‘The worst is over’: COVID-19 outbreak in HK forces Sa Sa to lose 480 business days in Q4

The group did not specify how many stores or how many staff were affected by the COVID-19 outbreak.

On top of that, social distancing measures impacted retail traffic, causing sales growth slow to 9.4% in the fourth quarter from 14.3% in the third quarter. Compared to FY2019, total turnover decreased by 70.6% and 4.7% on a year-on-year basis.

These measures spurred its online business in Hong Kong, and the firm recorded a fourfold year-on-year sales increase on its Hong Kong websites.

However, the pandemic affected its warehouse operations and cross-border logistic arrangement in March. This resulted in a low single-digit year-on-year decrease in sales for the online business outside of Hong Kong.

Overall, the total turnover for its online business increased by 27.2% year on year and 100.8% compared to FY2019.

In China, the worsening of the COVID-19 situation resulted in shuttered stores and dampened consumer sentiment.

This led to a 23.1% year-on-year decrease in same-store sales. Total turnover declined by 6.5% year on year and by 2% compared with FY2019.

The poor sales performance in China also forced the company to halt any new store openings and instead focus on enhancing the operational performance of its existing stores and online business.

The outbreak in China also affect Macau where the absence of tourists saw a decrease of 22.9% in retail sales. According to the firm, sales in Macau value in March ‘almost reached’ their lowest point in the financial year.

The group saw some good news in Malaysia, where the ‘living with COVID’ strategy adopted by the government helped the firm slightly. Turnover increased by 11.5% year on year, up from 4.4% in the third quarter.

“In the core markets of the Hong Kong and Macau SARs, the worst of the fifth wave of the pandemic is believed to be over and the social distancing measures will likely be gradually relaxed,” ​said chairman and CEO Dr Simon Kwok.

Moving forward, the firm expects the Consumption Voucher Scheme launched by the Hong Kong SAR Government to help facilitate the recovery of the retail market.

“In the next few months, the group will launch promotional discounts to capitalise on the Consumption Voucher Scheme to stimulate sales, while actively expanding its product portfolio to attract new customers,” ​said Kwok.

Kwok highlighted the pandemic and global political instabilities still pose uncertainties for the business and have laid down measures to counter this.

“In the next twelve months, the group plans to continue rationalising loss-making stores that are incurring exorbitant rents, as well as to further build its online-merge-offline operations. ​

“Such efforts will enable Sa Sa to leverage the synergies between its physical stores and online platforms to provide customers with a more pleasant and personalised omnichannel shopping experience, driving Sa Sa’s next stage development.”​