DFI Retail Group and CK Hutchison Holdings are in discussions to merge their supermarket operations in Hong Kong, a move that could significantly reshape the city’s grocery retail landscape.
According to reports citing sources familiar with the matter, the talks involve combining DFI’s Wellcome chain with Hutchison’s ParknShop supermarkets. While negotiations have been ongoing, no agreement has been finalised and both companies have declined to comment publicly.
Wellcome, operated by DFI Retail Group, runs around 280 stores in Hong Kong, serving more than 13 million customers each month and employing roughly 7,000 staff. ParknShop, part of Hutchison’s retail arm under A.S. Watson Group, operates over 240 outlets across Hong Kong and Macau, making it one of the region’s largest grocery networks.
If completed, the merger would bring together two of Hong Kong’s most established supermarket brands. Historically, the two chains have accounted for a dominant share of the market, estimated at close to 90% in 2023, although increasing competition from new entrants, e-commerce platforms, and cross-border shopping has diluted their combined share in recent years.
The potential transaction reflects mounting pressure on traditional grocery retailers in Hong Kong, where changing consumer behaviour and rising competition are pushing operators to seek scale, efficiency, and stronger supply chain leverage. A combined entity could benefit from improved purchasing power, streamlined operations, and greater investment capacity in digital and omnichannel retail.
However, sources indicate that a valuation gap between the two groups remains a key hurdle in negotiations, potentially delaying any agreement. The discussions also come amid broader strategic moves by CK Hutchison, which has been exploring options for its retail subsidiary, including a possible public listing of A.S. Watson Group at a valuation of up to $30 billion.
For DFI Retail Group, whose food division generated approximately $3 billion in revenue in 2025, the merger could strengthen its core supermarket business in its home market.
If the deal proceeds, it is expected to face regulatory scrutiny given the scale of the combined operations, but it would mark one of the most significant consolidation moves in Hong Kong’s retail sector in recent years.
