Profits at major Japanese retailer Aeon fell sharply in the six months ended in August. The company attributes this to wage hikes for its employees and lower product prices.
Net income for the first half of fiscal 2024 was 5.4 billion yen, or just over 36 million dollars. That’s a decline of more than 75 percent from the same period last year.
This comes despite a 6.1 percent increase in sales for the supermarket operator. Aeon says pay increases lifted personnel costs by 188 million dollars.
Its bottom line was also affected by price cuts aimed at attracting budget-minded consumers.
Aeon President Yoshida Akio said price competition is getting fierce amid material cost increases. He said there is a need to change the company’s business structure assuming that costs will continue to rise.
Meanwhile, convenience store chain FamilyMart said its net income between March and August almost doubled.
It rose 98 percent from a year earlier in yen terms to about 440 million dollars.
The chain attributes the outcome to strong sales of high-margin clothing items and food, as well as capital gains from its business restructuring in China.