Sa Sa sales in Hong Kong and Macau grew by 2.4 per cent for the first quarter, but same-store sales dropped by 2.5 per cent.
Sa Sa says the unaudited figures were weaker than the previous quarter, affected by a particularly quiet June which was marked by typhoons and extended torrential rain. With a cool-down in Korean products and less store traffic, sales volume fell with fewer transactions by local and mainland tourists, down 4.1 and 6.4 per cent respectively.
“However, some customers switching out of Korean products and into broader alternatives resulted in demand for higher-priced products,” says the retailer. “As a result, the average purchase per transaction of local and mainland customers has started to rise gradually, up 3.1 and 2.9 per cent respectively.
“Our strenuous efforts to improve house-brand offerings is beginning to bear fruit, with the first quarter seeing improvement in the house-brand mix as well as gross profit margin in the Hong Kong and Macau markets. However, the increase in gross profits is not yet sufficient to offset the weakness in June’s sales performance and the one-off costs of Hong Kong warehouse relocation.”
The group says it is cautiously optimistic about the Hong Kong and Macau markets and continues to invest in residential shops and extra staffing as well as launching a new own-label brand.
It says these strategies will increase the group’s competitiveness but also exert short-term cost pressure.
Sa Sa’s unaudited figures for the quarter to the end of June show retail and wholesale turnover increased by 2.1 per cent. In Hong Kong and Macau, the number of transactions eased by 0.4 per cent, while the average sales per transaction grew by 2.8 per cent.
The group’s retail and wholesale turnover in other markets (including China, Malaysia, Singapore, Taiwan and e-commerce) rose by 0.5 per cent for the quarter.
“Stepping into the second quarter, sales performance in the Hong Kong and Macau markets has
shown conspicuous improvement,” says chairman/CEO Kwok Siu Ming Simon. “While the group is strengthening choices in selected product categories, it is anticipated sales in Hong Kong and Macau will continue to improve in the second quarter.”