Ray of hope: Sa Sa HK’s sales improve with consumer sentiment boost – CEO
According to its third quarter (Q3) results for the 2022/23 fiscal year, beauty retailer Sa Sa reported that same-store sales in Hong Kong improved by 9.3% while online sales increased by 19.1% year-on-year.
Overall, sales recorded growth of 3.6% despite the retailer having seven fewer storefronts over the past year.
This coincided with the easing of social distancing measures in the market.
Company chairman and CEO Dr Simon Kwok said that sales in its home market “benefitted from the improving consumer sentiment and refreshed its product mix and launched effective theme-based promotions in the Christmas shopping season.”
Overall, the group’s retail and wholesale turnover decreased by 12.0% year on year.
Macau drags down performance
On the flip side, business in Macau was “severely hit” by a sharp increase in COVID-19 cases across the Greater Bay Area.
As a result, Sa Sa recorded a 30.2% year-on-year decline in retail and wholesale turnover in Macau.
“The Macau SAR government tightened its [COVID-19] test requirements for inbound travellers during the period which led to a significant decline in tourist visitors. We recorded a 30.2% year-on-year decline in retail and wholesale turnover in Macau SAR.”
The situation in Macau pulled the overall performance of Hong Kong and Macau down.
Retail and wholesale turnover in Hong Kong and Macau decreased by 6.9% year on year in Q3, while same-store sales decreased by 4.1% year on year.
China hampered by COVID-19
Similarly, COVID-19 in China weakened consumption and continued to weigh on Sa Sa operations there.
The pandemic outbreaks in China led to partial or complete lockdowns. This not only affected offline retail traffic but online as well, given that it severely disrupted its cross-border logistics arrangements.
The company said the challenges associated with COVID-19 were the “root cause” of the sales decline.
Sales and same store sales decreased by 42.4% and 21.4% respectively. The company did not disclose how much China’s online sales suffered but said it was a major contributor to the overall 21.8% decline.
“Pandemic outbreaks in various parts of Mainland China continued during the period, lowering foot traffic in our retail stores and prompting lockdowns in affected cities and towns in more severe cases.
“Lockdown measures have resulted in a significant increase in lost operating days for our stores during the period while the impact on the consumer sentiment is impacting both our online and offline business units.”
Lastly in Malaysia, the business grew by 28.1% and recovered to 92.3% of the pre-pandemic levels.
This was a reflection of the relaxation of pandemic measures since 1 April 2022, said the company.
The company has observed that Malaysian consumers have “returned to their usual shopping behaviour and patterns” and reported a successful holiday season in December.