City Market’s Woes Continue

The country’s largest supermarket chain may be headed for tougher times sooner than expected. For months now, City Markets has been on the ropes financially, following the sale of its shares by Winn Dixie to Bahamian investors Franklyn Butler and Craig Symonette.

 

On taking over the company, the new ownership engaged the services of a Barbados/Miami based management firm for supermarkets called BS&T. Immediately, holes in the City Market operation were exposed. The first thing that was obvious was the fact that City Market stores were way behind the times as far as inventory control and product loss because they were not using modern scanning cash registers or other up to date equipment to control inventory. Simply put, profits were walking out of the door because of unscrupulous staff. Just recently, with the newly installed scanners, the company has brought charges against as many as ten employees for theft in excess of $90.000.

 

The company also was smart to get rid of a number or expats who were holdovers from the Winn Dixie days. Bruce Souder, the long time GM was fired and so was Michael Clayton, one of their head buyers.

 

The other issue that came with the change over was the fact that City Market lost it’s purchasing power when Winn Dixie moved on. Before, City Market was able to buy on Winn Dixie’s credit and benefited from WD’s bulk buying arrangements with major manufacturers. This arrangement is no more and City Market has had to pay up front. This has caused a cash crisis in the company that has spilled over to it’s local suppliers.

 

We can confirm that for the past several weeks, D’albena’s Agency, Asa H. Pritchard, Thompson Trading and a number of other suppliers have had City Market on hold as far as sending them products. One report has City Market in arrears almost $1 Million to one supplier in particular and has only since resolved matters by agreeing to pay for goods on a weekly basis COD. To add to its woes, City Market has been having a difficult time getting the backing of local banks as far as extending credit is concerned. The banks are troubled by the fact that City Market holds no assets to speak of and aside from it’s headquarters and main warehouse on the East West Highway, City Market rents space for all of its stores.

 

The silver lining is that while all of this is happening, City Market still seems to be holding its own against rival Super Value and Solomon’s and upstarts Robin Hood and Saveco. The question is, for how long?