Supermarket chain Aeon Co. will likely post a consolidated net loss of about ¥3 billion — its first in seven years — when it reports earnings for business 2008, industry sources said Saturday.
The retailer earlier projected that earnings would fall somewhere between a profit of ¥2.5 billion or a loss of ¥2.5 billion for the year ended in February.
The forecast comes as demand for products such as clothing are sagging, although food sales were strong, the sources said.
Its operating profit is likely to have dropped by around 20 percent from the previous year, due partly to poor performance of its flagship business in general merchandise and apparel, the sources said.
Aeon apparently booked massive special losses, including impairment losses logged by its struggling U.S. clothing affiliate Talbots Inc. and other costs stemming from the closure of unprofitable stores, they said.
Looking ahead, the Chiba-based company intends to increase both sales and profit for the 2009 business year ending next February by strengthening sales of its private-brand products while engaging in cost-cutting efforts, the sources said.
Private-brand products, which are generally cheaper than regular products, have become popular items at supermarkets amid the recession.