PriceSmart sales hit by forex shortage, covid19 restrictions

A decision by PriceSmart to reduce imports due to currency shortages as a result of covid19 restrictions, has resulted in a slowdown in net merchandise sales in Trinidad and Tobago for the third quarter of 2021, which ended on May 31.

In a conference call last month, CEO Sherry Bahrambeygui said the decline was mainly driven by the covid19 restrictions in due to “a dramatic resurgence in covid infections.”

PriceSmart operates four membership clubs in TT. Bahrambeygui said the lockdown and restrictions led to a 50 per cent decline in club capacity and sales were limited to only groceries and essential goods.

“This, coupled with our decision earlier in the year to limit US imports to Trinidad because of the ongoing challenge of converting currency led to a significant decline in net merchandise sales in that market for the quarter.

“In Trinidad, comparable net merchandise sales declined 21.8 per cent in the third quarter due to the resurgence in covid19 related cases and a continuing reduction by the US inventory shipments to that market due to the US dollar illiquidity situation.”

Bahrambeygui said to meet the needs of the foreign exchange shortage PriceSmart sourced additional tradable currencies and continued to work on multiple projects to increase sourcing of US dollars.

Exporting goods produced in TT to outlets in other markets was one such means, she said.

Additionally, PriceSmart reduced shipments of US inventory in the short-term due to the current limitations to sell nonessential merchandise in TT.

Bahrambeygui pointed out that, “At the end of the third quarter, Trinidad subsidiary had Trinidad dollar-denominated cash, cash equivalents, and short- and long-term investments measured in US dollars of approximately $76.7 million (TT$ 521.1 million), a decrease of US$20 million from our balance of US$96.7 million as of the end of our fiscal second quarter.

“The decrease quarter-over-quarter is due to a combination of improvements in US dollars sourcing and the additional reduction of imported merchandise during the third quarter, which resulted in more sources than uses of US dollars during this period."

PriceSmart, Bahrambeygui said, was closely looking at the reopening of various sectors of the economy during the fourth quarter with the hope towards increasing imports as the local market and US dollar liquidity conditions saw fit.