Carmen Safeway Enterprises president Frances Leon Guerrero Borja said after more than six months of assessing the best business option to take, it has been decided to shut down Carmen Safeway Supermarket and their wholesale division.
Starting today, there will be a big closing sale until Carmen Safeway’s last day of operation, Nov. 15.
But Borja family has retained the operations of their two other business divisions — housing and property rental and the funeral home.
“Unfortunately, with the continuing decline of the CNMI economy coupled with high wages and utility rates plus the uncertainties of federalization, it’s extremely difficult to continue to operate,” Borja told Variety.
The closure of the supermarket and wholesale outlet will displace 18 employees — seven nonresidents and 11 locals — half of whom are receiving more than the current minimum wage rate of $4.05 an hour.
It was in March 2005 when the Borja family acquired the then-Meitetsu Shopping Center from its Japanese owner.
“The first year was really a good year for us…but after the Japan Airlines pulled out [in Oct. 2005], it has been down since then,” Borja said. “We had confidence then that the CNMI economy would recover but it hasn’t.”
She said the store also catered to Japanese tourists.
According to Borja, their utility costs are “quite substantial and are a big part of our expenses.”
She declined to disclose the losses incurred by Carmen Safeway, but admitted that its operation is being subsidized by their other businesses.
She said reducing their power consumption is not enough to sustain the operational needs and expenses of the store.
“The power rate is too high,” she said, adding that the federally mandated minimum wage also resulted in a 30 percent increase in their personnel costs.
“Carmen Safeway is operating in the red for over a year now…and we’re able to do that because we subsidized its operation, but it’s just too much,” Borja said.
They are now hoping to rent the facility either for store operation or office spaces.
Borja said CNMI businesses will face a “more difficult year” next year when local immigration is federalized.
“It might be really challenging for businesses here,” she added.
According to Borja, the CNMI government must step up its efforts to help the existing businesses on island that contribute to the local economy.
This week, Carmen Safeway’s major vendors, suppliers and customers were informed about the company’s decision.
“It is our hope to sell out everything before Nov. 15,” Borja said.
Ingka Sipia, 38, a cashier of the supermarket for two years and a mother of three, was saddened by the company’s decision.
“But we understand,” she said. “I just hope that I can find a new job for my family.”
