By ANNELIA NIXON
TRIBUNE Business Reporter
anixon@tribunemedia.net
AML Foods opens its second Solomon’s store in Exuma today while warning that higher shipping costs and changes to the Government’s VAT regime continue to complicate efforts to deliver lower grocery prices.
Renea Bastian, AML Foods’ vice-president of marketing and communications, said the BISX-listed food retail and franchise group, is working to contain costs through negotiations with suppliers and shipping companies, while seeking government assistance to address the structural expense of operating in the Family Islands.
“The thing is, it’s just very, very expensive to operate in the Family Islands,” she said. “From where we sit, I want you to know that that is paramount in terms of being able to drive value for customers. So we’re negotiating with vendors, we’re negotiating with the shipping companies, really trying to drive down the cost. The challenge is that we need some government assistance.”
Ms Bastian said the new store located in Hooper’s Bay is a significant addition to its Exuma operations, offering a larger shopping space, an expanded product line-up and the return of a butcher shop.
The opening comes as Bahamian food retailers contend with rising international freight and fuel costs, alongside the Government’s decision to eliminate VAT on grocery food from April 1, 2026. The tax change has also raised concerns about merchants’ ability to recover VAT paid on business expenses associated with exempt food sales.
Ms Bastian said the cost of bringing goods into The Bahamas and distributing them to the Family Islands places significant pressure on retailers, particularly when compared with the expense of shipping directly to Nassau.
“Just to break it down, if you’re shipping to Nassau from the US, and we all know that basically everything that we consume comes from the US, there’s a 30 percent charge just for shipping,” she said.
“Then we have to pay that. Then we have to pay Customs duty. And now with the new government regulation on VAT, we can’t redeem any of the VAT back because we’re not collecting any of it. And then we have to get those items to the Family Islands, so that’s an additional cost.”
“Now, if you’re shipping directly from the US to the Family Islands, the shipping is 50 percent right off the bat before you pay Customs or VAT. So that’s the challenge.”
The concerns come as Tropical Shipping prepares to increase bunker surcharges on cargo moving between the US, Canada and The Bahamas from November 8, citing volatility in global fuel prices.
The increases include a $25 rise in the surcharge on 20-foot dry containers, from $225 to $250, and a $50 increase on 40-foot dry containers, from $450 to $500. Charges on refrigerated containers will also rise, increasing the cost of transporting temperature-sensitive goods.
Higher freight charges can add to the landed cost of imported groceries and other consumer products, leaving merchants to decide whether to absorb the increases or pass them on to customers.
Ms Bastian said AML Foods is attempting to mitigate pressures by leveraging its purchasing power across its operations, and consolidating shipments to spread transportation costs across larger volumes of merchandise.
“But we understand, and we’re all about driving value,” she said. “So what we try to do is to basically leverage our buying power in terms of all of the different brands, trying to make sure that we fill containers so that the cost can be spread. So we’re really trying to make sure that we can bring value.”
The BISX-listed group is also exploring private label products as a way to offer shoppers cheaper alternatives to established national brands.
“Something else that we’re looking into is private labels,” Ms Bastian said. “So, in a lot of instances, you have private labels that are just as popular and good as the national brands, but they’re a lot cheaper. So we are looking at opportunities.”
She added that AML Foods assesses the costs of products before deciding whether to bring them into the market, adding that some items could become too expensive to sell at prices customers would consider reasonable.
“Our merchandisers know at what cost they’ll be able to sell something for, and if it’s just cost prohibitive, we can’t bring it in,” she said.
The retailer’s pricing challenge is unfolding against the backdrop of the Government’s latest cost of living measures, which eliminated VAT on food sold in grocery stores. However, the decision to make qualifying food items VAT-exempt, rather than zero-rated, means merchants can no longer recover all VAT paid on expenses associated with those sales.
Super Value and former AML Foods chairman, Dionisio D’Aguilar, have previously warned that the change could increase retailers’ administrative burdens and operating costs, with the latter arguing that businesses could ultimately raise prices to offset VAT expenses they can no longer reclaim.
For AML Foods, Ms Bastian said containing costs remains a priority as the company expands beyond New Providence and seeks to improve access to its product range in the Family Islands.
“We’re talking about resilience,” she said. “For us at AML, it starts with strong processes and systems. It requires well-planned, disciplined processes across forecasting, ordering, distribution, inventory management and, of course, store operations.
“Our goal is to always make sure that the customer has the right product at the right time, in the right quantity and at the right place.”
Ms Bastian said scalable operating systems have become increasingly important as AML Foods expands its presence in the Family Islands, including Harbour Island, Eleuthera and now Exuma.
The new Hooper’s Bay location is larger than the company’s existing Georgetown store and is intended to provide a broader shopping experience for Exuma residents.
Ms Bastian said the store will offer the company’s loyalty programme, allowing customers to earn rewards on purchases that could be redeemed later. She also confirmed that the butcher shop has returned to the store, responding to requests from residents.
“It’s a much bigger store than the Georgetown location,” she said. “We will have the loyalty programme. I think that would be the only one on the island. So every time you shop, you will earn rewards that you can redeem later.
“But the assortment, we have the butcher shop that’s now back. I know a lot of Exumians were asking about that. So the butcher shop is back, and the full assortment, Solomon’s assortment, will be in the store.”