Typhoon dulls Sa Sa sales growth
Sa Sa sales growth in Hong Kong and Macau were “severely affected” by the typhoon in September – but they still surged nearly 10 per cent during the second quarter.
Super typhoon Mangkhut, which reached Signal 10, caused widespread damage and led to the closure of offices and schools, and was followed by further inclement weather later in the month.
Sa Sa CEO and chairman Simon Kwok said Mangkhut had “a serious impact” on local transportation and store traffic.
“Sales performance in Hong Kong and Macau was severely affected and declined by around 20 per cent for one full week, and sales weakness lingered for another week although the impact was not as significant,” he said in a stock exchange filing.
“As a result, the sales of the whole month of September were flat.”
The weather – together with weakened consumer sentiment due to the continuing fluctuations in both RMB exchange rate and stock market under the shadow of the Sino-US Trade War – resulted in slower sales growth in the second quarter compared to the first.
Group-wide retail and wholesale turnover in the three months to September 30 were up 8.5 per cent. Hong Kong sales rose 9.6 per cent while same-store sales rose 7.1 per cent.
Kwok said double-digit growth in mainland visitors led to a 16.7 per cent increase in transaction volume from tourists in its stores in the two territories.
“Although the number of transactions of local customers fell slightly by 2.1 per cent, the overall transaction volume still recorded a growth of 7.2 per cent. However, the average sales per transaction of local and mainland tourists demonstrated a converse movement. The average sales per transaction of local customers increased by 2.8 per cent while that of mainland tourists dropped by 2 per cent,” he said.
Kwok remains optimistic about Sa Sa sales growth in Hong Kong and Macau through the rest of the year and beyond.
“Since the launch of the Hong Kong Section of the Express Railway Link on September 23, the group’s stores located in the Hong Kong West Kowloon station and the neighbouring Tsim Sha Tsui district have been reporting satisfactory sales performance. The launch of the Hong Kong-Zhuhai-Macau Bridge, the completion of various mega infrastructure projects within the Greater Bay Area in the coming two to three years, together with the supportive policies for the movement of talents in recent months will facilitate the flow of people, goods, capital and information in the region.
“The retail industry in Hong Kong has already started to enjoy higher traffic and the group will continue to leverage on its strength to capitalise on these rising opportunities in the future,” said Kwok.
Outside Hong Kong and Macau, Sa Sa sales growth in both retail and wholesale reached 2.8 per cent.
Post quarter, the group’s retail sales in Hong Kong and Macau recorded an increase of 7.4 per cent during the National Day Golden Week Holiday from October 1 to 7, while same-store sales increased by 2.8 per cent. The number of transactions increased by 10 per cent, while the average sale per transaction dropped by 2.4 per cent.