CK HUTCHISON Holdings’ retail businesses in Hong Kong faces pressure from residents flocking to mainland China to wine, dine and shop.
“Inevitably, many residents heading north to shop in nearby cities has affected their consumption sentiment in Hong Kong,” deputy managing director Dominic Lai said at a briefing on Thursday (Mar 21). “Our group’s retail business in Hong Kong has also felt the pressure.”
That’s meant the conglomerate, founded by billionaire Li Ka-shing, has had to re-think its consumer offerings. It’s now adding more health-related products in shops located in tourist-heavy districts to attract mainland Chinese shoppers, Lai said.
It’s also sourcing more products for its supermarkets from across the world, including from mainland China, he said. CK Hutchison’s retail business spans supermarkets to AS Watson, the world’s largest international health and beauty retailer.
Hong Kong’s retail outlets, restaurants and bars have been hammered by a record number of residents heading across the border, where there’s a booming array of entertainment and dining options at low prices. That’s come alongside a broader exodus of expats and local professionals following the 2019 protests and years of strict Covid curbs that have left the city struggling to maintain its reputation as an international financial hub.
Still, CK Hutchison’s retail division reported a 13 per cent increase in earnings before interest, taxes, depreciation and amortisation last year, mainly due to favourable performances in Europe and other parts of Asia, chairman Victor Li said in a statement on Thursday.
Those majority of operations in those divisions have already exceeded pre-pandemic levels and should continue to deliver solid results this year, while mainland China and Hong Kong are expected to improve through network optimisation and other initiatives, he said. BLOOMBERG
