Traditional Department Stores Have Entered A Meager Profit Era: Joint Operation + Self Run + Leasing Or New Mode.

In recent years, with the increase of various kinds of costs, such as manpower and logistics, the traditional Department store Has entered the "meager profit era".

In addition, the consumption habit of residents gradually shifted from offline to online. The electricity supplier quickly occupied the market through cheap price, convenient payment system, door-to-door service and so on. Coupled with rising labor costs and rental costs, the traditional retail living space is further squeezed.

The core business circle has always been regarded as a prosperous symbol of traditional department stores, and is also a battleground for big businesses. Nowadays, the department stores in the core business circle have played a "retreat", and the trend of shop closing is spreading.

Rents continue to rise. Department stores have moved to close stores.

"The Wuxi branch of Dayang department store is due to expire on May 1, 2013 and will no longer be open for business." A few days ago, a closed shop bulletin in the Department of oceanic's ten year operation in tin was like a thousand waves.

Since May 2011, following the Wuxi new world department store and Ying Wu department store, it is the third department store closed in the core business circle of Zhongshan Road. In the most prosperous Zhongshan Road core business district of Tin City, the new world department store and the Ying Wu department store, which are separated from the big Eastern Department store, have been closed for a short period of time in just two years. Some people have commented on the strange phenomenon of Xicheng commercial circle: "only the big east and the eight hundred partners are two largest, and other shopping malls are struggling."

Not only is Wuxi, but the department store's retreat from the core business circle also occurs in many first tier cities. For many old Shanghai, department stores are proportionate to numbers, but with these number shops closing or changing formats, the original twelve Shanghai "numbered" department stores only have five.

Qi Xiaozhai, chief research fellow of Shanghai commercial economy research center, told reporters that the number shop in Shanghai used to count from 100th goods until there were twelve stores in twelfth stores. The department stores were located at the core of the city and district commercial centers. The city store, which was closed in 2003, was the symbol of North Sichuan Road commercial street.

With the increasingly fierce commercial competition, there are only five stores that still operate in department stores: 100th goods on the Nanjing Road, two hundred Yongxin, sixth department stores on the Huaihai Road, nine hundred city squares (formerly ninth Department stores), and Yongan department stores (formerly tenth stores), most of which have been closed or converted into brand stores.

In Guangzhou, the profits of retail, catering and other industries have declined since last year. Since 2012, the growth rate of comparable stores in the new world, Parkson, Jin Ying, Maoming, Yintai and Guangzhou local retailers such as Guang Bai and friendship has declined. High rents make restaurants, bookstores, including Gome, Suning, Pacific department store, Parkson, and the United States. Clothes & Accessories Stores were forced to move or close.

According to the data released recently by the National Bureau of statistics, the growth rate of retail sales of social consumer goods in 2013 1~2 was 12.3%, down 2.9 percentage points from the growth rate in December last year. After eliminating the Spring Festival factor, this value is the lowest value since 2006.

High cost, low profit, multi faced attack by electric providers

What caused the department store to leave the core business district which had always been fiercely competitive? High cost and low gross profit are one of the reasons.

Over the past two years, China's commercial real estate rents are showing a trend of rapid growth, especially the average annual increase in property rental costs of core gold business circle reaches double digits. According to the survey data from professional organizations, the annual increase in commercial property in Guangzhou is only about 5%~10%, and the hot area is more than 15%. Huang Wenjie, executive director of the Guangdong Circulation Industry Association, said: "compared with the ten years after 2000, the rent rose by a minimum of three or four times." A lot of hot money has been transferred from the regulated real estate and the weak stock market to the development and investment of commercial real estate, so that the price of commercial real estate has been rising frequently.

On the other hand, despite the limited market growth, the shopping mall market is still on the fast track.

In recent years, not only a large number of foreign brands and businesses have begun to pour into the country, but also in the domestic arena. Many domestic retailers, catering enterprises, movie chain enterprises, home appliance stores and other enterprises have taken the place. "There is a widespread demand for businesses, and the supply of commercial property is in short supply. At the same time, the high selling price also brings the owner's demand for high rental returns.

　　 In recent years, with the high cost, with manpower, logistics With the increase of all kinds of costs, the traditional department stores have entered the "meager profit era".

The core business circle of every big city is fiercer and fiercer. The department stores in business circles row upon row. Apart from individual outstanding personality and strong investment, most days are not easy.

Some shopping malls are now spending a lot of money on upgrading and upgrading. In order to ensure the gross profit margin of the market, the department stores have to raise the entry fee and the deduction point. In order to attract the top brands in the international market, shopping malls have to pay for decoration fees according to the requirements of suppliers. The cost of these two parts will eventually be passed on to consumers, indirectly pushing up the prices of goods, and the high prices will make consumers "stay away from home" and create a vicious circle.

