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As virus-wary shoppers opt for online purchases, retailers pay the price

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LOS ANGELES(Reuters) – Online sales may be a saving grace for pandemic-battered retailers with fewer shoppers in their stores. But many retailers, from department store chain Macy’s Inc to essential retailer Target Corp, are grappling with higher expenses related to e-commerce.

Retailers often use the more lucrative in-store sales to subsidise hefty e-commerce costs, ranging from marketing to fulfilment and shipping. Companies don’t usually break out those expenses, which of late have been overshadowed by massive write-downs for unsold inventory and lower online profits.

Margins for the hardest-hit nonessential retailers – including mall-based clothing chains – on average are this year likely to be about half what they were in 2019, according to credit ratings agency S&P Global. The shift to e-commerce probably erased a couple of percentage points from company margins, Sarah Wyeth, senior director for retail and restaurants said.

When it comes to online sales, “retailers have always given away too much margin,” said Neil Saunders, managing director at GlobalData Retail. “Now that more stores are closed and online penetration is higher, losses have exploded.”

Historically, sales in stores accounted for more than 80% of all retail sales in the United States, according to eMarketer. E-commerce as a percentage of retail sales, excluding gas and auto, zoomed to 22.9% in the second quarter after the pandemic accelerated the shift to online shopping, said Andrew Lipsman, principal analyst at that research firm.

As of mid-July, the spike of COVID-19 infections around the United States has spurred states such as California to shutter indoor shopping malls – further endangering in-person transactions, which are generally lower cost.

Almost 18% of Macy’s stores are in California.

On July 1, the retail operator, which also owns Bloomingdale’s store, said gross margin tumbled to 17.1%, down more than 21 percentage points from a year earlier.

Macy’s CEO Jeff Gennette said the chain was seeing “a noticeably worse trend in brick-and-mortar” stores in Texas, Florida and Arizona, where infections are setting new records.

“Conversely, in those particular states, the dot-com business is improving,” he said on the heels of posting a staggering $3.58 billion loss for the quarter that ended May 2.

Fast-forward, tighter squeeze

RSR Research co-founder Paula Rosenblum estimated that typical online orders cost retailers roughly 10-15% more than purchases in stores, where shoppers do the work of selecting items and transporting them home. Her calculation does not include returns, which are more common with e-commerce purchases because shoppers don’t see, touch or try on products beforehand.

While Amazon.com Inc, Walmart Inc and other deep-pocketed companies can spend heavily on projects like automation and inventory tracking to reduce e-commerce expenses “a lot of companies are on the ropes and can’t afford to,” said Hilding Anderson, senior director of strategy and consulting at Publicis Sapient.

Target stayed open throughout the early stages of the pandemic, but its gross margin fell 450 basis points in the first quarter, when digital sales surged 141%. The retailer blamed the deterioration on apparel write-downs, a shift to lower profit sales of food and essential items, and rising digital fulfilment and supply chain costs.

“Our first quarter digital volumes weren’t anticipated for another three years … It was an extreme test of our model and our team,” Target Chief Operating Officer John Mulligan said on a May 20 conference call.

Meanwhile, FedEx Corp and United Parcel Service Inc have a lock on e-commerce delivery, but lost a significant amount of high-margin business when offices shuttered. Those carriers are raising their prices to offset the explosion in higher-cost home deliveries of everything from food to furniture and electronics and exercise equipment.

“The margin squeeze might go on for a while,” said Gabriella Santaniello, founder of retail research firm A Line Partners. “It’s going to be really hard to put the genie back in the bottle.”

Reporting and photo: Reuters

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SATA 2025 announces partnerships; confirms Hotelier Maldives, Maldives Insider as Media Partners

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Hotelier Maldives and Maldives Insider have been confirmed as official Media Partners of the South Asian Travel Awards (SATA) 2025. The announcement was made during a signing ceremony held at Hulhulé Island Hotel, Maldives, where SATA unveiled its distinguished partners for the 9th edition of the annual awards.

Now in its ninth year, SATA has become a key platform for recognising excellence in South Asia’s tourism and hospitality sector. The partnership with Hotelier Maldives and Maldives Insider will strengthen the awards’ regional visibility and ensure extensive coverage of the event across Maldives and beyond.

This year’s awards ceremony will take place from 19th to 20th September 2025 at Cinnamon Grand Colombo, Sri Lanka, bringing together industry leaders, stakeholders, and innovators from across South Asia.

In addition to the media partnership, SATA 2025 also announced its corporate partners. Honda Marine has been named the Platinum Partner, while The Hawks, Velana International Airport, and Allied Insurance Company of the Maldives join as Gold Partners. Renaatus Realty has been confirmed as the Silver Partner, and Hulhulé Island Hotel continues as the official Hospitality Partner in the Maldives.

Speaking at the ceremony, SATA organisers noted that the strong lineup of partners reflects the growing importance of collaboration within the tourism and hospitality industry. With the support of its partners, SATA 2025 aims not only to celebrate outstanding achievements but also to foster long-term cooperation and sustainable growth in the region’s tourism sector.

The awards are endorsed by leading national tourism bodies and associations across South Asia, including the Sri Lanka Tourism Development Authority, Nepal Tourism Board, Visit Maldives Corporation Limited, and several travel and hotel associations across the region.

This year’s evaluation process was conducted by a panel of nine jury members representing different countries, including tourism leaders from India, Sri Lanka, Bangladesh, Nepal, Bhutan, Spain, and the Maldives.

Through partnerships with media outlets such as Hotelier Maldives and Maldives Insider, SATA 2025 will ensure broad engagement across key markets, strengthening its position as one of South Asia’s most prestigious hospitality and travel award platforms.

