Demand is up, foot traffic is down and trading is restricted but Papua New Guinea’s retailers are finding a way through the country’s current lockdown – and some positive changes are here to stay, reports Paul Chai.

Waigani Central Shopping Centre. Credit: BAI

It is the best of times and the worst of times for Papua New Guinea’s retailers. On the plus side, there are surges in demand due to panic buying and stockpiling, but a much-changed retail environment during lockdown is seeing lower foot traffic and social distancing impacting how we shop.

Mahesh Patel, Managing Director of the CPL Group, says that in his business the increased buying and the disruption have just about cancelled each other out.

‘Every day is a different day,’ Patel says. ‘Trading for us is steady in Port Moresby and we are getting some gains, but a lot of these gains are eaten away. We have to privately transport employees at the moment and there is additional security needed and overtime, so while we are getting gains in the top line, the costs just negate it.’

Unlike Australia, for example, where shoppers have a higher disposable income, the panic buying in PNG has not been sustained, spiking initially and then levelling out. But the increased cost of doing business has remained.

‘Cost is a pressure, so what I am telling my staff is we need to be more productive,’ Patel says. ‘I don’t want to start shedding people but we need to work harder, our aim is to make sure we have stock on the shelves.’

Brian Bell’s Cameron McKellar.

Cameron McKellar, CEO of retailer Brian Bell, says that they have also seen an increase in certain areas of the business.

‘Chemicals has seen extraordinary growth for all the obvious reasons,’ he says of the business. ‘Because it sells protective items, gloves, sanitary items, disinfectant and cleaning and that continues to double the turnover that it ordinarily has.’

But in other parts of the business, Brian Bell stores have been hit by a reduction in foot traffic and reduced trading hours. It is also a time of great disruption to supply chains. With much of the world in lockdown, it is time to look local.

‘We have actually procured some significant furniture from local suppliers in recent weeks as a result of Malaysia and Indonesia closing down,’ McKellar adds.

Changing retail for the better

CPL Group’s Mahesh Patel. Credit: BAI

There are also a number of positives to come out of the epidemic for retailers. McKellar says he simply looks to other industries, like the severely hit tourism sector, to be grateful that the retail sector is still able to trade.

But there are more tangible gains being made as a result of the pandemic. Brian Bell now has more regular meetings – which McKellar calls ‘huddles’ – and that has improved communication in the business as a whole. He plans for them to continue.

‘On the positive side, because we are in the essential industries, our forex position has improved because we get priority to get food and medicine.’

And the improvements around hygiene and cleanliness are here to stay.

‘There is one great message that has come out of this pandemic and that is the improvement in hygiene practices in PNG,’ McKellar says. ‘Whilst our business has been an early adopter of hand sanitiser and significant cleaning regimes, we will retain those practices forever more in our business because they do not just stop the spread of COVID-19 but also the spread of TB and normal flu.’

Patel says that they have been fortunate that they carry a lot of ‘buffer stock’ so have been able to cope with the increase in demand for certain products.

‘Also on the positive side, because we are in the essential industries, our forex position has improved because we get priority to get food and medicine,’ he adds.

But even Patel has trouble keeping up with the current need for hand sanitiser, the current go-to for stockpilers.

Michael Kingston, CEO of K K Kingston is trying to fill the orders as soon as possible with a pivot of his own. Kingston says that opportunistic supply is the current trend with ‘every man and his dog’ currently wanting to make hand sanitiser while K K Kingston is having to cope with delays in its manufacturing supply chain.

‘We have come up with an alternative formula for hand sanitiser with locally sourced ingredients, that means no delays in importing raw materials from overseas,’ Kingston adds.