BASSETERRE, St. Kitts - 2011 was a year when businessmen had to scratch their heads and scour their brains for new ideas as less money flowed into and around St. Kitts. Hit by global recessional trends, by a huge national debt and more taxation, every business and household was forced to conserve spending and to tighten their belts just ‘one more hole’.
Small businesses teetered on the brink of disaster and some, like Clear Harbour, were forced to close as the competition became much too stiff. Many floundered as electricity rates climbed 85 percent higher.
Downsizing was the order of the day even for those businesses in the heart of Basseterre such is Island Hopper, and civil servants in Government Departments felt the hand of the chopper when at the age of 55, many were forced to retire.
But while some businesses were shrinking, it seemed that others were expanding... but alas, those expanding nearly all seemed to be foreign-based.
There was the expansion of Rituals Coffee with a new branch opening right in the heart of downtown Basseterre at Fort Street; the obvious increase in the number of Chinese supermarkets and restaurants; and over on Port Zante the number of Indian jewellery and clothing businesses blossomed!
The cry went up once more from locally owned businesses that the playing field for businesses was not level. Incoming businesses had an obvious advantage with concessionary rates and taxes which local businesses did not enjoy. It was therefore easy for foreign businesses to have the upperhand in the pricing of goods.
That same cry was repeated when in December major reductions on duty were made to ‘barrels’ coming in with Christmas food and the value of goods that could be brought in by nationals shopping abroad rose from $400 to $1500.
Strong protest from the local CAIC (Chamber of Industry and Commerce) that these measures would encourage overseas spending with the resultant decrease in local spending led the government to announce a 10 percent VAT reduction in goods including foods, building material, appliances for just one day. This day was dubbed "Black Thursday" and it did lead to a rush on spending locally on that one day.
The consumer benefitted indirectly in many ways as companies had to engage in several strategies to woo them to their doors.
Give-aways, free services, chances to win cash, discounts and one-day sales were regularly announced on the air ways. Hire purchasers from S.L. Horsford & Co.Ltd got food vouchers which doubled and tripled as the competition grew – while hire purchasers at TDC could get a Blackberry for free. Cash-back on vehicle purchases was introduced.
The two telecommunication giants LIME and DIGICEL almost tripped over themselves in their race to harness customers to their sides.
Sponsorships of major entertainment and sporting events continued as well as incentives to “talk and text as much as you like”.
LIME, at the beginning of September held what could be deemed as the biggest business event of the year dubbed "Skool Aid" - a back to school fair. For an entire day, parents and guardians had the luxury of getting free vision checks for their children from the experts of Eye Care Express as well as free dental checkups from the New Era Dental professionals. Barbers and hair braiders were also on hand to give free haircuts and braiding services to the children.
DIGICEL gave customers a chance to “grab cash”.
Kajola Kristada is trying to make its staff more competitive by becoming more competent. They have introduced regular training courses followed by graduation ceremonies - all intended to raise the level of competence and output.
In Tourism, small hotels felt the brunt of the reduction in stay-over visitors and fears were not allayed by the increase in cruise ship arrivals. To keep their doors open and to be able to retain staff, some of these hotels have opened their doors to foreign students from local off-shore colleges and are now offering them packages with which local landlords can no longer compete.
With money in such short supply, the new company FastCash quickly found a welcome niche when it opened its doors in July. With the call that it was ‘making it easy to borrow money’, it provided unsecured loans of up to EC $ 8 000 for one year or less to qualifying applicants. Many claim it kept them out of debtors’ prison.
‘Money management’ rather than ‘Getting more money’ appeared to be the advice of ECCB (East Caribbean Central Bank) when it sponsored a Trainer of Trainers Workshop on Money Management which was geared towards helping the public to manage money wisely through the advice and help of the financial sector.
This idea was echoed as ECCU (East Caribbean Currency Union) marked the 10th year of Financial Information Month in October with the theme of “Grow your savings”.
It was the desperate need to ‘grow savings’ that caused commuters to become excited with anticipation when they learnt that REDject, a low fare carrier was interested in having St. Kitts and Nevis added to its flying routes.
The anticipation became even greater when, in the wake of high fuel prices, LIAT reintroduced fuel surcharge on tickets. Jet fuel prices had increased by at least 26 percent, and passengers were now being charged US$12.50 for a one way trip of up to 150 miles; US$17.50 for a one way trip of between 151 to 300 miles; and US$20 for a one way trip above 300 miles.
However, so far REDjet carriers have not yet appeared at RLB International Airport
The issues that challenged businessmen in 2011 will remain in the upcoming year, but hopefully through awareness and experience, their limbs are now stronger to climb the hills of 2012.
A lot will depend on how much consumers learn to feed themselves and support local enterprise.