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BBM, Mamee Food Services partner to elevate Maldivian dining with Asian Cuisine Engagement Week

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Bestbuy Maldives (BBM), a key supplier to the Maldives’ hospitality industry, in partnership with Mamee Food Services, has launched the Asian Cuisine Engagement Week. The programme, running from 29th June to 4th July 2025, is designed to introduce premium Asian sauces to the Maldives foodservice sector and upskill culinary professionals.

The official launch was held on Monday at BBM’s venue partner, the Faculty of Hospitality and Tourism Studies (FHTS) at The Maldives National University (MNU). FHTS continues to be a key collaborator with BBM on industry events and culinary development. The event was attended by over 40 chefs from leading hotels and restaurants in Malé. Representatives from Mamee Food Services travelled to the Maldives to lead the session, which included live product demonstrations and technical training.

The focus of the initiative is the introduction of Mamee’s premium Asian sauces, including the Daebak range, which features a variety of Korean and East Asian flavours. The programme aims to support chefs in incorporating these new products into their menus, fostering innovation within commercial kitchens.

AVS Subrahmanyam, Chief Operating Officer of Bestbuy Maldives, commented on the initiative, stating, “Our goal is to be a strategic partner for the culinary community in the Maldives. This collaboration with Mamee Food Services is a direct reflection of that commitment. By providing access to new products and facilitating hands-on training, we are investing in the skills of chefs and supporting the evolution of menu offerings across the country. This initiative aligns with our broader strategy to continuously elevate the culinary standards in the Maldives.”

He added, “We believe that introducing high-quality, authentic Asian flavours through our partnership with a globally recognised brand like Mamee will provide a new dimension to the dining experience for tourists and locals alike. This reinforces BBM’s role as a trusted partner for global F&B brands seeking to make a mark in the Maldivian market.”

Jennifer Chee, Director of Food Service at Mamee Food Service, expressed her enthusiasm for the collaboration, stating, “We are incredibly excited to partner with Bestbuy Maldives to bring Mamee’s authentic Asian flavours to the vibrant culinary scene of the Maldives. This engagement week is a fantastic opportunity to showcase how our premium sauces, particularly the Daebak range, can inspire creativity and elevate dishes in professional kitchens.”

“We believe that by working directly with chefs and providing hands-on training, we can truly empower them to explore new culinary possibilities and deliver exceptional dining experiences to their guests. We look forward to seeing the innovative ways Maldivian chefs will incorporate our products.”

Following the launch in Malé, a dedicated follow-up session will be held at OBLU XPERIENCE Ailafushi for resort-based chefs. This session will include participation from properties within the Atmosphere Core group, providing hands-on training focused on the scalable integration of Mamee products into commercial resort kitchens.

Throughout the week, the culinary team from BBM and Mamee will conduct on-site visits and tastings at selected restaurants in Malé, offering further technical support and guidance.

This joint initiative between BBM and Mamee Food Services is set to drive menu innovation and provide culinary professionals in the Maldives with the tools and skills needed to meet evolving consumer tastes.

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2025 sees Maldives reach 1 million tourist mark in record time

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Maldives has welcomed its 1 millionth tourist of 2025 on 7th June 2025, the fastest that the country has achieved a million tourists in our nation’s history.

Kajal Singh, an Indian national, arrived in the Maldives today on IndiGo flight 6E 1131 at 12:55. She is visiting for her honeymoon at Bandos Maldives. This is her first trip to the Maldives.

Visit Maldives, in collaboration with the Ministry of Tourism and Environment and Maldives Airports Company Limited (MACL), hosted a special celebratory event at Velana International Airport to commemorate this remarkable achievement.

“This milestone fills us with immense pride, reflecting the successful culmination of our destination marketing initiatives that showcase the true essence of the Maldivian experience,” stated Minister for Tourism and Environment Thoriq Ibrahim. “Welcoming one million tourists with such unprecedented speed is a powerful indicator of our global appeal, and I extend my sincere appreciation to all the hardworking individuals across the tourism sector whose dedication made this achievement possible.”

In a gesture highlighting the nation’s commitment to environmental sustainability, the one millionth visitor, Kajal, was invited to participate in the “Five Million Trees Planting Program” initiated by President Dr. Mohamed Muizzu. Kajal planted a tree at Hulhulé as part of this nationwide effort to combat climate change, enhance biodiversity, and promote a greener Maldives for future generations.

“This achievement is a clear indicator that we are well on our way to attaining H.E President Dr Mohamed Muizzu’s national tourist arrival target of 2.3 million for this year,” said CEO & MD of MMPRC Ibrahim Shiuree. “We are thrilled to celebrate this milestone with all our stakeholders, whose dedication and hard work are invaluable. Our commitment doesn’t end here; we are continually working to enhance the Maldives’ tourism industry and ensure the Sunny Side of Life remains a dream destination for everyone.”

The arrival of the 1 millionth tourist in 2025 marks a proud moment for Maldivian tourism, symbolizing the robust momentum generated by MMPRC’s strategic promotional efforts. Building on the resounding success of the recent Arabian Travel Market (ATM) 2025, where the Maldives captivated the global travel trade community with its powerful and immersive showcase, this milestone highlights the effectiveness of our enhanced global visibility and affirmed key industry partnerships.

Complementing these efforts, the ongoing comprehensive Summer Campaign, with its multi-market strategy spanning Europe and key international markets, is actively driving increased visibility and stimulating early bookings for both the summer and upcoming winter seasons. MMPRC’s marketing initiatives such as high-impact campaigns, strategic partnerships, and targeted outreach are significantly enhancing the Maldives’ global brand, boosting booking confidence, and solidifying its position as a leading, year-round holiday destination.

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