njoyed a sales increase of 6.1 per cent over the corresponding period of 2021. This was accompanied by a gross profit margin increase from 15.1 per cent to 16.5 per cent and a net profit margin after tax of 3.4 per cent, compared with 2.0 per cent in the same 9 months a year ago. Third quarter gross profit was particularly strong, coming in at 16.9 per cent.  But the latest quarter brought with it some not so good news too: sales growth dropped off to an anemic 1.5 per cent. Moreover, even that was driven by new store openings because same-store sales fell by 2.4 per cent. The weather hasn’t been helpful, with an unusually intense rainy season causing catastrophic flooding in parts of Thailand, preventing normal movement and displacing tens of thousands from their homes.  The third-quarter decline in same-store sales followed six months of growth, and represented a regression back into the same negative pattern of the two years beginning with the third quarter of 2019 when same-store sales fell for 12 consecutive quarters. The declines during this period — primarily due to lockdowns and restrictions on tourism — were so heavy that a strong rebound would normally be expected, but that hasn’t materialized. The cumulative three-year ‘stack’ (the sum of same-store sales growth for the third quarter of 2020-22) is now a staggering decline of almost 30 per cent. True, the weather is still not completely cooperating but that excuse is wearing a bit thin. Big C has a format for everyone Big C, which is owned and operated by Bangkok-headquartered Berli Jucker (itself a subsidiary of TCC Group) has a varied fleet of store formats, led by its convenience store Big C Mini of which there are 1,456 scattered around Thailand, Cambodia and Laos. In Thailand, they compete mainly with 7-Eleven, Family Mart, and Lotus’s convenience formats. Big C also operates supermarkets and pharmacies but its real flagship format is the hypermarket, of which it has 154, accounting for a hefty 59 per cent of sales. There are also more than 30 Big C hypermarkets in Vietnam but these are owned by Central Group and are being rebranded as Go! Big C’s hypermarkets go head to head with Lotus’s hypermarkets, formerly owned by Tesco before the UK company sold out its business in Southeast Asia to Charoen Pokphand Group. Despite Tesco’s departure and the new owner’s quick rebrand to the somewhat awkward Lotus’s moniker, the Tesco name hasn’t gone quietly and many locals still refer to the store fondly as Tesco Lotus.  After being acquired by Charoen Pokphand, Lotus’s was merged into its Siam Makro subsidiary, and this has been, competitively speaking, another headache for Big C because Makro is the biggest cash-and-carry operator in Southeast Asia and has an enviable supply chain to draw on. The addition of Lotus’s enabled Makro to scale up its existing supply chain and freshen up Lotus’s store shelves, improving the quality and range of the latter’s food products, particularly in the fresh food department. This is evident across all Lotus’s formats, including the convenience stores that now feature goodies Big C Mini either doesn’t have or doesn’t have in the same quality and variety, such as fresh meat and fish. Big C is trying hard, although in comparison to Lotus’s, some of its hypermarkets are beginning to look dated and in need of renovation. The problem with having a large number of stores in a variety of formats spread across many metropolitan and secondary markets is that they require immense capital expenditures to keep them competitive. The company aims to renovate 90 of its hypermarkets over the next few years, which would be a step in the right direction. Going public, as foreshadowed by the IPO rumour, would help provide the capital for the needed sprucing up. The shopping centres need a facelift too It isn’t just the hypermarkets themselves that need a facelift. Big C operates on what its parent company calls the ‘dual retail-property’ model, which in essence means that its hypermarkets are not freestanding but rather anchor smallish shopping centres that the company also owns. It leases the shop space to junior anchors and small tenants that pay Big C rent. Big C’s total rental portfolio is approximately one million square metres of space, generating about US$350 million in 2021.  The centres are configured according to roughly the same template: a typical one has about 40 inline stores arranged around the outer perimeter of a loop, race-track style. The inline stores include restaurants, apparel, footwear, jewellery and personal services such as eyewear, banks and postal services. These stores are complemented by dozens of small kiosks and carts that sell every kind of personal accessory under the sun. The pricing is sharp and can often be as low as what can be found in a traditional street market. A large food court occupies much of the space inside the loop. There are also the junior anchors, such as a cinema and game zone. The Big C hypermarket itself sometimes sits adjacent to this big loop of stores, and sometimes atop them on the second level. All of this space, not just the hypermarket, can get to be an eyesore if it doesn’t benefit from constant reinvestment. This is another part of the problem that a public launch and access to capital markets might help to solve. Aside from its physical retail space, Big C is also trying harder with its omnichannel push, and recently introduced a new Big C app, called Big C Plus, which the company says is faster and easier to use than its predecessor and is enjoying an improved conversion rate. It is also expanding its vending machine network. These innovations are clearly necessary, but they are not sufficient: Big C is really its stores, and if it doesn’t want to fall further behind its competition, the stores are where the serious work has to get done.