Retail recovers, WinMart chain begins to make profit

According to data from the General Statistics Office, retail sales of goods in the first 7 months of 2024 are estimated at VND 2,801.1 trillion, accounting for 77.3% of the total and increasing by 7.4% over the same period last year (excluding price factors, the increase was 4.3%).

Of which, food and foodstuff group increased by 10.7%; household appliances, tools and equipment increased by 11.1%; garment increased by 9.1%; means of transport (excluding cars) increased by 3.4%; cultural and educational items increased by 11.2%.

The business results of retail enterprises have all recovered compared to the low base level of the same period last year. In particular, with the largest point of sale system in Vietnam, the WinMart chain of Masan, continues to maintain its "form", reaping positive revenue and profit figures.

WinMart chain to be profitable from June 2024

In terms of efficiency, the WinMart chain began to have positive profits from June 2024 after restructuring the store system and continuously applying solutions to improve efficiency. In the second quarter of 2024, WinCommerce (the company operating the WinMart/WinMart+/WiN chain) recorded a 9.2% increase in revenue over the same period, reaching VND 7,844 billion across the entire network.

This is the result of upgrading and improving WiN stores (aimed at urban consumers) and WinMart+ Rural (serving rural consumers). These two store models have achieved outstanding efficiency compared to the traditional model with growth rates of 6.3% and 10.7% respectively in the second quarter of 2024 compared to the same period.

WinCommerce (WCM) growth accelerated to 6.8% in Q2 2024 and 9.7% in June alone, driven by increased store traffic, a clear sign of a sustainable path to profitability in the coming period.

The Winmart system is expected to continue to be profitable in the last two quarters of the year with revenue expected to maintain a growth rate of more than 9%. Bao Viet Securities' analysis report said, "In the first half of 2024, WCM will focus more on converting existing WinMart+ stores to WiN in urban areas and WinMart+ Rural in rural areas.

These two new store formats, especially WinMart+ Rural, have shown impressive performance, with each store’s LFL (stores opened before 2023) revenue growth rate higher than the chain’s average. These two new formats have even generated net profits at LFL stores in the first half of 2024.” This shows that WCM has found a winning model, ready for profitable expansion.

In 2023, WinCommerce (WCM) completed its restructuring and returned to a point-of-sale expansion strategy; focusing on separate models for each region and customer segment.

As part of the “Point Of Life” strategy, the WiN chain of stores focuses on urban consumers, achieving 7.3% sales growth; WinMart+ Rural stores in rural areas focus on providing a wide range of quality low-cost products, achieving 11.2% sales growth. WinCommerce is leading the market position with over 50% of the number of modern retail points of sale.

Retail chains expand to catch the wave of consumer recovery

In addition to developing in urban areas, WinCommerce also focuses on developing in rural areas. With 65% of the population living in rural areas and a market size of about 50 billion dollars, this is a fertile land for modern retailers to exploit.

As of June 2024, WCM operates 3,673 points of sale, opening 40 new stores since December 2023. WCM plans to accelerate the pace of store openings in the second half of 2024, aiming for 4,000 points of sale nationwide this year.

With a low base from 2023, it is forecasted that retail businesses will continue to maintain growth in the second half of 2024, however, each retail business has its own story to expect growth.

Masan targets revenue of VND60,000 billion for the WinMart system by 2028 with a profit margin of about 3-5%, based on a scale of about 8,000 stores/supermarkets. The average growth rate is 15% in 5 years, compared to 2023 revenue of about VND30,000 billion.

According to Euromonitor, the size of Vietnam’s modern retail market will increase to 20 billion USD in the next decade. This means that the market still has many opportunities for retail businesses to expand their operations and increase their revenue.

With the WinMart system, thanks to the advantage of the synergy from Masan Consumer, the leading enterprise in the consumer goods market with the brands Chinsu, Omachi..., the company has the opportunity to grow strongly along with the recovery of consumer purchasing power.

In Vietnam, WinCommerce is the only modern retailer with a leading advantage in terms of point of sale scale, inheriting the strength of consumer goods production from Masan Consumer - a subsidiary of Masan and owning Supra - a self-built logistics company. Established in 2022, Supra supports the WinCommerce retail system to reduce costs by 11%.

In the second half of 2024, WinCommerce continues to focus on achieving after-tax profitability by accelerating LFL growth to 8-9% YoY, while accelerating store openings to ~100 new stores per quarter. WCM will continue to strengthen its position in rural areas with the WinMart+ Rural model.

Source: https://laodong.vn/kinh-doanh/ban-le-hoi-phuc-chuoi-winmart-bat-dau-co-loi-nhuan-1382953.ldo