Best Mart 360 has opened the third of as many as 20 outlets planned for Macau and hopes to expand in the Greater Bay Area, as the Hong Kong-listed snack shop chain aims to grow its business after the social unrest and coronavirus outbreak cut into its bottom line.
“We have been renting shops in Macau, and will continue to open more stores in Macau,” Lin Tsz-fung, its chairman and co-founder, said in an exclusive interview. The snack chain opened its second store in Macau in June, and its first store in December.
“We hope to expand in the Greater Bay Area and test the waters in the Guangdong region. But it’s been difficult to set things up in the mainland as the border [with Hong Kong] remains closed,” Lin said.
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The company reported a 79.7 per cent decline in net profit to HK$12.1 million (US$1.5 million) for the financial year ending March, compared to HK$59.7 million in the previous year, according to their annual report published late on Thursday.
The company attributed the decrease in profit to the social movement in Hong Kong and the Covid-19 outbreak, which adversely affected the operations of its stores.
“Looking ahead, it is anticipated that [the] pessimistic business sentiment and notable pressure on retail sector in Hong Kong will span for [a] considerable period of time in [the] near term under the continuous threat of novel coronavirus infection until it is well-contained … and the possible re-ignition of the social unrest in Hong Kong,” Lin said in the annual report.
Best Mart 360, with some 104 branches across the city, has been one of the targets of anti-government protesters who accuse it of having ties to “Fujian gangs” that were said to have clashed with demonstrators in Hong Kong’s North Point district last August.
The company, some of whose directors are members of pro-Beijing organisations, has denied the allegation.
Guangdong province lifted its 14-day quarantine requirement for visitors crossing the Macau-Guangdong border on Wednesday. They must hold “green” health codes, which show that the user is healthy and not under quarantine, and test negative for Covid-19 for seven days before crossing.
The step is a move towards the eventual lifting of all restrictions for visitors from the province, who accounted for nearly half of all visitors to Macau last year.
Meanwhile, Hong Kong’s retail sector shrank by a third in May for the sixteenth straight month, according to the latest government figures.
A government spokesman said that retail sales continued to fall sharply in May from a year earlier, as inbound tourism remained at a standstill. He added that the business environment for the retail trade would remain difficult amid austere labour market conditions and travel restrictions in place.
“The weak domestic economy, combined with other factors such as local sociopolitical unrest and fragile job security, will likely see more residents save than spend,” consultancy CBRE said in their recent Hong Kong Retail Marketview report for the second quarter.
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