Department Store Industry Is Entering A Period Of Micro Growth.

< p > recently, at the annual China department store summit, Chu Xiuqi, President of the Chinese Department Store Association, made a special report on the development of China's department store industry in 2012.

Chu Xiuqi said in the report that in 2012, the statistics of 81 large and medium-sized retail enterprises, which were only counted by the general merchandise Association, showed that the total sales volume of these enterprises increased by only 8.92% over the same period last year, much lower than the 22.2% increase in 2011.

At the same time, the total profit of the 81 enterprises decreased by 6.14% compared with the same period last year, and the profit margin dropped by 20.21%.

Chu Xiuqi said that with the changes in the environment at home and abroad, China's department stores face more extensive and complex markets, and the challenges and opportunities they encounter are more diversified. At present, the industry is entering a period of micro growth, and department stores must adapt themselves to the situation and seek their own changes and innovations.

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< p > industry consensus is that with the commercial resources of the second tier cities becoming saturated and business competition becoming increasingly fierce, the three or four tier cities in the future will become the focus of the development of department stores.

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< p > < strong > three main causes led to slower growth of the industry < /strong > < /p >

< p > "2012 is a rather difficult year for the whole department store industry."

Chu Xiuqi said that by the macroeconomic and other factors at home and abroad, the department store business cost continued to rise in 2012, the overall growth rate of sales volume declined significantly, profits fell and pressure increased.

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< p > last year, sales growth of the general merchandise retail industry generally dropped.

According to the annual statistics of 81 member enterprises of the Chinese Department Store Association in 2012, the total sales volume of department stores was 228 billion 270 million yuan, up 8.92% from the same period last year, with a total profit of 6 billion 10 million yuan, down 6.14% from the same period last year.

The profit margin was 3.08% on average, 0.78 percentage points lower than in 2011, a drop of 20.21%.

In 2012, the operation area of 81 member enterprises increased to 14 million 84 thousand square meters, an increase of 8.95% over the same period last year.

The average number of employees was 225 thousand, an increase of 6.04% over the same period last year.

According to statistics of 43 listed companies in Shenyang Wanguo department store, 11 companies' revenue in the third quarter decreased year over year, accounting for over 1/4, while net profit fell 20, accounting for nearly 50%.

In the first half of the year, 65 key department stores in Beijing realized sales of 36 billion 810 million yuan, an increase of only 5.9%, and sales of negative growth enterprises exceeded 30%.

Among them, the high-end department store Xinguang world growth rate dropped by 27.9 percentage points compared to the same period last year.

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< p > Chu Xiuqi said that there were four main reasons for the slowdown in the sales volume of the department stores last year: first, the impact of the macroeconomic situation.

The real economy is tight and the virtual economic downturn has been passed to the retail terminal.

In addition, real estate regulation has led to a significant impact on sales of real estate related commodities such as home appliances and household appliances.

Two, the number of new stores is increasing and competition is becoming more and more serious.

The first is competition from entities.

At present, the construction of commercial outlets in many cities has exceeded the market demand, and some enterprises are expanding rapidly in pursuit of market share.

The second is the competition from the Internet. The electricity supplier has brought a huge impact to the department store, which has diverted a large number of sales of physical stores.

In recent years, with the upgrading of the credibility of e-commerce and the drop in prices of online sales, the high price of goods in department stores is one of the important factors affecting sales.

Three, it is affected by the deteriorating business environment.

First is the disorderly rise of commercial real estate rents, and the rents of department stores have also increased substantially; the second is the rising cost of human resources.

In addition, corporate publicity costs have also risen.

At the same time, the consumption of shopping cards and stored value cards declined generally in the first half of the year as a result of the state's strict control over the consumption of shopping cards.

Therefore, the superposition of macro factors and business management factors result in the overall business dilemma of the department stores.

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< p > < strong > three or four line city is expected to become hot spot < /strong > < /p >.

< p > "the trend of the future is that the department stores will change to the complex, and the department stores in the three or four tier cities will be more active."

Chu Xiuqi said that despite the slowdown in industry growth, the expansion of industry mergers and acquisitions is still frequent and innovative means of profit making. The three or four tier cities will become the main battleground for the department store competition.

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< p > domestic retail industry is gradually forming a pattern of high market concentration and large enterprise scale. The national retail group and regional large scale comprehensive retail enterprise can occupy an advantageous position in the fierce market competition.

