PriceSmart membership at all-time high Loop Jamaica
Black Immigrant Daily News
PriceSmart, the operator of 50 wholesale cubs in the Caribbean and Latin America, says its membership base is at an all-time high, with over 1.75 million accounts in its third quarter.
The new record follows the April 2022 opening of its Portmore club in St Catherine, Jamaica — PriceSmart’s second on the island.
PriceSmart reported that its net merchandise sales grew to almost US$1 billion in the third quarter ending May 2022 of its fiscal year, up 12.8 per cent over the comparative period last year.
PriceSmart CEO Sherry Bahrambeygui said the sales performance improved even after taking into account a negative currency impact of 2.2 per cent.
Comparable net merchandise sales for the 47 warehouse clubs that have been open for greater than 13 1/2 calendar months increased 12.8 per cent for the 13-week period ended May 29, 2022, compared to the comparable period of the prior year.
Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $18.6 million or 2.2% versus the same period in the prior year.
Total revenues for the third quarter of fiscal year 2022 increased 15.1 per cent to $1.03 billion compared to $895.3 million in the comparable period of the prior year.
Bahrambeygui noted, however, that like many other retailers, PriceSmart has not been spared the impact of global supply chain disruption and abrupt shifts in consumer demands.
Despite making strategic investments in inventory to remain in stock and capture higher levels of sales, the CEO said supply-chain issues have disrupted the flow of inventory.
She also noted that inflation has influenced consumer behaviour by shifting the demand away from discretionary and toward more essential items.
“As a result, we have been experiencing excess inventory, primarily in the area of hardlines,” she said.
Hardlines refer to non-personal items such as sporting equipment, appliances or electronics.
“Our hardlines and other non-food categories are characterized by a higher penetration of imported items that tend to correlate with discretionary spending, the CEO explained.
To this end, PriceSmart said it has taken decisive action to swiftly sell through excess inventory and quickly rebalance its inventory mix as it has experienced higher than normal markdowns.
“Our plan is to handle this quickly and efficiently in order to be well-positioned for the holiday season.”
PriceSmart said it is likely to see some margin pressure in the fourth quarter but expects it will be far less than the third quarter.
“We see this as a point in time. We have gained many new important insights. We expect soon to return to our healthy, historical margin structures.”
In the meantime, Bahrambeygui said PriceSmart remains focused on its plan to drive growth through expansion of its global real estate footprint, increasing the value of the membership, and driving incremental sales through PriceSmart.com and through the creation of additional technology capabilities.
PriceSmart is also expanding in the region and has purchased land to open its third warehouse club in El Salvador.
The company had 50 warehouse clubs in operation as of May 31, 2022, compared to 47 warehouse clubs in operation as of May 31, 2021.
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