Bynoe: Yes we can!
This past week, Andrew Bynoe threw open the doors of the spanking new Carlton Supermarket in Black Rock to the public after its soft launching two weeks ago.
The new 59 000-square-foot facility, which will include the supermarket, warehouse and a number of stores, is the fulfilment of an expansion plan that began three years ago. Emerald City supermarket in St Philip is also part of Bynoe’s A1 Supermarkets Ltd company.
In this week’s Big Interview, Bynoe tells SUNDAY?SUN Editor Bryan Walker about the decision to make such a major investment at this time, ownership of the company, what he would like see done to reduce the cost of goods in Barbados, black business here, and why Barbados has not progressed as well as it should have over the last 45 years.
What prompted you to make such a bold decision, especially in these tough economic times?
Bynoe: We recognized the old store was tired; that store was constructed back in the very early 1960s. It would have been suited to those times; but today, just under 9 000 square feet, it is difficult in terms of storage, ramp, space for containers. The aisles were too small, so that it was obsolete in a way.
So we made the decision that if we wanted to increase our . . . sales we would have to build a better store more suited to today’s environment.
How much has this facility cost you?
Bynoe: I am not in the habit of calling figures, because you can run away when you begin to talk figures . . . .
And you can’t even give us a range?
Bynoe: No, I don’t normally call figures!
What about funding? How difficult was it to raise the capital in this current environment?
Bynoe: We have a good track record. Therefore we went to our bankers . . . and they knew of our track record and our performance [financially] and they were quite happy to back this project.
When you say “we”, are you going it alone or do you have partners investing in this project?
Bynoe: When I say we, principally this company is owned by the Bynoe family, with the shareholders being myself, my wife, my son and my daughter. So the company is 100 per cent owned [by us].
With this massive financial investment, obviously you have to find ways to recoup that money. Is there going to be an increase in prices then across the board?
Bynoe: It would be a foolish thing. The economy, or the market at this time, would react to any prices that are not in keeping with the norm within the industry. So our prices, our mark-ups, our margins, will be the same as they are now.
With the high cost of living, some have pointed fingers at supermarkets, and yours in particular, especially when the Department of Commerce surveys showed that some of your prices were higher than the others . . . .
Bynoe: I refute that. What you have to understand within the industry is that today I could have it at 99 cents and next week I would have it at the regular price at $1.05. However, someone who would have brought the same special may continue to have it at 99 cents.
So prices will respond to, among other things, what you have purchased for specials. All of these things have to be taken into consideration when a survey is done.
So are you still getting complaints about high prices?
Bynoe: What I am hearing is that someone will go somewhere else and say that the prices are high; they will come to Supermarket A and say the same thing they have said at Supermarket B. So that is the regular response nowadays.
So what are you doing to address these complaints?
Bynoe: We can only work within the margins that allow us to perform profitably . . . . The norm within the industry in terms of a gross profit percentage is 23 per cent (there are times people will operate at slightly less), so that what we are giving away, our gross profit percentage will shrink to just about ten per cent.
But what specifically would you like Government to do as far as duties are concerned?
Bynoe: There are certain items right now that carry exorbitant duties for reasons that should no longer be really relevant. For instance, we import fresh milk, but we have to pay 184 per cent duty on that milk. So that milk that should be easily retailing for $10, now retails – on special, mind you, as we have to cut our margins – for $17.35.
Now we can’t bring any great amount, but because there are people who have been accustomed to drinking cow’s milk in that form – yes, there is cow’s milk available [locally] – we bring a limited amount and take the chance that it would sell.
But if you do that, aren’t you creating another problem where the import bill will rise further, and you would also be putting a squeeze on the Pine Hill Dairy in that instance?
Bynoe: Well, I do not know we will squeeze anyone else out of business if duties are reduced. What will happen is that Pine Hill may very well have to rethink their strategy.
What about a strategy by some of you supermarket owners of cutting your profit margins as well?
