The big two supermarkets will continue unchallenged for several years, commentators predicted yesterday as Guangnan (KK) became the latest in a string of competitors to fall by the wayside.
In December, home delivery supermarket chain adMart admitted defeat, while in September French chain Carrefour closed - leaving Wellcome and ParknShop the major players.
Wellcome has 237 stores, while rival ParknShop has 189 outlets. Both have roots in Hong Kong going back to the 1960s.
New entrants seem unlikely to emerge because of the SAR's small and competitive market, the challenges of finding the right property and changes in China, said Priscilla Lau Pui-king, an economist and associate professor at Hong Kong Polytechnic University. Poor management - dozens of former Guangnan (Holdings) managers have been charged, and some jailed, over $1.8 billion in alleged scams - had played a role in the supermarket's demise, she said.
The mainland-funded Guangnan took a 70 per cent stake in Kitty & Kettie Supermarket in 1996, but the 39-store chain, re-named Guangnan (KK), became a 'black hole' for its parent company, Guangdong Enterprises group.
An associate professor of marketing at Baptist University, Cheung Wah-leung, said Wellcome and ParknShop's combined 70 per cent market share could grow to more than 80 per cent with the latest closure.
Another retail industry expert said competition between the two major players would remain strong and price rises were unlikely. The industry was operating in a difficult environment, with high rents, increasing red tape and retail spending still lower than it was in 1995, he said.