The expansion of department stores to other formats has intensified, such as high-end supermarkets, online shopping, gas stations, hotels, logistics, finance and so on.

Meanwhile, regional development of department stores has been deepened and expanded.

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< p > "compared with the commercial resources and high operating costs of the second tier cities, the consumption demand of the three or four tier cities continues to grow and the consumption potential is huge, which is the blue ocean of the future of the retail market."

Chu Xiuqi said that the housing prices and living costs of the three or four tier cities are relatively low, and the per capita income continues to grow. The actual disposable income of consumers may not be lower than that of the second tier cities. Compared with the first tier cities, the three or four line cities are relatively less affected by the economic downturn and online shopping.

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< p > research shows that the average household monthly income of 15 to 45 years old urban consumers increased significantly last year than that of the second tier cities in the same period, which is also higher than that of GDP in the same period. This shows that the consumption potential of the three or four line cities is huge.

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< p > at the same time, compared with a second tier city, the opening cost of the three or four line cities is obviously much lower.

A professional survey shows that most of the first tier cities such as Beijing shopping mall rent more than 2 yuan / square meter / day, while in the three tier cities usually only 0.5 to 0.6 yuan / square meter / day, four line cities are lower.

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< p > Fu Yuehong, general manager of Beijing new Yansha Commercial Co. Ltd., said that in her observation of the three or four line cities, the business of these cities tended to be concentrated in one center, and the department store was very vigorous under the condition of a central business gathering.

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< p > "for large cities, the mode of self employment is restricted by many aspects, such as brand channel and consumer identity.

But for the three or four tier cities, there are no such problems. Even the self run mode will help the development of department stores and give them more advantages.

Xiu Qi believes that consumers' brand awareness of the three or four tier cities still needs to be improved, and they will not particularly pursue brand names. Most consumers' consumption habits are still buying practical and affordable products.

Therefore, the department stores in the three or four tier cities can increase the proportion of self purchase, understand the needs of consumers, and purchase intermediate brand goods that meet the local consumers' positioning.

Moreover, the suppliers of mid-range brands are numerous, the threshold is low, and there is the desire to open up the market. Cooperation with department stores in the three or four tier cities can achieve a win-win situation.

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< p > from the perspective of development reality, the retail industry of the three or four tier cities is still a fast growing area of department stores.

The survey report of the first three quarters of 2012 by BBK group, the largest retailer in Hunan, shows that the department stores in the past two years are relatively short incubation period, and Yueyang stores are profitable after half a year's opening.

At present, BBK is developing BBK Plaza Project in Hunan, Chenzhou, Huaihua, Jiangxi Yichun, Ganzhou and other places. According to the plan, BBK will also debut in Guangxi, Guizhou, Sichuan, Chongqing and other surrounding provinces and cities in the next 3 years.

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< p > many large department stores also have the trend of sinking channels, and more and more department stores are in the layout of the three or four tier cities.

After basically completing the strategic layout of the national department store chain, the Wangfujing department store began to plan the surrounding regional market.

Last year, the high level of Wangfujing department stores visited Sichuan, Yibin, Neijiang, Nanchong and other places frequently, releasing the signal that Wangfujing department store will soon enter the three or four tier cities.

Intime department store is aiming at deep ploughing in two or three line cities, with more than 30 stores nationwide.

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< p > Chu Xiuqi said, at present, the development space of the new stores in the second tier cities in China is very small. The competition in the retail market of the second tier cities will mainly be reflected in the merger and acquisition.

With the acceleration of the construction of logistics distribution facilities in some large retail enterprises, the function of logistics distribution has increased, and the confidence and ability of the three or four line cities have been improved rapidly.

These factors stimulate the retail enterprises, including foreign-funded retail enterprises, to accelerate their expansion to the three or four tier cities, and the three or four tier cities will become the main battleground for retail enterprises to compete.

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< p > however, Chu Xiuqi reminds us that although the three or four line cities are already the goal of the department stores competing for the layout, the department stores also need to identify the location, conduct a full investigation of the three or four line cities, understand the local consumption habits, cultivate a good market base and avoid problems such as acclimatization.

In addition, the self-employed mode of department stores in the three or four tier cities will have great development advantages.

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