U Select, Hong Kong’s third largest supermarket chain, has shut down nearly half of its store network in the past year due to economic headwinds and lower consumer sentiment.

The number of U Select branches in the city has dropped from about 100 to 57 after the chain closed its loss-making venues. The retailer expanded quickly during Covid as the pandemic fuelled an exodus of expatriate and local professionals.

However, the economic slowdown and weakening yuan are sending record numbers of residents to Mainland China for cheaper goods and services, according to Bloomberg.

U Select is in talks with potential partners in the mainland to obtain new products to lure more customers, The Business Times cited some sources related to the matter.

The Hong Kong supermarket sector has been in general decline for 18 consecutive months, with sales down 14 per cent year-on-year in January, the administration’s statistics show. Meanwhile, in Mainland China, supermarket chains like Costco Wholesale and Walmart’s Sam’s Club have become increasingly popular. 

• Further reading: Hong Kong’s retail sales revival ran out of steam in January