Supermarket rebates explained

September 27, 2020

The Government today said the give-back proposals for the second tranche of the Employment Support Scheme (ESS) from the two supermarket chains should meet several principles.


It made the statement in response to media enquiries on the approved give-back proposals from the two supermarket chains, Wellcome and PARKnSHOP.


The statement said the principles set for the give-back proposals include that the rebate should not be less than 50% of the ESS subsidies approved under the second tranche.


The initiatives in the proposals should be quantifiable and transparent and they should also be on top of what the two supermarket chains have been doing without the ESS subsidies.


The types of rebate beneficiaries may include, in order of priority, underprivileged groups, customers and their frontline staff.


The amount attributable to underprivileged groups should be no less than 50% of the minimum rebate amount while that for staff should not be more than 10% of the minimum rebate amount.


After considering society's views, the Government explicitly indicated to the two supermarkets that it does not support the inclusion of discount offers for customers, including price reductions, price freezes and any price-sensitive initiatives, in their give-back proposals.


The statement said such initiatives not only make it impossible for the Government and the general public to constantly monitor price changes, but also difficult to differentiate the discount offers from the two supermarket chains' daily promotions.


The give-back proposals approved by the Government therefore do not include any discount related initiatives which are not quantifiable and may reduce the transparency of the proposals.


Wellcome and PARKnSHOP received wage subsidies of $184.5 million and $161.96 million.


According to the principles, the Wellcome and PARKnSHOP rebates should not be less than $92.25 million and $80.98 million, and they will return about $100 million and $81 million to the community through their give-back proposals.


The rebate amounts represent 54% and 50% of the respective wage subsidies of the two supermarket chains.


In the Wellcome give-back proposal, 90% of the minimum rebate amount is attributable to cash coupons, meal coupons and one-on-one matching donations for the underprivileged and 10% is attributable to the rewards to be given to frontline staff.


On top of the share of the minimum rebate, Wellcome has proposed to give an additional monetary reward to frontline staff.


For the initiative of freezing product prices for six months offered by Wellcome, since it cannot meet the principle requiring that the rebate measure should be quantifiable and transparent, such an initiative cannot be included in the give-back proposal and hence, Wellcome's $100 million rebate proposal does not include such an initiative.


Nonetheless, the Government appreciates Wellcome including additional discount arrangements to benefit customers on top of its give-back proposal.


Regarding the PARKnSHOP give-back proposal, 50.5% of the minimum rebate amount is attributable to food coupons for the underprivileged, 39.5% is attributable to cash coupons for customers and 10% is attributable to rewards for frontline staff.


Since the cash coupons to be given out to customers fulfil the principle that a rebate measure should be quantifiable and transparent, the Government agreed to include such an initiative in the give-back proposal.


PARKnSHOP is reminded to comply with all relevant ordinances and regulations when distributing the cash coupons in the form of a lucky draw.


The Government has requested the two supermarket chains to publish at an appropriate time the list of partner non-governmental organisations, the number of beneficiaries and the amount involved for monitoring by the public.


The two supermarket chains will have to execute their give-back proposals before the end of December.

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