Chairman of MWG: Bach Hoa XANH will be profitable after restructuring the store system

The grocery retail chain closed around 400 stores in the first seven months of this year. The move is part of the plan to "regain what was lost" that MWG announced earlier this year.

The Bach Hoa Xanh chain stopped expanding its network to focus on revamping the new layout and arrangement, reviewing and dealing with inefficient stores, and removing 7 groups of ineffective products. This chain has currently completed the revamping of almost all its existing stores.

"It's true that we closed a few hundred points of sale. But what happens? Total revenue continues to grow," MWG Chairman Nguyen Duc Tai shared at a recent investor meeting.

By the end of July, Bach Hoa Xanh operated 1,735 stores. The average revenue of each store is about 1.3 billion VND per month. From March 2022 till now, this grocery retail chain's sale has increased continuously. Excluding the 4 peak months of social distance last year, the sale has recently hit a new record. Bach Hoa Xanh recognized revenue of VND 15,200 billion, contributing more than 18.6% to MWG's total revenue in the first seven months of 2022.

Previously, Bach Hoa Xanh aimed to build a retail chain with a "better customer experience than the wet market." Instead of comparing to other minimart competitors, MWG desires to hang the green logo on the premises next to the traditional market. Therefore, the strategy to accelerate the coverage is pursued by this business throughout 2017-2020. Sometimes, Bach Hoa Xanh opens a point of sale every day, recruiting hundreds of employees every month.

But now, this chain has changed its positioning from a "modern wet market" model to a "mini-supermarket." The above trend is said by Mr. Tai that customers will have the same shopping experience as supermarkets. He also acknowledged that there was a supply issue of fresh produce because of objective factors such as the weather. The company will focus on controlling input quality and maintaining consistent quality.

According to Mr. Tai, this chain will likely be profitable in the fourth quarter of this year. "This is an essential step for MWG. In 2023, The Group will stop contributing capital to Bach Hoa Xanh. Bach Hoa Xanh will generate profit to contribute to the development of MWG", he emphasized.

Currently, Mobile World and Dien May Xanh contribute nearly 80% of the total revenue for the first 7 months of 2022 of MWG. The new growth drivers of these two chains are the Apple store - Topzone and the ​​Dien May Xanh Supermini.

In the pharmaceutical retail segment, the gross profit margin of 365 An Khang pharmacies in the first half of the year remained above 20%. MWG also focuses on two new branches: retail of mother and baby products as well as retail of sports goods.

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