It now has more outlets than McDonald’s in Hong Kong.
Snack-food retailer 759 Store, which you can find in almost every MTR station, has reported that profit grew 16 percent to HK$27 million last year, thanks to an expansion drive that increased the number of its stores 30 percent to 249.
It was an electronics component maker until five years ago when chairman Lam Wai-chung boldly turned around its business focus.
Now it’s a full-fledged retailer that sells snacks, frozen food, health food, baby food and even wonton noodles. And, yes, it runs five restaurants.
Known for offering hefty 30 percent discounts on its goods, 759 Store recorded a turnover of HK$2.13 billion, up 48 percent from the previous year.
But the fact remains that the company belongs to a sluggish retail sector that is reeling from soaring rents.
In its annual report, 759 acknowledged that shop rental costs would remain high.
It said: “The founder deeply understood that property rent would be hard to come down so that he completely ruled out the possibility of cost reduction caused by waiting for property rent to come down. It could be described in Cantonese as ‘唔使預’, meaning ‘no need to take into account’.”
As such, the company would slow down its pace in opening new stores, which it described as “large grocery stores”, or, alternatively, “small department stores”.
As of last year, 759 was leasing about 431,000 square feet of property or about 1,733 square feet per store.
The high rents notwithstanding, the company is enjoying huge demand with 1.15 million store card members visiting its outlets every four weeks.
Going forward, 759 expects to import more alternative foreign brands. Cereal and oil would be big items while snacks will drop from the current 60 percent to below 50 percent.
Japan may still be the biggest source of its imports, but Korea and Europe are fast catching up.
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