DFI Retail Group reportedly plans layoffs amid cost pressures

DFI Retail Group, the operator of Wellcome, Mannings, 7-Eleven, and IKEA in Hong Kong, is reportedly planning layoffs to address rising operational costs and a sluggish retail market.

Group chief executive Scott Price stated in an internal email that the group will implement measures to streamline operations, including layoffs, restructuring support functions, clarifying job roles, and outsourcing certain positions, according to SCMP.

Meanwhile, the number of affected employees was not disclosed, according to the report. Price stated that over the past five years, the costs of the group's support functions have increased significantly, leading to slower decision-making, higher product costs, and ultimately, higher prices. 

Price emphasised that these measures are part of a structural adjustment, not aimed at individual performance, and are intended to meet customer expectations for lower prices while ensuring the sustainability of the business.

MARKETING-INTERACTIVE has reached out to DFI Retail Group for a statement. 

As a member of the Jardine Matheson Group, DFI Retail Group and its associates operate over 7,500 outlets and employ over 83,000 people, according to its official website. Its brands encompass health and beauty, convenience, food, home furnishings, restaurants, and its loyalty app, yuu. 

The group reported a mid-year performance shift from profit to loss this year, with a loss of around US$38 million and a slight decline in revenue to US$4.387 billion. Last year's overall performance was also challenging, with revenue down 3% to US$8.869 billion and a loss of US$245 million, according to its financial summary. 

On the other hand, DFI Retail Group's competitor AS Watson, which also operates a variety of retail formats in Hong Kong, has group CEO Malina Ngai telling local media outlets such as HKEJ and HKET that, as a Hong Kong-based company, it recognises the need for extra effort during challenging times. The group is collaborating with owners, suppliers, and partners to deliver products and offers that meet customers' diverse and changing needs while ensuring business growth.

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