A ten percent grocery discount scheme is to end because retailers can’t afford it.

But Home Affairs Minister Michael Fahy said he hoped to “narrow the scope” of the discount deal to target those in most need.

Sen Fahy told Senate yesterday that the cost of the Wednesday-only discount had been higher than the three big supermarket chains had thought.

“The primary objective of the ten percent discount was to provide those in need a greater food price reduction to assist them through their time of financial need,” he said.

“The success of the initiative far exceeded the projected usage anticipated by the participating grocers, which have taken a significant revenue loss over that which was projected.

“Previously, Saturdays were the grocers’ busiest day of the week with a steady flow of customers throughout the week.

“However, since the introduction of ten percent Wednesdays the weekly flow of customers has diminished considerably, which has contributed to their bottom line losses.

“The grocers have indicated that this initiative as it presently stands cannot be sustained after November 30.”

Chamber of Commerce president Kristi Grayston said the sector had known the scheme was unsustainable in the long term — and agreed that shopping patterns had changed as a result of the discount, with more people shopping on Wednesdays and more making “higher ticket purchases.”

She added: “The margins in grocery stores are very tight and we were aware this would be unsustainable. Really, what we need is to get Bermuda back on its feet stimulating the economy and getting people back to work — discounting can only be a stopgap measure.”

Ms Grayston, who comes from a retail background as owner of Pulp & Circumstance, said it was “clear from the numbers” that it was not just those in need who were taking advantage of the existing discount.

The scheme was introduced last December for one year as Bermuda continued to struggle with the effects of the global recession, with major players MarketPlace, Supermart and Lindo’s taking part.

Sen Fahy said the success of the scheme showed the need for some kind of discount on food shopping — and the willingness of Island businesses to help.

But he added that the concerns of grocers, as well as public opinion and how any scheme targeting the most in need could be run without adding to the workload of Government social services, had to be considered.

“The Ministry’s findings during this initiative have confirmed the need for it to be continued in another more controlled format that creates and equitable exchange between stakeholders,” he said.

“There are some details going forward that need to be worked out — however, the Ministry is certain that it can develop the objective of this initiative into a more sustainable venture going forward.

“To this end, I have committed to meeting with grocers and importers to discuss how and what we can do to assist the people of Bermuda and grocers to make this a win/win moving forward.”

Sen Fahy said afterwards that he hoped to thrash out an agreement with retailers and importers to offer a discount on an agreed “shopping basket” of staple items instead.

“I believe that’s the preferred option — but that needs to be talked about with the stakeholders, the ones responsible for giving discounts,” he said.

He added that a list of staples would need to be agreed as the Consumer Price Index basket of staples used by the Department of Statistics was not an accurate representation of the average Bermuda family’s shopping habits.

“Retailers have done a phenomenal job and they have made a sacrifice, but we want to hit this thing up front so it doesn’t disappear entirely.”

He dismissed suggestions that the discount could be means-tested and only available to people receiving Government financial assistance.

He said: “It wouldn’t be fair to ask people to go to the cash register and prove that. We don’t want to put people in that position — that’s not fair at all.”

Ms Grayston said: “Maybe there is some way to work with Government to help people who really need these staples.

“If the sector can do more for the community, that’s wonderful. If they can’t we understand and we’re appreciative of what they’ve already done.”