Supermarkets struggle amid consumption downgrade: association

The supermarket sector is facing significant challenges as a wave of store closures signals a deeper crisis within the city’s retail industry.

With consumption downgraded and operational costs rising, supermarket operators find themselves in a difficult transition period that may last well beyond this year.

The once-crucial lifeline during the Covid-19 pandemic, supermarkets have now become one of the “least benefited” sectors in the post-pandemic economy, according to Wong Man Wai, president of the Supermarket and Livelihood Food Association of Macau.

Consumers, increasingly driven by value-for-money decisions, are turning to mainland e-commerce and cross-border shopping. At the same time, government-backed consumption programs often exclude large local supermarkets, adding further strain.

“In the past, people avoided mainland goods. Now, they see them as better value,” Wong said in an interview with Macao Daily News.

Wong explained said that the industry is confronting two major hurdles: changing consumer behavior and a rapid reshuffling of business formats.

“Consumption has clearly downgraded,” the chairman said. “Consumers are opting for cheaper, diverse mainland products. In contrast, imported goods are expensive and harder to sell, which discourages supermarkets from stocking them.”

As the variety and affordability of mainland goods continue to draw local shoppers northward, the president noted that retailers face growing scrutiny about their pricing and product offerings. Additionally, business restructuring has accelerated.

Wong said that several large supermarkets have exited the market due to high overheads, including logistics, rent, and labor.

Many local supermarkets, particularly those in non-tourist districts such as the north district, report a sharp drop in business, with revenues down by as much as 30%. Small and medium-sized suppliers, reliant on supermarket orders, have also been hit hard, triggering a chain reaction of “retail shrinkage and supplier exits.”

Meanwhile, scholars say that the retail sector is in a period of restructuring and must adapt quickly to survive. “The market is undergoing a reshaping phase,” said one local economist. “Supermarkets need to upgrade their operations and sharpen their positioning.”

Differentiation is seen as key. Some local supermarkets are experimenting by focusing on niche products such as Japanese, Korean, or Southeast Asian imports, while others are expanding fresh food categories or offering delivery incentives.

Recent government data shows that the retail sector saw a significant contraction in the first quarter of 2025, with total sales dropping by 15% year-on-year to MOP17.58 billion.

The Industry and Commerce Association of Macau Northern District president Wong Kin Chong previously acknowledged the alarming closure rate of shops in the district, including the once-popular Atlantic Seafood & Dim Sum Restaurant in Iao Hon, warning that without significant changes, the business environment there is likely to deteriorate further.

In an interview with the Times, Wong expressed concerns about the less-than-ideal business environment in the northern district, highlighting that “there has been almost no change in the past 20 years.”