customers, stakeholders, and team members and know that it’s just a matter of time before we are back on top.

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