Hong Kong snack chain 759 to close stores, cut discounts as it faces stronger Japanese yen and reduced sponsorship
759 Store also plans to close at least 15 shops this year after giving the big supermarket chains a run for their money
Popular Hong Kong snack chain 759 Store plans to slash its special discounts from next month and shut down at least 15 stores this year, the first net decline since the brand was founded in 2010.
Chain founder Colis Lam Wai-chun said they could not afford to provide deep discounts as the recent appreciation of the Japanese yen had raised the purchasing cost of its Japanese products, while a huge drop in sponsorship fees from payment service companies this year was also squeezing profits.
The snack chain, which sources roughly 30 per cent of its products from Japan, is famous for offering below-market prices to customers, a strategy that won it market share from big supermarket chains over the years.
But the change of pricing strategy would result in a 10 to 20 per cent rise in prices for the chain’s members and customers using designated payment methods like MasterCard and electronic wallets, Lam said.
“We simply could not afford it any more,” said Lam, adding that operational costs had gone up significantly this year.