BY MAUREEN N. MARATITA
Journal Staff
Photo by Maureen N. Maratita
While 2020 was a year that saw challenges for Pay-Less Markets Inc., the chain’s multiple investment plans are now in play in 2021.
Pay-Less is a subsidiary of PMC Investments Inc. Other subsidiaries are PDC Wholesale (which includes warehousing), PMC Real Estate and Pay-Less Logistics.
Edward J.B. Calvo, president of PMC, told the Journal, “Our bread and butter is our supermarket business.” However, he said, “With the pandemic, and how it impacted the community, there are certain areas and certain businesses that were able to ride through the pandemic … Pay-Less did very, very well the last year … people on Guam stayed home, so they were spending more time at home eating. We saw very strong growth in our supermarket chain.”
PDC, like other wholesalers felt the effect of the downturn in tourism and hospitality. “But they picked up correspondingly with the mom-and-pop shops,” Katherine R. Calvo, CEO of Pay-Less Markets said. “All of a sudden we had a huge robust increase and it helped with the erosion of the hotels and restaurants.”
PDC will be expanding its processing in about four weeks.
Edward Calvo said PDC had planned the expansion before COVID-19.
“Long before the pandemic there was a movement towards getting the necessary processing equipment for produce.”
The group already has a U.S. Department of Agriculture meat processing facility of about 800 square feet, in Dededo Katherine Calvo said. “We expanded the area to about 3,000 square feet and a portion of it is an enclosed area for a new USDA meat facility and the other portion is for produce packaging. We have already completed the meat portion and we should — probably in another month — have completed the produce packaging. Now we’re able to bring produce in in bulk and then work with customers like the restaurants and Pay-Less so that we can cut it and it will be in better condition than if it were flown in in bags.”
For clients and consumers, she said, “It will be less expensive because we’re no longer going to have to fly it in; but also, once you start cutting up fruits you lose the quality.” Restaurants will be able to special order produce prepared to their preference, she said. “You tell us what you want, how many pounds and we can prepare it to your specs.”
While PDC did not achieve the results of Pay-Less in the past year, Edward Calvo said, “We do believe it’s poised for growth, particularly when we get our hotels back online with tourists and our restaurants fully functional, you’re going to see [PDC] are ready to take on the market and build market share in terms of on-premises accounts.”
Staff are currently being trained on equipment. “What’s really exciting is that we know that we’re going to have a new product at a better price and we’ve branded it — Fresku — and we’ve got some nice packaging for it,” Katherine Calvo said.
Pay-Less Markets are the biggest customer of Pay-Less Logistics.
“The positive growth in Pay-Less has helped that company maintain its stability in terms of growth this past year,” Edward Calvo said. Plus, he said, “They’ve done a great job in getting increased military sales, not only for U.S. military facilities here in Guam, but in other areas of the Pacific. PDC came out of 2020 in a very strong position for growth as well.”
PMC Real Estate is looking to strengthen holdings, he said.
“What I think we’re going to get more aggressive on is on real estate development — particularly residential. There’s certain properties that Pay-Less is in — both on the retail and their wholesale side where the properties aren’t owned by the PMC family. We may be looking into opportunities where we’d like to own the property under our operational businesses.”
The real estate arm had been an area of potential concern because of the pandemic he said, particularly with high unemployment rates. “I must say, it’s remained stable. When it comes to our residential clients, we have not had any major issues when it comes to non-payment of rent. That’s been a pleasant surprise for us.” PMC has worked with those clients who have had issues, he said. “For some of our commercial lessors, things have been pretty stable in terms of paying rent.”
PMC Investments is wholly-owned by the Paul Calvo Trust — the Paul M. Calvo family. Edward Calvo told the paper that relationships are multi-layered with other Calvo Enterprises affiliates and subsidiaries with “some of them being our landlords, some of them being our tenants.” In the wider family, members sit on various business unit boards, as do Edward and Katherine Calvo, he said. “It’s an interlocking network,” he said. “Likewise, we are grooming the next generation to step in,” Katherine Calvo said.
PMC has properties in Agana, Tamuning, Agat, Inarajan, Tumon, Tamuning, Harmon. “There has been some reduction,” Edward Calvo said of the inventory, which was not only solely owned by PMC. “There were some properties in Tumon that were valuable, that we sold off. …There were also properties that were undeveloped.” In Dandan, he said, “There has been the landfill, there has been solar farms. All these are fairly large tracts of property that have been sold for various reasons — either for eminent domain or for others like the solar farm there were attractive offers,” he said.
