BJC cuts back on investment into 2023
In keeping with projections that the economy will take about three years to fully recover from the impact of the pandemic, Berli Jucker (BJC) has lowered its retail investment for the next three years.
Aswin Techajareonvikul, chief executive of the SET-listed consumer goods maker and operator of Big C hypermarkets, said yearly spending for Big C Supercenter will be cut to 5 billion baht a year during 2021-23 from an average of 7 billion baht in previous years.
"We've consulted several economists from Europe and Thailand, and all predict that the impact of the pandemic on Thailand and the world's economy will be prolonged over the next three years," Mr Aswin said. "We also cannot predict US trade policy after the presidential election, or the extent of the US-China trade spat."
BJC is engaged in the modern retail supply chain, operating modern retail stores and online stores; in the packaging supply chain, manufacturing, marketing and distributing packaging products, including glass containers, aluminium cans and rigid plastic containers; in the consumer supply chain, manufacturing, marketing and distributing consumer goods in food and personal care; and in the healthcare and technical supply chain, distributing products and services related to pharmaceuticals and pharmaceuticals.
BJC also operates other business units, such as retail in Southeast Asia, and is interested in mergers, acquisitions and new business development.
In 2019, BJC reported revenue of 174 billion baht and a net profit of 7.27 billion baht.
For the first half of this year, BJC said sales fell 5.4% year-on-year to 74.6 billion baht, with net profit sinking 47.7% to 2.08 billion baht.
Mr Aswin said Big C Food Place and Mini Big C will remain two priority retail formats to continuously open over the next three years.
"It will be quite difficult for Thailand's economy to get back to 2019 levels, and the industry is unlikely to be active over the next few years, or in the fourth quarter this year, making it a challenging time for us," he said.
The company is adjusting to cope with the change, which has affected customers, suppliers and tenants.
Pattaphong Iamsuro, chief commercial officer of Big C Supercenter, said the outbreak has changed customers' shopping behaviour.
Consumer demand is more complicated, with higher expectations and greater price sensitivity.
"Consumer spending power has not returned to pre-pandemic levels, but it has improved slightly from August," Mr Pattaphong said.
With prices top-of-mind for consumers, Big C launched a campaign from now until Jan 3, 2021, offering 10-40% discounts on 25% of all essential goods (totalling 5,000 products) at more than 1,600 Big C stores.
The company also cut the prices of 14 food items on the menu at food courts by 50%.
Mr Pattaphong said sales of dry goods at Big C are faring quite well, but fashion items are still feeling the pinch.