Bynoe: But you can’t! To cut your profit margins means that you would run yourself out of business. You can’t cut your margins any more. We have had instances in this country where people cut their margins too much and went out of business.
Have you cut your profit margins in the last year or two to absorb some of . . . ?
Bynoe: Yes! We give discounts on certain specific items . . . but this is a strategic thing. During this week [past] we are giving massive discounts, and while we had budgeted for it, it is going to cost us considerably.
The Prime Minister deemed you [at the store’s recent soft opening] as one of the most successful black entrepreneurs this island has seen. What’s your response to that?
Bynoe: I say that whilst it is complimentary, it is a reflection on the business page of this country over the last 50 years. Now I have been in business for 30 as owner, and during that time, I have seen the efforts of many black businessmen; some have succeeded, others have not.
An analysis of business generally speaking will show that irrespective of class, race, whatever, as far as business is concerned, that not all start-ups succeed; there is a high rate of failure, but where the disappointment comes is that yes, we are a predominantly black society [but] we have not had more successful black businesses.
The Prime Minister also said you had “exploded the myth that black businesses do not last beyond the first generation”. Right now, your business is still in its first generation phase, with you. What are you doing to ensure that Carlton, Emerald City and the A1 successes don’t die with you?
Bynoe: I have a son Tomilson, 30, and daughter Andraa, 27, and wife Joyce, who has been in the business working as assiduously as I have worked over the last 30 years. [The children] have come up in this environment and they know it . . . . They fit right into the business.
I have learnt from those [failed businesses] and I said to myself that will not happen to me. So I kept the family very close to what was happening with the business, so that today I’m very pleased that I can take a sabbatical . . . .
What do you see as the biggest challenge facing you now?
Bynoe: The same challenge that I had over the years – to have an anticipation, to plan as though you knew what could happen next. So that here it is today in a recession, we have opened this venture. We could have curled up [because of] tight economic times, but we responded to (1) the need over the other place, and (2) a strong belief that we can come out of this recession.
Is that how you are approaching 2012?
Bynoe: Yes, I think we are well enough positioned that we can meet our commitments. With that comfort we are looking forward to better days.
What advice would you give to other businessmen going into 2012?
Bynoe: We still have to be progressive. I believe that in this environment Government must also look at innovation. The Government should look at taxation to be used as an incentive and not to be seen as punitive or the primary source of its income within our limited economic climate . . . .
That has been the thinking within the tax area for too long. I think tax should be used differently to the extent that Government could earn [revenue] by reducing taxes and encouraging more businesses. The tax is then used as a sweetener.
We have to encourage foreign investment to this country and I think the vehicle of tax is the most attractive way of bringing investment to this country.
So are you calling for a reduction in the corporation tax?
Bynoe: Yes. I am talking about a restructuring of the taxation in this country. We follow slavishly at times the British, who believe in this concept of taxation. They are now running many of their large corporations out of London; I would consider that to be in our favour.
The same large corporations they are running should be the ones we are trying to attract. We need to understand what is happening in the world that we can capitalize on.
Should the National Insurance Scheme go ahead and offer the Four Seasons project the financial assistance it requires?
Bynoe: Four Seasons is the kind of project that this country needs, and all assistance should be given to bring that project to fruition by sensible arrangements.
As the nation approaches its 45th anniversary of Independence, are you satisfied that businesses have progressed sufficiently, or are they way behind where they should be?
Bynoe: The Barbados business climate has changed significantly over the last 45 years. Forty-five years ago we used to have what was called the Big Six, companies that were owned by home-grown Bajans. They included Plantations, Geddes Grant, Barbados Shipping & Trading, Cave Shepherd, the Foundry . . . .
Now, when we look around, what we see is that some have gone out of business, like Plantations and the Foundry. Others have retained their names, but the directions come from outside of Barbados.
So that Bajans have to decide what is their place in business in this country. Can we find the model that allows the ultimate control to stem from here? Can we recreate a business Barbados that is controlled by Bajans?
Bynoe: Yes we can, by having the desire to do it. I think we have sold out too quickly . . . .