Convenience Retail Asia sales, profit rise despite Hong Kong unrest
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Circle K Hong Kong parent Convenience Retail Asia has recorded a 5.9 percent increase in sales last year to HK$5.632 billion (US$724.7 million), despite the onset of social unrest disrupting its core Hong Kong retail market.
Net profit for the year rose 13.3 percent to HK$208 million on the back of higher sales, operational efficiencies, and reduced production costs resulting from the depreciating renminbi.
Chairman Victor Fung said that if there was a silver lining to the second half-year “it was how the group responded to these challenges”.
Convenience Retail Asia ended the year with 383 Circle K stores in Hong Kong one fewer than a year earlier, 99 Saint Honore bakery stores and nine Zoff eyewear stores. A 10th Zoff store has opened this year at Lee Theatre Plaza.
Turnover for the convenience store business increased 7.5 percent to HK$4.524 billion with comparable-store sales growing 6.1 percent against the same period in 2018. Turnover for the bakery business decreased by 2.5 percent to HK$1.092 million due to reduced sales of festive products. And turnover for developing business increased 36 percent to HK$105 million due to the expansion of the Zoff store network.
Questions & Answers
Q.How did Convenience Retail Asia manage to increase sales despite the unrest in Hong Kong?
How did Convenience Retail Asia manage to increase sales despite the unrest in Hong Kong?
The company recorded higher overall sales, achieved operational efficiencies, and benefited from reduced production costs. This was partly due to the depreciating renminbi, which helped offset the challenging market conditions.
Q.What contributed to the decline in sales for the Saint Honore bakery business?
What contributed to the decline in sales for the Saint Honore bakery business?
The bakery business experienced a decrease in turnover primarily because of reduced sales of festive products. This led to a 2.5 percent drop in turnover, reaching HK$1.092 million for the year.
Q.How many Circle K stores does Convenience Retail Asia operate in Hong Kong?
How many Circle K stores does Convenience Retail Asia operate in Hong Kong?
Convenience Retail Asia operated 383 Circle K stores in Hong Kong by the end of last year. This number reflects a slight decrease of one store compared to the previous year's total.
Q.What was the main reason for the growth in the 'developing business' segment?
What was the main reason for the growth in the 'developing business' segment?
The 'developing business' segment saw a 36 percent increase in turnover, reaching HK$105 million. This growth was mainly driven by the expansion of the Zoff eyewear store network during the period.
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