Page 88 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

(2) Food Segment
The majority of Hardline segment merchandise is sold on
a credit basis, including private lables, with the balance Central Retail’s Food segment focuses on capturing the
as consignment sales. Private labels, including direct latest trends in food and consumer goods by offering
import products under private label brands, accounted a wide selection of high quality food, grocery, organic
for 10%, 11% and 13% of total sales from Hardline Thailand products, health products and other products and
in 2019, 2020 and 2021, respectively. Private labels have consumer staples through supermarket, hypermarket
been a strong driver of growth in Hardline segment in and convenience store formats. In addition, Central
recent years. Retail leases retail space and generates rental income
through retail plazas in Thailand and Vietnam. Each of
Hardline segment’s EBITDA amounted to THB 4,533 food segment retail plazas is anchored by a hypermarket
million, THB 4,220 million and THB 7,683 million for and a mix of other offerings including Central Retail’s own
2019, 2020 and 2021 respectively. retail banners, restaurants and third-party outlets with
various merchandise and service offerings.
In Hardline segment, retail prices are generally set
by suppliers. Central Retail may be able to charge a Merchandising at supermarkets and hypermarkets
premium for popular brands though. Central Retail is driven by the tastes and preferences of the local
earns its highest margins from its private label brands, population. Supermarkets and hypermarkets can be
which can help boost overall margins, and Central Retail found throughout Thailand and in the key areas of
seeks to offer a variety of services in conjunction with Vietnam, so the selection of groceries and non-food items
merchandise sales to make it easier for customers to at Central Retail’s stores can vary widely, reflecting the
make purchases, thereby driving sales. Central Retail’s diversity of the customer base. Likewise, Central Retail’s
home improvement formats tend to have more choices in-store displays, store formats and overall presentation
of suppliers than other formats, which Central Retail can vary based on location in order to more closely
believes improves its bargaining position and makes it match the expectations of customers in the communities
easier to manage margins. Consumer electronics tend to where Central Retail’s supermarkets and hypermarkets
include more “big ticket” merchandise and more premier are located. For example, in Vietnam, customers in the
brands, and Central Retail believes that Power Buy’s and north are generally more driven by seasonality and
Nguyen Kim’s reputation for reliability provide customers brand, whereas customers in the south are generally
with peace of mind should there be any issues with their more responsive to promotions. Merchandising is also
merchandise after purchasing, thereby driving sales. driven by immersive shopping, when dine-in options
Thai Watsadu and Baan & Beyond / BNB Home also help drive take-out and other grocery sales.
generate revenue through leasing space to third party
vendors in their stores.

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