A strong profit margin has helped Big C Supercenter weather a slight decline in sales for its second quarter.
The Big C Thailand operator says “lukewarm economic conditions” continued, with the tourism sector and government spending continuing to act as the main drivers for the economy.
“Some signs of improving agricultural prices and less severe drought conditions were seen during the quarter, but this has not yet translated into improved consumer confidence,” the company said in a stock exchange filing.
During the quarter the company introduced a fundamental change in the way it trades. “We shifted our focus to the quality of sales rather than just the absolute sales amount,” says its report.
“This does not mean we are neglecting our price position among retail customers; rather, we are limiting the number of ‘big-basket coupons’ we have previously used when targeting professional customers.
“In order to be able to better answer to our customers’ local tastes and preferences, we started to reorganise and decentralise our store operations teams.
“The work to capture synergies between the company and the BJC group, our new major shareholder, has also started.” For example, the company has been using combined volumes when re-negotiating with suppliers.
During the quarter, the group’s store network continued to grow across formats. A hypermarket opened in Ranong, Big C Markets opened in Pakthongchai and Somdet, 11 Mini Big C stores opened, including three at gasoline stations plus three franchise stores, and two Pure Drugstores. This brought the store total at the end of June to 126 large-format stores (Big C Supercenter, Extra and Jumbo), 57 Big C Markets, 408 Mini Big Cs (including 167 in gas stations and six franchise stores) and 149 Pure Drugstores.
Big C’s total revenues from retail sales, rental and service income, and other income, reached baht 33,796 million (US$975.36 million) for the quarter, representing a 1.1 per cent decline of Baht 362 million compared with the same period last year.
This decrease was driven by a 1.5 per cent retail sales decline.
The group’s dual retail-property model continued its steady performance with rental income for the year increasing by 3 per cent.