AdMart may have closed down, but the shadow of Jimmy Lai Chee-ying still hangs over Hong Kong's supermarket sector.
The price war launched by Mr Lai's ill-fated online retailer left a hole in the accounts of Dairy Farm International Holdings yesterday.
While most of the group's US$194.5 million net loss stemmed from write-downs on poorly performing Australian assets, its Hong Kong supermarket chain, Wellcome, also took a hit.
The Jardines unit reported a US$32.2 million operating loss for its North Asia segment, which includes the SAR, mainland and Taiwan. Considering that figure included strong performances from its 7-Eleven convenience and Mannings drugstore chains, the supermarket numbers must have been ugly indeed.
Just as revealing as the bare figures was the rather bleak language used by Dairy Farm in describing its supermarket operations. The combined economic and competitive conditions faced by Wellcome Hong Kong 'could not have been more difficult', it said.
The food retail industry had been 'engaged in a deep and prolonged price war, which has proved extremely costly to all market participants'.
The company's principal competitor (ParknShop) had increased its network by more than 700,000 square feet since the end of 1997, while 'a global competitor' (Carrefour) opened 399,000 square feet of hypermarkets.
