Thai hypermarket operator Big C Supercenter boosted margins in the latest quarter despite the challenging economic climate.
The company has reported continued resilient rental and service income growth, margin improvement across the board thanks to a focus on the quality of sales – delivering a “robust” Big C profit boost.
The third quarter to September 30 was the first full reporting period of its new strategic focus on quality of sales rather than the absolute sales amount.
“On our operations we continued our push to localise our offer in order to become the ‘Thai retailer with customers in our heart’ as we will be better positioned to serve local communities and their varying tastes,”explained Rumpa Kumhomreun, CFO & VP of accounting and finance, in a filing with the Thai SET. “Our work to capture synergies between BJC and Big C is continuing, and during the quarter we for example moved some of our private label tissue manufacturing to BJC. We also started serving Big C Soft Serve ice cream in pilot hypermarkets and Mini Big C stores. Our access to TCC “land bank” also made it possible for us to open an additional Big C Market store at Pantip Chiang Mai during the quarter.”
The company also improved its online offer, rebranding its Cdiscount.co.th to Cmart.co.th, with over 70,000 SKUs available.
Big C’s Total Revenues from retail sales, rental and service income, and other income, for the quarter reached Baht 25.892 billion – a decline of Baht 5.799 billion or 18.3 per cent over the same period last year. This decrease was driven by a retail sales decline of 20 per cent from the same period last year, and a same-store-sales decline of 22.6 per cent.
“The significantly declining same-store-sales trend was driven by our strategic focus on the quality of sales rather than absolute sales volume,” said Kumhomreun.
With a similar fall in expenses, however, Big C’s net income attributable to shareholders grew by 14.6 per cent to Baht 1.538 billion for the quarter, up Baht 196 million year-on-year.
Gross profit margin reached 17.8 per cent for the quarter, representing an increase of 487 basis points from last year.
Store expansion continued during the quarter in all store formats, with two hypermarkets opening in Phonphisai and Na Thawi, two Big C Market stores in Loei and Chiangmai, 23 Mini Big C stores including 15 franchise stores, and one Pure Drugstore. Those took the store count at the end of September to 128 large format stores (Big C Supercenter, Extra, and Jumbo), 59 Big C Market, 431 Mini Big C (including 21 franchise stores), and 142 Pure Drugstores.
