The end of year shopping season traditionally sees a boost in income for retailers as shoppers make good on granting Christmas and New Year’s wishes.

This year, leading retailers in Jamaica had to contend with the ongoing recession and the threat of a worsening crisis following the announcement of a new tax package.

However indications suggest that at least some retailers managed to weather the worst of the storm as shoppers took the opportunity to enjoy the holidays.

Gassan Azan, who operates two major retail chains MegaMart and Bashco, says the companies fared well through the crisis with a combination of savvy marketing and repositioning.

Christmas is a period a time when Jamaicans re-furnish their homes, buying large appliances like refrigerators and cookers from retailers such as Bashco and Courts. The season therefore is usually replete with advertisements from retailers about attractive deals and extended credit terms. This year was no different, but Azan, recognizing the challenges of the past year, took a different approach.

“I think Bashco held up fairly well considering the present harsh climate. We’ve done some creative marketing and that has brought a lot of people into the store that prior to this would not have gone into a Bashco store.”There was this feel good sentiment,” he explained.

The creative marketing initiative saw television personality Denise Hunt and comedienne Elva on a shopping spree at Bascho. The humourous duo introduced potential shoppers to the reduced prices and ‘great deals’ offered by the store. The strategy apparently worked.

“What we found was a lot of traffic but spending power is a lot less than it has been in past years,” he told Caribbean Business Report . “There was a lot of spending, but not heavy spending.”

“People are definitely cutting back. I don’t know if it is because of the tax package that was announced. There is still some level of uncertainty, people just don’t have the money,” said the Megamart and Bashco boss.

Food spending up

Azan says the nature of the purchases have changed as well. “It has been mostly food. There was not a lot of large appliances, it was food and the basic necessities as opposed to furniture,” he added.

Azan noted there were increased sales in smaller appliances with an evident fall off in the sale of the larger ones. “So while more people shopped, the income was probably down 17 per cent on last year,” said Azan.

He further declared Bashco and MegaMart experienced a decline of 10 per cent on last year.

“While we might have had an increase in Jamaican dollar sales, it was reduced because we purchase in US dollars and the dollar devalued”, he explained.

“We haven’t completed our analysis because our financial year end is at the end of February,” he added.

Bascho offers reprieve

Though the tax blues are about to hit, with an increase from 16.5 per cent to 17.5 percent on General Consumption Tax (GCT), Azan says Bashco stores will offer a bit of a reprieve to customers. “Bashco will absorb the one per cent increase on old stock,” he said. “Whatever new stock that will be coming in will be costed differently,” he added. As for MegaMart, the one per cent change will not affect consumption patterns significantly, according to Azan, and therefore “that has to be passed on”.

The retailer says he hopes that the expected decline in consumption will also not affect the government’s planned collection of $3.6 billion to help finance the budget.

“I would imagine that the government’s statistics on the sums that they are going to collect have already factored for some fall-off in consumption At least I hope their figures are not based on the present consumption rate,” said Azan.

However, while MegaMart’s CEO has detected a decline in income, another major seller, Loshusan Supermarket, is reporting that while sales declined this year, there was a turnaround of sorts during the holiday period.

“We saw a depression in sales. I don’t know if it had anything to do with the increase in taxes or just the recessionary period” said,Assistant Manager Allan Ridgeway . He continued… “I think that this time of year people will go the extra mile to get what they want.” Ridgeway declared that Christmas shopping for traditional items such as ham and other foods, as well as alcoholic beverages went well. 

” Hennessy and champagne sell pretty well at this time of the year,” said Loshusan’s assistant manager.

A further boost came from Jamaicans who live abroad, purchasing liquor to take back as gifts. “Quite a lot of Jamaican visitors take back white rum and Appleton,” he said.

The resultant improvement in sales over the season was a pleasant surprise. “It could be because we didn’t anticipate it so we were pleasantly surprised. It was pretty slow leading up to that point,” he said of the holiday shopping season.