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Foreign Capital Retail "China Robbery": Poor Performance, Shutting Down Stores

2014/8/7 16:12:00 39

Foreign Capital Retail Performance Close Shop

"P", "Secretary Long Yongtu, do you think that in China's accession to the WTO treaty, the concession of service trade is too great?"

Long Yongtu, the important negotiator of China's accession to the WTO, Professor Gu Guojian, director of the Shanghai Institute of chain operations, sped up.

"China's retail industry is losing ground under the attack of a strong foreign legion.

China's retail industry will be completely defeated.

What do you think of it? "A boss of a retail business also raised a sharp question for Long Yongtu.

these questions received the most enthusiastic applause from 1600 people attending the meeting.

however, faced with numerous doubts, Long Yongtu, the chief negotiator leading China's accession to the WTO negotiations, said he felt very grieved.

He said: "local governments are ignoring the principle of opening up to the outside world and breaking through the open bottom line formulated by the state at will. Foreign enterprises are obviously enjoying super national treatment."

this is the scene of the 2004 China retail summit held 10 years ago.

Now, 10 years later, when we look at the retail industry in China, the situation is totally out of expectation 10 years ago. Foreign retail giants are in a difficult position in China. P

poor performance

Less than p years ago, foreign retail sales were different in China, and foreign brands were no longer easy to rush to the "cake" in the Chinese market.

The statistics released by the China National Business Information Center in Kunshan in May 28, 2014 showed that in 2013, China's top 100 retail enterprises achieved sales of 2 trillion and 771 billion 820 million yuan, up 19.8% over the same period last year, and the growth rate dropped by 0.4 percentage points over the same period last year.

Foreign retail enterprises accounted for 100% of China's market share and continued to decline.

the statistics show that in 2013, there were 20 foreign-funded retail enterprises in the top 100 enterprises, a decrease of two compared with the previous year, and 20 foreign-funded retail enterprises achieved sales of 451 billion 640 million yuan, accounting for 16% of the total sales volume of the 100 enterprises, down 1.2 percentage points compared with 2012.

The sales volume of 20 foreign-funded retail enterprises increased by 10.4% compared to the same period last year, and the growth rate slowed down 1.1 percentage points compared with 2012.

statistics show that the average sales scale of the 20 foreign retail enterprises is 124 million 557 thousand yuan, which is 3.1% lower than the average sales scale of foreign retailers in 100 enterprises in 2012.

The annual report data released by foreign capital retail enterprises (P) also reflected the predicament of the decline in foreign retail sales from another aspect.

Less than p days ago, the domestic supermarket chain market share ranked first, and Gao Xin retail, which owns big Rand and Auchan supermarkets, released its 2013 performance report. The data show that in 2013, its turnover was 86 billion 195 million yuan, and net profit was 2 billion 775 million yuan, up 10.7% and 15.2% respectively compared with the same period last year. The growth rate slowed down significantly compared with the high growth rate of 14.3% and 50.6% of 2012's business volume and net profit.

another financial data released by WAL-MART, a foreign supermarket giant, shows that as of the 2014 fiscal year of January 31st this year, the company's operating income was 56 billion 400 million US dollars, down nearly 6%. In the three businesses of the US Department, international department and Sam's member store, only the net sales revenue of the international department had slipped, and the net profit was 16 billion US dollars, down 5.7% compared to the same period.

according to the 2013 earnings report released by Parkson group, in 2013, Parkson opened 6 stores.

By the end of 2013, there were 58 outlets in 37 major cities in China.

But with the sharp loss of new stores, 6 new stores opened in 2012 and 2013 lost 193 million yuan.

in addition, the sales volume of lotus flower in 2013 was only 10 billion 882 million yuan, a slight increase of 1.9% and a loss of 96 million 800 thousand yuan.

and according to the 2014 Chinese shopper report released by Bain company, 60% foreign brand market share was squeezed out last year.

"P," Bain, global partner of the company and chairman of the consumer goods and retail industry in Greater China, said: "after many years of development, the local brand has become more and more powerful, and has done many things right." Bruno Lanna

The change of China's consumer goods market is clear and direct for foreign brands and local brands.

