Buying Land, Touching The Net And Playing Sideline: The Three Way Out For Retail Industry

On the one hand, the operating costs of manpower and rents have risen substantially; on the other hand, the macro situation of "shrinking consumption" is like a fierce tiger blocking the way.

Recently, a survey data showed that high inflation has inhibited the growth of consumer demand. As of mid July, a number of retail listed companies announced that sales growth in 2011 has dropped somewhat. The profit pressure of retail business has intensified in the second half of this year, and the rise of online shopping has caused a huge impact on the traditional hundred goods industry, and the future situation is even more serious.

However, there are also optimistic retailers who believe that after the severe winter of the financial crisis, the retailing industry has already had the courage of "soldiers coming and going to block the water".

The reporter has learned that some retail enterprises are either walking on the two legs of "retail + real estate", taking diversified combinations to broaden the source of profits, controlling costs from the source, improving efficiency in details, and conducting a brilliant breakthrough to save themselves.

The latest statistics show that in the current and even the next 2~3 years, the retail industry will usher in a large number of property rental leases, and the cost of renewal will rise even more than 100%.

The China Chain Store Association's "China chain top 100" survey in 2010 showed that the biggest difficulty faced by 100 enterprises last year was the increase of operating costs, including rental costs and labor costs. Among them, the average rental cost of chain businesses increased by about 30%, while artificial Cheng Benping rose by 15%.

Recently, news of reluctantly closing stores has been in endless stream because of the rentless rent.

In April of this year, Ji Ji island could not afford to withdraw from Guangzhou's Zhonghua square with tears. It was also due to the problem of "lease expiration". The parkshop in Guangzhou Zhongli commercial city also came out this year. The most tragic thing was Chengdu Pacific Chunxi department store. Although it was willing to sell 50% of its profits and renew the lease, the new Pacific spring house, which was rooted in Chunxi business district for more than 7 years, finally left the scene because of the property problem.

"The average shopping mall will be upgraded in an average of 3~4 years, but the shorter the lease term is, the more important it is to ensure that it can be renewed.

Chu Rui Business Consulting CEO Huang Wenjie said that compared to 10 years ago, the rent of 50 yuan / square meter / month has now skyrocketed to 200 yuan to 350 yuan / square meter / month, which is nearly 7 times the rent increase, which makes it difficult for businesses to continue.

It is reported that some retail businesses have even set up specialized departments to start the work of owners in two or three years ahead of time, or strive to purchase the property in full, or take the cooperation of share rights cooperation and profit sharing.

On the other hand, CPI is more like a group of "crisis reports" for many retail enterprises.

In July 15th, the Ministry of Commerce announced the statistics of the National Bureau of statistics at a regular press conference. In the first half of this year, the total retail sales of consumer goods totaled 85833 billion yuan, up by 16.8% over the same period last year, and the actual price growth increased by 11.6%, down 1.4 and 3.7 percentage points respectively from the same period last year. In addition, in June, the national consumer price level rose 6.4% over the same period last year, and CPI rose to a new high of three years.

"Moderate inflation has always been seen as beneficial to the retail industry. In fact, inflation is a double-edged sword. Although inflation will increase the unit price of goods, sustained high inflation will suppress demand growth."

Li Xuerong, a senior researcher at CIC, said that in May, sales growth of large circulation enterprises had dropped somewhat due to the slowdown in demand for medium and high grade consumer goods. This is the first time that retail sales of key retail enterprises have declined this year.

She pointed out that this may reflect the growth of Retail Listed Companies in the first half of the year.

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Way out 1: "retail + real estate" walking on two legs

Abandoning a shop that has been in operation for many years has no doubt about the negative impact on the brand, but in the face of the ridiculous rent, if it is hard to carry, it will make the enterprise overburdened.

Stick to or retreat?

According to the reporter's understanding, most of the retailers with financial strength have chosen third modes: self purchase of property and expansion mode of "retail + real estate".

Public information shows that if the company owns its own property, its operating cost will be 30% to 40% lower than that of the leased property.

The mode of walking on two legs with "rent + self built" has become the consensus of many retail enterprises at present.

In fact, the wave of retailers' acquisition can be traced back to 2009.