In last year's global forum of department stores, Li Guoding, director and general manager of Shanghai Friendship Group Inc, once revealed that the United States, Europe and other regions that had adopted the mode of self operation were only 20% of the gross profit margin of Chinese department stores through point linked joint ventures, which accounted for half of foreign department stores.

In addition, the consumption habit of residents gradually shifted from offline to online. The electricity supplier quickly occupied the market through cheap price, convenient payment system, door-to-door service and so on. Coupled with rising labor costs and rental costs, the traditional retail living space is further squeezed.

Facing the increasingly complex market environment, many department stores have launched their own e-commerce platform. Wangfujing, Tianhong shopping malls, Lotte, Yintai and other departments of the department store test water business pioneer, is exploring a new road in the emerging field.

But for a small number of small and medium-sized department stores, they dare not speak lightly of the electricity supplier. On the one hand, electronic commerce itself burns money badly. Small business department electricity providers have no price advantage at first, and second and their product categories are not very different. It is very difficult to attract customers to the e-commerce platform shopping.

Huang Wenjie believes that for more hypermarkets, once the lease of the central store is expired, the transfer of shops to the suburbs with lower land costs is likely to become a trend. "And some small shopkeepers will set up shop on the Internet. It is reported that tens of thousands of new stores are born every day on Taobao alone.

"It can be said that a shuffle battle of commercial ecology has accelerated under the high rent of commercial property online." Wang Liuhe, Secretary General of the Shanghai general merchandise industry association, also admitted that in the face of the impact of online shopping, department stores should increase the grade of products and sell more products that need to be tried on. On the other hand, they should also enhance the service quality and make the future consumption of the public as a kind of enjoyment. {page_break}

　 From joint venture to self run transition mode or way out

The single format seems to be the bottleneck of the development of many traditional department stores, and the multi format shopping center has become the trend of many industry insiders.

"Consumers now pay more attention to family consumption, hoping to enjoy one-stop service in a shopping mall. Therefore, increasing the catering and entertainment formats, and shopping center transformation is the trend of development." This may indeed work in the short term, but it is not a permanent solution.

In the long run, the department stores not only failed to catch up with the sales volume of shopping centers and MALL, but lost themselves and lost the characteristics of the department stores themselves. The way out for a department store is to find a way for others.

In order to avoid this problem, more and more traditional department stores began to think about transformation from affiliation to self operation. However, due to the need for a transformation of the mode of operation, most of the large department stores now have a very small proportion of self employment. Even the Wangfujing department store group, which has a high profile of self-development capability, accounts for less than 2%.

Regarding this, Chen Liping, director of marketing department, School of business administration, Capital University of Economics and Business, believes that China's department stores are in urgent need of business innovation. It is best to adopt the mode of "joint operation + self run + leasing", of which 40% self run, 40% joint venture and 20% lease. Self run includes self run projects, self operated commodities, private brand development and brand agency.

　 Expert opinion

The mode of joint operation itself is not high in profit sharing. With the homogenization and price war, the profits of department stores in recent years have been getting thinner and thinner. However, the risks and costs of self employment are very high.

For many years, commercial enterprises have been operating in a joint venture mode. Buyers and other talents have been faulting. Secondly, the brand agency is not accomplished overnight. Before it could be discussed directly with the brand, it is now an agent. There are two levels of agents. There is a contract between the brand agent and the agent. It is impossible to turn around at once.

Fan Yanru, Deputy Secretary General of China Department Store Association

With the scarcity of retail network resources and the raging of rents, the industry will end the survival of the five generation and ten countries before entering the golden age of mergers and acquisitions. Next, through acquisitions, integration, resource optimization, scale expansion and market share, there will be a number of large enterprises that are competitive in the market.

But the new entrants to the market are being pushed up by the threshold to curb the inflow of fresh blood, which is very unfavorable to the enrichment of business.

Huang Wenjie, executive director of Guangdong Circulation Industry Association

It can be said that a shuffle war of commercial ecology has accelerated under the high rent of commercial property online. The core business circle of every big city is fiercer and fiercer. The department stores in business circles row upon row. Apart from individual outstanding personality and strong investment, most days are not easy.

Shanghai general merchandise industry association secretary general Wang Liuhe

For the big cities in the big cities, the format of big stores has gone through their glorious period, and it is possible to change their business models to the development of community stores and boutiques. But the two or three and four tier cities are still profitable.

First commercial network CEO Huang Huajun

China's economy has gradually entered the era of domestic demand after the development stage of investment and foreign trade in the past few years. "The state attaches importance to the domestic trade to a stage that has never been before. Some measures to promote the development of the retail industry may be introduced in the near future policy, which is also a great benefit to the retail business.

Li Chengbo, deputy general manager of Bai Da group