> a href= "http:// www.sjfzxm.com/news/index_c.asp" > Guan Dian < /a > one after another /p >

In the face of increasingly difficult to conquer Chinese market, P has always been a proud international retail giant and has also slowed down its opening up strategy.

data show that last year 65% of luxury brands stopped and slowed down the expansion plan of the Chinese market.

Most foreign department stores, supermarkets, international luxury brands and so on not only did not complete the shop plan, but also began to stop shop.

2013, foreign retail supermarket formats are frequently closed in China.

WAL-MART closed 14 stores, Tesco closed 3, 2 bees closed, Wangfujing closed to 1 outlets, unified Mart closed 1, Metro announced that Wan De City appliances quit China, closed 7 stores in Shanghai, while its restaurant supermarket declared that test water failed and closed 2 stores in Shanghai. In 2013, the total number of main foreign retail outlets reached 31 (excluding household appliances).

Less than P, Malaysia Baisheng, which is known as "the first foreign capital store", has closed 6 stores in two years. Even though the founder of old age Zhong Yansen has comeback, his performance is still deteriorating all the way.

In the first quarter, Parkson same store sales fell 8%.

Less than 5 years to enter China, the Shang Tai Department store, one of the five largest retail groups in Thailand, closed one of the 3 stores in the Chinese market.

The British department store Martha general store, which is facing the bottleneck of development, has also issued a signal to adjust its strategy in China.

the practice of closing retail stores by foreign retailers did not appear to be slowing down in 2014.

recently, following the closure of the Wangjing store, Ito Yang Hua Tang also announced that it would close a shop in Beijing's Beiyuan district.

A few days ago, the shop in the north of the Hua Tang shopping center posted a notice of closing shop, saying it would be officially closed on September 1st.

WAL-MART plans to close 15~30 stores in China, accounting for 9% of the total number of shops.

and recently released the statistics of major retail enterprises in the first half of 2014, it shows that the format of the supermarket has become the most closed shop in the first half of the year, closing a total of 146.

According to the reporter of China chain, there are 118 foreign-funded retail enterprises in the affiliated enterprises, accounting for 75% of the total number of stores.

"in the stage of the current consumption downturn and the dramatic changes in the consumer market, the department store industry has been the most affected."

Huang Wenjie, executive director of the Guangdong Circulation Industry Association, said that in the past 5 years, the cycle of developing a new store was 2~3. But now the incubation period of a new store has been extended to 3~5 or even longer. Under the condition that the main costs such as rent and management fees, utilities and labor expenses continue to rise, it is a wise choice to turn off the profitable shops.

escape a href= "http:// www.sjfzxm.com/news/index_c.asp" > first tier cities < /a > /strong > /p >

While foreign retail stores are closing up, they will also find new business outlets. But obviously, they are intending to escape from the three or four tier cities and seek development space for the P cities.

only 10 years ago, foreign retail giants quickly conquered the domestic market with low rent.

But today, this trump card keeps them awake at night.

high rent is undoubtedly the culprit of these stores in China.

the report from the first Pacific Davies shows that since 2010, the rental of Beijing shops has continued to rise.

By the end of 2012, the average retail price of Beijing's high quality retail property market (mainly the first floor of high-end shopping center) has reached 864.9 yuan / square meter / month, that is, nearly 29 yuan / square meter / day. The rent level has increased by 7% over the past six years.

public data show that in 2012, the average rent of China's business super industry accounted for 57% of total operating cost and the average cost of manpower increased by 15%.

Moreover, the weak growth of the consumer market has also increased the cost pressure.

"the rise in rent and labor costs foreshadowed the end of the era of low cost and low price."

Zhao Ping, deputy director of the Consumer Economics Research Institute of the Ministry of Commerce, believes that housing rent and labor cost are the most important costs for commercial retail enterprises, which can account for more than 70% of the total cost.

Among them, rents generally account for 20%~40% of retail sales. In chain stores, supermarkets, convenience stores and other formats, rents cost up to 30%~50%.