Pay-Less has significant plans for its stores, which are typically on a 10-year renovation cycle, Katherine Calvo said.
The Micronesia Mall store will see a $4.5 million redesign, which she said is overdue.
The main entrance will face Fatima Road, where tour buses parked, largely to accommodate parking. “We will have semi-exclusivity. Where you enter will be much more convenient,” she said. Parking will fan around to the present location, where the current entrance will be a side entrance. Architect Andrew T. Laguana of Architects Laguana LLC is the project manager, working collaboratively with UNFI on the layout and design. “We really are embracing the local theme — our culture — into the store,” Katherine Calvo said.
The bidding process should start in April, with the store closing in June. “We’re looking at about five months of closure,” she said. Employees will be temporarily located. “We hope to complete and open our doors at the end of October.”
The mall store’s 40,362 square feet has a retail footprint of 26,570 and the flow will be similar to the Maite store, with floral offerings at the entrance and produce to the side of those.
“We’re going to have a beer cave and a tasting area. We’ve been working with our suppliers for equipment to look at what works best.” That will be named the Chagi Tasting station (meaning “to try” in CHamoru), she said and will also offer chesas and seating. The side entrance will lead to it.
The store is also offering 1,000 square feet of small business space to businesses that can synergize with Pay-Less. “We’ve got four pods that can be leased out to one, two, three or four various tenants.” The applicants have been narrowed down, Katherine Calvo said. “The only one that’s sure at this point is Infusion.”
The demographic at the mall “in addition to the local population has also been a popular location with the tourists,” she said. “We’re looking at a delivery service that will cater to the tourism industry. This store will also have curbside pickup as an option.”
The Oka Pharmacy is also being renovated for about $100,000 and will offer drive-up service and more home healthcare products in its relocation at Oka to the side of Pay-Less and a bigger area of 900 square feet, Katherine Calvo said. “It should be a couple of months.”
Each of the eight stores has a different character and clientele. “We’ve seen a surprising bump-up in our grocery sales from the two outlying stores — both Yigo and Sumay. It’s something we did not anticipate,” she said. Military customers from Naval Base Guam and Andersen Air Force Base have been patronizing the stores. Edward Calvo said of the quality of products, to include meat is “highly competitive.” Katherine Calvo said quality plays a part. “People are discriminating — if you know you can get a better grade,” she said.
The Yigo and mall stores are slated for curbside delivery. “And we are looking at the possibility of home delivery,” she said. Feedback has been good on online ordering, and training has allowed staff to substitute, for example. “That’s the personalization, the added touch,” she said.
Curbside delivery is going well, Katherine Calvo said. “It serves its purpose. We hired about 10 people to oversee that in the two store locations (Maite and Oka) and it gave us the jumpstart we needed to get our online program.” The pandemic had been a factor in bringing ideas to the forefront, she said.
Pay-Less will offer COVID vaccinations — potentially from the week of March 8 and will continue the vaccination program with flu vaccinations. “That’s an area we’re going to be expanding in our other locations,” she said. Additionally, Dietician Rosae Calvo is expanding the medical nutrition program, working with patients of medical professionals. “That’s already being accepted by some of the insurance companies,” Katherine Calvo said.
Customers can also look forward to the launch of a customer loyalty program.
“We feel this will really catapult us into the digital age,” she said. Shoppers will have access to e-coupons and additional discounts on products. “All the devices are in the store now,” Katherine Calvo said. The launch is aimed for the summer. “This is another opportunity for us to connect with our customers and reward them,” she said. There will be opportunities for vendors and partners to participate she said. The name of the program is still in the works.
While Pay-Less has had a good year in terms of sales, Katherine Calvo said, “There have been all the expenses that have come about with the pandemic. At the onset we moved most of our loss prevention team over to the front line to monitor the entrances for all our protocol; we ended up hiring temporary workers. There have been the challenges with suppliers not having product, having to look for alternative sources.” Pay-Less has aimed to mitigate price increases. “Our cost of goods would have gone up in many cases and course there was a moratorium on price increases at one point.”
The minimum wage increase and its impact she said will be “significant.”
Aside from compression — the upward cost in general that a wage increase drives, Edward Calvo said Pay-Less is focused on efficiency and customer service. “That means there’s a worker there at Pay-Less providing service.” mbj