Under the impact of the financial crisis, many domestic and foreign retail enterprises have chosen to build their own property in China and set foot in commercial real estate projects, hoping to get more stable income.

With the overall economic recovery, the pressure of rents increases and the enthusiasm of retailers is rising.

It is reported that TESCO Tesco set up a special real estate company in China last year, independently designing, developing, inviting and operating Ledu Hui shopping center. At present, the first shopping center of its own property has opened in Fujian.

Meanwhile, WAL-MART, which has always kept a low profile in real estate business, has begun to buy land to make a clear entry into China's commercial real estate.

It is reported that from March this year, WAL-MART openly recruited the real estate manager to expand the new store development plan in the whole country.

In addition, Hua Run Su Guo also plans to spend 1 billion yuan this year as a property purchase fund.

"We mainly consider the uncertain risk of rents to increase the proportion of private property, so as to maintain the sustainability of efficiency."

Du Baoxiang, vice president of Wangfujing department, said in an interview that the proportion of self owned property will increase by 50% this year.

It is reported that in May this year, Wangfujing has spent more than 200 million yuan to buy Wangfujing commercial square in Changsha, which is the second acquisition of foreign property in six months after the acquisition of Wangfujing in Chengdu last December.

Du Baoxiang pointed out that retail enterprises enter the commercial real estate, mainly driven by profits, and the return on investment in real estate is definitely higher than that in the retail industry.

Of course, there is also a "forced" factor. Now the scramble for rent and store resources is fierce, so some retailers have to wait for opportunities to develop commercial real estate.

Some experts said that the chain enterprises in 2011 may face nearly 50% of the cost increase.

How to digest such a high cost of growth is obviously difficult to support simply by walking on a single leg of traditional retailing.

It is understood that in addition to the three major retail giants in the world involved in commercial real estate projects in China, Guang Bai shares, Wangfujing, Xinguang department store, Shanghai Bailian, Wu Shang Group and other domestic retail enterprises have also planned to increase their development of self built property this year, and coincidentally use the mode of "walking on two legs" with the retail + ground, and begin a new round of layout for the domestic market.

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Way out 2: diversified business combinations to expand profit sources

In the fierce competition, some retail enterprises began to try multi format operation.

In addition to entering commercial real estate, increasing private brand, expanding logistics construction and opening up e-commerce, increasing the content of business format has also become a new profit growth point.

Recently, Ren Ren Le Supermarket launched the "Miller electric" brand in Shenzhen and Xi'an, and began to enter the home appliance chain market in a low-key way.

Liu Jiajun, manager of marketing department of Ren Ren Yue supermarket, said: "supermarket + department store + household appliances + home" is a business model currently built by people.

Huarun 10000 will tie up the 6~7 formats, such as drugstore, Pacific Coffee, OLE supermarket, Hua Runtang, wine cellar and so on. They will enter Guangzhou together at the end of this month.

Liu Xiujun, director of public affairs at Huarun, said retail diversification could play the biggest synergy.

On the basis of the existing hypermarkets and supermarkets, PARKnSHOP supermarket has launched its two formats of CITY and TASTE into Guangzhou.

So far, the 6 formats of Parke's 8 formats in Hongkong have entered the mainland.

And Guang Bai department store, with second young and fashionable GBF department stores in Beijing road reconstruction mall opened, and the 100 hundred independent supermarkets and Guang Bai electrical appliances also "stunning" appearance, which means that following the Guang Bai department store, new Daxin and new city shopping center, there are 6 kinds of formats expanding.

"To a certain extent, the value of retail industry is the subdivision of value chain."

Li Xuerong believes that the more developed the market is easier to subdivide, and diversification means that more market opportunities can be seized, profits can be complementing, and the choice of property and business circles is more flexible.

Way out 3: enter the online store to fight back.

If we say that a few years ago when the online shopping wave came, the traditional department store "touches the net" is an active positive attempt.

Now, the mainstream department stores once again pay attention to online shopping business collectively, which is more like a passive Jedi counter attack.

According to the latest data from the China Electronic Commerce Research Center, the scale of online retail market in 2010 reached 513 billion 100 million yuan, an increase of 97.3% over the same period last year, and this proportion is expected to soar to 30% in the next 10 years.

In the entire retail industry, retail sales of the retail sector have been much higher than that of physical retailing.

