August 9, 2018 / 1:48 AM / 9 months ago

Hypermarket chain Sun Art's H1 same-store sales drop, turnover flat

HONG KONG, Aug 9 (Reuters) - Sun Art Retail Group Ltd’s first-half same-store sales dropped at a steeper pace than the year-earlier period, reflecting the competitive challenges facing China’s top hypermarket operator.

The retailer, backed by China’s biggest e-commerce company Alibaba Group Holding Ltd, said late on Wednesday its first-half same-store sales fell 1.56 percent, compared with a 0.9 percent decline a year ago.

Its net profit edged 0.1 percent higher to 1.758 billion yuan ($257.2 million) for the six months ended June, while turnover held largely flat at 54.06 billion yuan.

Gross profit margin inched up 0.6 percentage points to 23.9 percent from a year earlier.

“In the future, our bricks-and-mortar stores will work on the integration of both online and offline channels,” the company said in a statement.

Sun Art said its fresh food service, the Taoxianda initiative, in partnership with Alibaba Group had been expanded to 165 brick-and-mortar stores, covering 93 cities within 17 provinces and municipalities nationwide.

Sun Art rolled out the initiative in March to deliver orders in an hour, within the three-kilometer radius of a store, and to digitize store operations and raise their efficiency.

The group, which has a total of 472 hypermarkets in China, opened 11 new hypermarket complexes in the first half. Its original plan was to add 35 new stores in 2018. ($1 = 6.8344 Chinese yuan) (Reporting by Donny Kwok; Editing by Amrutha Gayathri)

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