RetailAnalysis
20 March 2017
Malaysia: Aeon Big embarks on new strategy

Aeon Big, a hypermarket chain owned by Aeon Co Ltd, is consolidating its business and focusing on a single business format.

Store closures part of cost-cutting

Aeon Co Ltd, the parent company of Aeon Big, purchased loss-making Carrefour Malaysia in 2012. The banner was changed to Aeon Big after the takeover. The company has been struggling to turn a profit in the last few years. As part of Aeon's new company vision, the retailer is reviewing their business formats and will be shutting down three stores. Employees from affected stores will be deployed to other outlets. The whole process will be completed within the first quarter of this year. Aeon Big's managing director, Mayoshi Matsuda says, "the changes are part of our long term strategy to rebrand and reorganise our hypermarket chain to ensure higher returns while keeping daily operations at a manageable level." Matsuda is newly appointed to this position in November last year. He has been with Aeon group since 1983 and was previously the MD of department store Maxvalu Nagano.

Challenging period for Malaysian big box retailers

Introduction of Goods and Services Tax, depressed consumer spending, increased cost of operations and stiff competition have impacted retailers' performance in Malaysia. Established local retailer Mydin Mohamed Holdings Bhd posted its first loss in 57 years for financial year ended Mar 2016. It cited rising import costs and sombre sales as reasons for the poor result. Tesco Malaysia also announced plans to cut jobs and streamline its business in August last year. The retailer will be restructuring its store management to be more agile and and simpler. Growth will likely be focused in convenience format with 7-Eleven, FamilyMart and myNEWS.com adding stores over the next few years.

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