After seeing China as the way forward last year, Japanese retailer Aeon has begun to pull back on expansion plans as consumption levels in the country are hit by the worsening economic climate.
Aeon, Japan’s largest supermarket group, said it would delay its target for 100 Chinese stores by two years to February 2012, and lower its to February 2012, and lower its ¥800bn (US$8.8bn) spending plan, according to Bloomberg.
“This is the toughest climate I’ve seen,” Aeon’s Chief Financial Officer Masaaki Toyoshima said. “It’s looking tougher by the month. With the slowing economy in China, 2012 is a more realistic target.”
China had presented an enticing opportunity for Aeon, whose sales in Japan have been performing badly and have hit the company with six quarters of declining income.
Chinese retail growth had, for the first 10 months of 2008, been around 20 per cent, but has since slowed to less than 5 per cent since November, Bloomberg reported.
Aeon is expected to post a ¥10-20bn (US$110-220m) net loss tomorrow for the nine month period ending in November.
No comments yet