THE supermarket sector is at a 10-year low, says the chairman of a leading supermarket chain.
Speaking at a brokers' briefing in Suva yesterday, R B Patel Group Ltd chairman Surendra Patel said only two new supermarkets had opened in the past 12 months the lowest in 10 years.
Mr Patel said the supermarket trade was directly related to the spending capacity of consumers.
He said although the industry was more resilient than most other sectors, most consumers would make some adjustments to their buying patterns.
"In tough times consumers are likely to make choices that will provide more value for their dollar. This will undoubtedly mean they will spend a little less on particular food categories," Mr Patel said.
He said consumers would also become more aware and more demanding under these conditions.
Mr Patel said the forecast by the Reserve Bank of Fiji that the economy was expected to contract by 3.1 per cent this year was a certainly not a positive sign.
He said the group's trading for the first three months was slow, with reduced expenses resulting from new initiatives on cost control.
"Margins also recorded a slight decrease as consumers moved to cheaper options," he said. "These results show a conservative spending pattern with more focus on the basic necessities and seeking cheaper alternatives."
Mr Patel said in addition to achieving growth through expansion, the company's aim was to maintain profitability levels similar to last year within the parameters of the economic obstacles and the competitive nature of the industry.
The group's operating profit after tax for the financial year ending March 31, 2007 was $3.4million compared to $2.9 million last year. The figure represented an increase of 16.13 per cent.