By NEIL HARTNELL
Tribune Business Editor
A major Bahamian retailer yesterday said it believes this is “still the best time to go ahead” with its $8.2m investment in new stores despite the latest national COVID-19 lockdown.
Jason Watson, Automotive Industrial Distributors (AID) president, told Tribune Business it still retained sufficient confidence to take advantage of construction’s exemption and push ahead with building new stores at its Blue Hill Road location and in Abaco.
He added that the Blue Hill Road project was expected to benefit from tax breaks and concessions under the government’s Over-the-Hill revitalisation initiative, with AID awaiting parliamentary approval of plans to expand this zone.
Disclosing that this had further bolstered the retailer’s optimism, Mr Watson said the lockdown was nevertheless expected to cost AID 85 percent of its normal sales by restricting the retailer to curbside and pick-up services only.
He revealed, though, that the company plans “to sell everything that we have available” by using its hardware licence - and the ability this gives it to open on Monday, Wednesday and Friday - to also offer its auto parts products and other goods.
“We’re going to go ahead as planned,” Mr Watson said of AID’s store investment plans. “Hopefully this [the lockdown] will not last months. Hopefully we will be able to open in a matter of weeks as opposed to months.
“Construction is in progress in Marsh Harbour and I think they should be finished with the skeleton of the building in a couple of weeks. At Blue Hill Road they’ve finished the demolition and started evening out the property.
“At this time we’re going to continue. I think it will be a short period of time before the restrictions are relaxed and we’re allowed to open fully or pretty close to fully. Obviously in a few weeks that may change, but hopefully the number of active cases trends downwards and there are more COVID-19 recoveries, and we will be able to start opening up again.”
AID is projecting that the two projects will expand its workforce by 25 percent or 40 persons, taking it from the present 160 to 200 persons. Mr Watson said the likelihood of obtaining tax incentives for the Blue Hill Road store from the Over-the-Hill initiative had given the retailer “more confidence” to proceed, while it also stands to benefit from the 2020-2021 budget slashing all import duties on construction materials to 20 percent.
“Based on what the government has said we expect that programme will include that location,” he said, pointing to real property tax and business licence exemptions on offer, as well as duty/VAT reductions and breaks. “Hopefully they will actually pass that in Parliament. They were supposed to table it [the zone expansion] but probably got sidetracked with the COVID cases and it got pushed to the side.
“That gives us some confidence it’s a worthwhile investment even with the current circumstances we have now. Hopefully this [lockdown] is a short-term issue as opposed to long-term.” Many observers, though, believe the latest national lockdown will last well beyond two weeks and may endure for at least a month.
However, Mr Watson argued “this is still the best time to go ahead” with a major capital investment given that economic activity remains relatively benign. He added that the “trickle” of customers visiting all AID locations yesterday morning had increased as the day progressed and more persons became aware it was open for curbside commerce.
“We are selling everything that we have available,” the AID president said. “We have a hardware licence, which allows us to open, but we’re selling everything we have. With curb side and everything we’re allowed to open it’s about an 85 percent drop in sales compared to normal.
“But psychologically it’s very important. Nothing is worse than having no revenue come in. We still will have some revenue coming in. Even though it’s 15 percent of what we would normally get, psychologically it’s much better and much more encouraging than zero.”
Mr Watson said AID will be able to pay staff their regular 40-hour work week wage as a result of being allowed to restock on Tuesdays and Thursdays, even though stores will be closed to the general public.