In the face of business predicament, the international retail giants who choose to survive on their arms have begun to sink and turn from a highly competitive second tier city to a three or four tier city. P

in Gao Xin retail's 2013 earnings report, we have identified 160 locations for the establishment of comprehensive hypermarkets, of which 99 are under construction, ensuring that there will be enough land reserves in the next 3 years to boost business growth, and 160 of them have been implemented, 44% of which are located in three cities, 27% in four cities, 8% in five cities.

WAL-MART also announced that 110 new sites will be added to China in the next 3 years, with emphasis on the development of the three or four tier cities, and 80% of the stores will be located in the three or four tier cities.

in addition, Carrefour, Metro, bu bee lotus, Huarun Wanjia and so on mentioned in the strategic planning to extend to the three or four line cities.

Why are these foreign large supermarkets frustrated in China's second tier cities? 10 years' rent for the first stores in China 10 years ago has expired, and now rents are several times higher than those of the same year.

it is obvious that in the next.3 to 5 years, with the expiration of the lease, as well as the low consumption and various costs, the number of enterprises leaving the core business circle will be more and more.

In other words, high rent will become a fuse to break the inherent regional retail structure.

frequent incidents in China

> a href= "http:// www.sjfzxm.com/news/index_c.asp" > foreign retail enterprise < /a > the pressure is not only from the management level, but also the pressure of supervision.

recently, Shanghai Fuxi Food Co., Ltd., through the "overdue food re cooking", "change the warranty period mark" and other means, a large number of processing of expired poor meat incidents continue to ferment.

Fuxi is an American owned enterprise belonging to the largest meat and vegetable processing group in the world.

Fuxi has been supplying McDonald's in China for 22 years.

By P, McDonald's, KFC and Pizza Hut once again suffer from double crises of food safety and trust.

it is said that after the exposure of the incident, the regulatory authorities have sealed up Fuxi company overnight, demanding that all KFC and McDonald's products in Shanghai should be put off shelves.

In January this year, Mr. Wang from Ji'nan bought a well packaged beef and donkey meat from Shandong local supermarket, which was found in the local WAL-MART supermarket. After eating it found that the flavor and color were not right, so the meat was sent to the authoritative testing institution for testing.

Among them, donkey meat test results showed that donkey ingredients, duck ingredients were not detected, fox ingredients detected.

Although the fox skin is very valuable, the fox meat is famous for its bad smell. It is not worth the money. There are fox farmers who say that the fox meat can be removed from the odor after processing, and some people buy it specially, with a minimum price of 1 yuan and 1 jin.

It is not the first time that a p event is similar to "hanging ox head to sell fox meat".

As early as in 2011, WAL-MART was fined about 2 million 690 thousand yuan for its 10 branch stores in Chongqing for 15 days because of the "green pork" incident.

According to the Chongqing industrial and commercial bureau, since 2006, WAL-MART has been punished 21 times in the local store by the business sector due to the sale of expired food, substandard food and false propaganda.

Carrefour supermarket has been punished for many times because of "price fraud".

In June 17, 2012, the Wuhan Municipal Price Bureau criticized the 7 supermarkets' "the original price of the high priced goods, and then offered it with an attractive discount sale", and imposed a fine of 500 thousand yuan.

It is worth noting that among the 7 companies that criticized the company, 6 were Carrefour supermarket stores opened by Carrefour in Wuhan, involving a fine of 450 thousand yuan.

the relevant departments have intensified supervision over foreign-funded enterprises.

In May 29th, the national development and Reform Commission announced that foreign brands such as Nikon, Brunson, Johnson and other foreign brands were fined about 19000000 yuan for violating the anti monopoly law.

Last year, a number of foreign pharmaceutical companies such as GlaxoSmithKline, Senofi and Novartis were also investigated for bribery.

Zhao Zhongxiu, Vice Chancellor of the capital foreign trade and Economic University, thinks that this is just a correction of the past. In the past decades, China has always adopted super national treatment to encourage foreign investment to encourage foreign investment, but the management of standardization has often been neglected.