Hong Kong grocery chain DCH feels the pinch of online shopping, goes out of business after 39 years of operations

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Local media outlets also reported the retailer was issuing termination notices to employees, with the letters citing uncertain external factors and operational challenges.

The company said it would terminate its “DCH Cooking Buddies Membership Program” and its mobile app from April 1, with all electronic coupons on the platform to automatically expire on that date.

Some customers at the retailer’s Happy Valley outlet said it was a shame the company was closing down.

“What a pity! This is a store full of human touches. I often get groceries from here and I like making small talk with the staff,” said Candice Law, 36.

Law, who has lived in the neighbourhood for almost 10 years, said she would definitely shop at the outlet again before it closed.

Carol Hsu, 73, said she had been coming to the Happy Valley outlet from Repulse Bay to buy groceries for more than 10 years.

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“Their quality control is very good. They offer dried seafood and fresh vegetables at a reasonable price and standard quality,” she said. “It’s very bad that they’re about to close.

“There’s no way to avoid it … People prefer online shopping now and the economy is slowing down,” a company employee of about 20 years said, while declining to be named due to company policy.

Gregory Lam, 78, who has been a patron at the local outlet for decades, said: “I don’t come here to shop. I come here for the people.”

“It’s easy to get parking tickets around this area. Since I know the staff well in the shop, sometimes I just shout inside the car to get five oranges from them.”

Lam said he had heard a rumour last month that the store would close and had stocked up just in case, but believed this time was for real.

On Friday, most products in the store were selling at a 30 per cent discount, with 10 per cent off for premium products such as wine and abalone.

A staff member said such large sales were not common at the store.

Employees were told the night before there would be a morning meeting, where they learned the store would shut its doors, the staff member said.

Staff were still waiting for more details on the closure arrangement, the employee added.

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A spokeswoman for the Labour Department said it was highly concerned about the closure and had been following up on the case. The department had reminded the company of its obligation to provide compensation to the affected staff members in accordance with the Employment Ordinance, she said.

“The affected employees can come to the Labour Department’s divisional office for inquiries and we will provide appropriate assistance,” she said.

Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, said more brick-and-mortar retailers were at risk of shutting down following the closure of DCH Food Mart owing to the rise in online shopping and the growing trend of Hongkongers heading north to spend.

“This type of operation which relies heavily on physical stores to generate revenue will face increasing pressure of shutting down,” he said. “These retailers have difficulties sustaining their operations because a rising number of people have switched to online shopping, while Hongkongers flood to the north to spend.”

Big box stories such as Costco opening over the border have lured Hongkongers north with the promise of big savings on everything from toilet paper to fruit.

Ng suggested that struggling retailers reduce the number of their outlets and make greater use of e-commerce to remain afloat.

The retailer was established in 1985 and is a subsidiary of Dah Chong Hong Holdings Limited, providing frozen foods, seafood, meat, and poultry, among other goods. The chain at one point operated more than 50 stores across the city.