On the other hand, as domestic department stores generally adopt the mode of joint point deduction, the phenomenon of homogenization of brands is serious, and the price war is becoming more and more intense, leading to the further compression of the business profits of department stores. This is evident from the 2011 mid term performance report recently released by listed retail enterprises.

"Under such circumstances, online shopping seems to be no longer a supplement to dispensable business entities, but a new profit growth point that can be excavated by traditional department stores."

Guang Xiaoyan, deputy general manager and chief operating officer of Guang Bai shares, said that the independent e-commerce company, established in the past about 30000000 yuan, has started operation at the end of April. It will set up a set of independent entity store operation structure, including market research, sales, customer service, website promotion and operation, product development, warehousing, packaging, logistics, delivery, financial monitoring and other links.

Kang Xiaoyan emphasized that traditional retailers should have the "Internet gene" instead of simply copying the traditional entity store's organizational structure.

The reporter learned that Guangzhou friendship online store, "friendship network Tesco" has also been formally launched in July 16th. The online store took the lead in introducing 3D panoramic spot simulation network technology system, and restored the whole appearance of friendship city east store.

Jiang Guoyuan, deputy general manager of Guangzhou friendship group, said that the best way to open a store is to rely on its own advantages, that is, to integrate suppliers' resources and ensure that the goods are genuine. If there is any doubt, customers can also go to the store for verification.

Reporters browse to understand that the friendship integrates more than 200 brand counters, including nearly 10 thousand kinds of goods, including men's clothing, craft products, watches, cosmetics, bags, household products, food, kitchen appliances, household appliances and so on.

It is reported that there are not only one-stop services for booking, buying, paying, and delivering goods, but some brands also have a one--to-one online customer service, which provides direct consultation through voice and video, and takes the lead in using the mobile POS to pick up or collect integral cards in the industry.

It is reported that at present, Wangfujing stores, Yintai department store, Guang Bai, Guangzhou friendship, Xidan shopping center, Zhongyou department store and other well-known business enterprises have opened online shopping mall.

In the reform of the electricity supplier, intime department store took the lead and set up the independent entity store's e-commerce company.

In less than 3 months, daily orders exceeded 10000, and daily sales exceeded 4 million yuan.

The success of the restructuring also led Guangdong Department store to see the dawn of reform.

People in the industry lamented that 10 years ago, the expansion of retail chains brought about changes and baptism in the retail industry. Today, the battle for customers with shopping websites has become the two revolution in the retail industry.

Reporter's notes

Lao Ping Ping effect is the direction of retailing efforts.

For a long time, sales, gross profit and cost are three key indicators to assess the performance of retail enterprises. However, under the pressure of rising operating costs, retail experts point out that two other important assessments should be paid attention to, namely, "labor efficiency" and "Ping efficiency".

As a matter of fact, whether a retail enterprise is competitive and whether its management level is high can not be based solely on sales.

The size of sales can only reflect its market share and can not reflect its market competitiveness.

How to effectively improve the per capita labor efficiency and how to use the most reasonable operating area to obtain the largest business results is the most important direction for many retail enterprises at this stage.

In the past quite a long time, retail enterprises generally do not pay much attention to the two indicators of efficiency and efficiency.

The so-called per capita labor efficiency is the annual sales volume of a retail enterprise. The so-called Ping efficiency is the sales volume generated by the retail enterprises in all their units.

A survey from DDT office shows that in the past two years, the annual per capita labor efficiency of retail enterprises is 360 thousand to 480 thousand yuan / year, and the average annual operating area is 18 thousand to 22 thousand yuan / M / year.

Affected by the large domestic and foreign economic environment, especially the current high inflation, retail enterprises are generally faced with the pressure of shorter housing tenancy and rising rent levels.

At the same time, due to the increasing difficulty in recruitment and labor costs, the profit margins of retail enterprises have also been greatly reduced.

Data show that the current increase in labor and rental costs has consumed 1% to 2% of retail businesses' earnings.

In other words, the increase of human cost should be made up by increasing the per capita labor effect; while the increase of store rentals will enhance the average Ping efficiency through the enhancement of operational capacity, otherwise the market competitiveness of retail enterprises will be greatly reduced, which should be the consensus of many retailers.