Page 100 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

(3) Fashion Segment
A close working relationship with international and local
suppliers is particularly important in Food segment given Central Retail’s Fashion segment focuses on apparel,
the importance freshness to customers. Central Retail shoes and accessories, cosmetics and household items,
holds regular meetings with suppliers on a monthly or sold primarily through department stores and specialty
quarterly basis depending on their contribution to its stores formats. Central Retail also leases retail space
business. Supporting local OTOP and SMEs is also an and generate rental income in this segment through
important consideration for Central Retail. In all cases, department stores and through retail plazas, which
Central Retail expects its suppliers to understand its Central Retail positions as lifestyle centers offering
business direction and to be committed to drive growth affordable merchandise to customers in second-tier
together with Central Retail. Central Retail normally provinces which are rapidly urbanizing but are still
consults them as its partner and share with them certain underserved by large-scale shopping mall. Each of
plans and strategies for its business. retail plazas is generally anchored by department store
and supermarket along with a mix of other offerings,
All of Food segment suppliers have to meet Central Retail’s including Central Retail’s own retail stores, restaurants,
standards with respect to costs, product specifications, and third-party retail stores with various product and
marketing plans, production capacity and replenishment service offerings.
and logistics. Central Retail also requires that they adhere
to ethical business practices and comply with food safety Merchandise mix in Fashion segment caters to the diverse
standards, laws and regulations. They are responsible preferences of customers, offering a wide variety of
for certain customer issues in accordance with consumer merchandise ranging from international luxury brands to
protection laws. general brands at a variety of price points. Central Retail
also provides a variety of shopping experiences across
Pricing for consumer goods depend on demand and its differentiated selection of fashion retail banners, from
supply in each region. Central Retail constantly monitors everyday shopping to luxury experiences. Merchandise
market prices to ensure its own prices are competitive. mix also includes a large selection of private labels such
Central Retail seeks to match pricing for generic or as Defry 01, Expressions, Alumnus, Esquire, Minimono,
national third-party brands but generally target lower Undergear, Angel Baby, Angel Kids, Central Home,
price points for its private label products. Central Retail Cuizimate, Haven, Just Buy, Pacific Union, Thompson,
may charge higher prices as a result of higher logistical Proofs, F.O.F (Freedom of Fashion), etc, which Central
costs or for premium market positioning for certain items Retail has conceived and developed in-house. Central
or retail banners, such as Central Food Hall. Central Retail has been increasing the proportion of private labels
Retail also frequently uses promotions to drive customer and imports in its merchandise mix as part of its plan to
traffic, and generally attribute approximately 30% of help drive margin improvements in the future. Central
Central Retail’s sales to promotional pricing. For Big C / Retail also engages third party brands for licensing
GO!, go! and Lan Chi Mart business in Vietnam, Central rights, which allows Central Retail to market products
Retail aims to provide its customers with great value for that Central Retail has designed and developed in
their money on groceries by emphasizing local sourcing. collaboration with international partners to leverage
their brand appeal, such partners include Lee, Wrangler,
Jockey, Hush Puppies and Sanrio. In addition, Central
Retail offers merchandise under exclusive distribution
arrangements, where third party labels agree to sell their
items in the store only. By using a combination of these
arrangements in the merchandising, Central Retail is
able to strategically adjust its brand and merchandise
mix within different stores to account for variances in
income levels and customer demographics across its
retail network.

100 Annual Report 2021 (Form 56-1 One-Report)