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Berli Jucker, the operator of Big C in Thailand, reports positive Q3 results and international expansion in 2019.

Q3 sales increase but profit margin decline

Big C sales reached THB 27,855M (US$ 846.7M) in Q3 2018, growing by +7.2% year on year. Gross profit margin declined from 17.7% to 16.8% due to high base, sales mix changes and continued price investments. Same store sales growth also registered a solid growth of 2.5% in the quarter.

Expansion driving top line

Big C opened two hypermarkets in Q3, contributing to its strong sales growth. It is planning a total of eight store expansions for 2019 including one located overseas. While the earnings presentation did not reveal the exact location, Mr Aswin Techajareonvikul, Berli Jucker’s CEO and President, has mentioned that “the company will open a store in Malaysia soon” during Big C's Expo in September.

Mr Aswin said, “We are interested in Malaysia because there are few retail chains and Malaysian customers are quite familiar with Big C through our stores in Hat Yai and Pattani.” This will be the company’s third business in Malaysia, after its operations in glass and snacks.

More international plans ahead

The retailer has plans to open one Big C Supercenter in Laos where it currently operates 46 M Point Mart stores. It is exploring Cambodia as well for Big C expansion. In Vietnam, it is repositioning MM Mega Market wholesale stores to hypermarkets. There are 19 MM Mega Markets and 144 B’s Marts convenience stores. It is looking for locations to open five more MM Mega Markets next year.

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Government shows support for traditional trade.

Hypermarkets will not be allowed in some parts of the country

The Malaysian government has stated that it will not permit hypermarkets to operate in certain areas of the country. The announcement is intended to support the traditional channel, also known as kedai runcit, and to allow them to continue operations.

The minister of Domestic Trade and Consumer Affairs, Datuk Seri Saifuddin Nasution Ismail said, “The hypermarkets really want the government to lift the restrictions, so they can also operate in the interior areas. We will not allow that because it will affect the small retail industry.”

Although the minister acknowledged that hypermarkets have the advantage of cheaper products, he also said that the government had to weigh the overall situation and the impact hypermarkets may have on these smaller sundry stores.

If they allow them to go to the fringe areas, it would benefit the consumers, but the result will be that the sundry shops will die off, so we have to weigh the situation,” he said.

 

Find out more about the Malaysian grocery retail market here.

 

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Nine new stores opened in 90 days.

Strengthening its presence in existing clusters

Spencer’s Retail Limited, India’s oldest retailer, boosted its presence in the country by opening nine new stores in the past three months. The multi-format retailer now operates more than 140 stores across 40 cities. Of these, 33 are large format hypermarkets called Spencer’s Hyper.

Instead of network expansion into new territories, the retailer has focused on improving its store network in existing cities. Its recent stores were opened in cities such as Kolkata, Lucknow and Hyderabad. These stores range in size from 180 sq m to 2,300 sq m.

More about Spencer’s Retail

Part of the RP Sanjiv Goenka Group, Spencer’s Retail provides a wide range of grocery products in a modern retail environment. Based in Kolkata, it is well established in north, east and north-east India. Many stores also provide a variety of non-food and general merchandise items such as apparel, home electronics and sporting goods.

 

Find out more information Spencer’s Retail Limited here.

 

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SPAR India opens 24th store.

New hypermarket located in Hyderabad

SPAR India reaffirmed its commitment to India with the opening of its 24th store in Hyderabad. Located within the Sharath Capital City Mall, it is the fifth SPAR hypermarket in this city. This milestone also marks a growth by 50% of SPAR India’s store network within just 24 months.

Mr. Rajeev Krishnan, SPAR India’s Managing Director said, “Here in Hyderabad we are delighted to showcase our promise of fresh, value, choice and service through retail innovation.”

More about SPAR India

SPAR hypermarkets offer a wide range of groceries and everyday essentials in many major cities around India. Targeting affluent and middle-income families, it is known for its value and strong fresh offers.

Find out more information the SPAR India here.

 

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We study the top large format retailers in Asia, their growth strategies and the markets where large format stores will see the strongest growth over the next five years.

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Presentations

We visited Big C's latest store in Vietnam to see how Central Group is boosting the hypermarkets chains value proposition on basic food products, while generating excitement in its non-food categories.
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