A retailing backwater?

On the face of it, Hong Kong would appear to be a retailing backwater on the other side of the world. But nothing could be further from the truth ­ just ask the number of UK supermarket executives who regularly jet into the territory in search of new ideas. One of the first places many of them call is Park n Shop, the top food chain in Hong Kong. Owned by AS Watson ­ itself part of Hutchison Whampoa ­ the chain operates 205 stores in Hong Kong of which 50 are superstores. The company also runs 20 stores in southern China, and despite the fierce competition from global retailers, this is a region where it is aiming to be number one by the end of the year. In addition, it owns Hong Kong's top wine chain and the Great food hall. Chief executive Logan Taylor says that when he joined the business seven years ago the Park n Shop team set themselves the challenge of changing the way that people shopped for food in Hong Kong'. A couple of years later, Park n Shop overtook arch rival Wellcome to become the number one player ­ and, more recently, was able to see off the threat posed by Carrefour, which has now quit Hong Kong. In 2001 Park n Shop grew sales 11% in southern China ­ no mean feat given Hong Kong's retail market is experiencing 3% deflation. The secret, says Taylor, lies partly in the new store formats Park n Shop has developed ­ and which the British supermarketers are so keen to visit. Park n Shop's first generation superstores were all about creating a one-stop shop. Its generation two stores fused the best of the East ­ the flair, colour and theatre of the wet markets ­ with the best of Western retailing ­ mainly the quality of fixtures and hygiene standards. The chain's third generation format creates "mini worlds" at the front of the store to reflect the fact many consumers still shop traditionally. So you have a market for fresh foods, snack city, a wine cellar, a body zone and a non food area. Recently, Park n Shop has developed a new "female friendly" supermarket format. And it is working on a fourth generation superstore that will place even more emphasis on food to go. Taylor likens the company's frenetic pace to the Ferrari principle of never resting on the success of the latest model of car. "We were a supermarket company and are now a multi-format company with everything from supermarkets to three kinds of superstores and a culture of continuous improvement," he says. A couple of other things underpin the Park n Shop business. On the consumer side, its Fresh Check promise on food hygiene and its Pricewatch campaign have gone down well. Behind the scenes, the company has invested heavily in IT and distribution. Taylor recently announced he was retiring and returning to the UK, where he will help AS Watson with special projects. It is unlikely he will be taking it easy for too long, given the group is expanding rapidly in Europe. It already owns the Savers health and beauty chain in the UK and is this country's largest supplier of office water coolers. {{COVER FEATURE }}