Tesco And Huarun Integrate Slowly To Close All Stores In Shandong.

TESCO has closed stores in Jiangsu, Anhui and other places. Recently, media reports reported that as of November 2nd, 6 Tesco shopping centers settled in Shandong have been fully closed.

Previously, the market has speculated that Huarun and Tesco are among the two.

"Postponed indefinitely".

Recently, however, customs stores seem to have overturned this claim.

It is reported that the two sides have completed the switch of core business system integration in Southern China area, but the integration plan of Huarun is to complete the docking and switching of personnel, assets and retail background management system by the end of this month.

Cooperate with strategic layout of joint venture company

According to reports, the Tesco supermarket, located on the Second Ring Road East of Ji'nan, Shandong, is about to close. The store is the first one to purchase Tesco in Ji'nan. It opened in September 2009 with an area of nearly 10 thousand square meters.

Yesterday, the reporter called the Tesco Ji'nan Second Ring East Road store as a consumer. The other side said that the business is still continuing, and the time for closing the store will have to wait for the announcement from the headquarters.

It is worth noting that not only is Ji'nan Second Ring East Road store, Tesco Ji'nan four road store has also posted a notice recently, saying that Tesco membership card points will be incorporated into Huarun's 10000 member system.

In addition, Tesco Qingdao Jimo store also confirmed that it will close.

So far, 6 stores opened in 4 cities in Shandong during the 5 years of Tesco will be closed.

In the industry's view, the total withdrawal from Shandong is only Tesco China.

Microcosm.

In May, Huarun, China's largest retailer, announced that the joint venture agreement between its parent company China Resources Enterprise Ltd and the British TESCO was approved. The two sides will form a diversified retail joint venture. TESCO's Chinese business, including Tesco, will be wholly incorporated into the joint venture company. TESCO owns 20% of the joint venture company, and Huarun owns 80% of the joint venture company.

In May 29th, Huarun Wanjie CEO hung Jie said that in the future, the 135 outlets of Tesco will be reunified to "Huarun 10000" to achieve brand expansion.

After the two sides announced the corresponding plan, Huarun integrated the Tesco store seems to have entered a "low key period". The market once questioned its progress, and more news pointed out that the integration plan of both sides was "postponed indefinitely".

Recently, however, news about Tesco's close shop has spread.

One insider confirmed to reporters that several stores in Shandong were closed. "It is aimed at adjusting the existing industry layout in Shandong, in order to complete the strategic layout of the joint venture."

In addition to closing stores, Huarun Wanjia also opened new stores in Shandong and other places.

An industry insider told reporters that in the same area, Tesco and Huarun Wanjia could be competitors before, and stores would cover each other. After the establishment of a joint venture company, it is necessary to shut down for a reasonable layout.

Prior to this, Huarun plans to complete the integration of Tesco three times in two years.

The first phase, by the end of November 2014, the two sides have to complete the docking and switching of personnel, assets and retail background management system. The second stage, the performance of Tesco stores has been continuously improved before the end of March 2015; the third stage, at the end of March 2016, all stores of Tesco completed the logo replacement.

At present, the integration of the two sides is still in the first stage, and there is still a distance from the target.

According to the original plan, system switching and integration should be completed in accordance with the order of Southern China, North China, East China, Northeast China and Shanghai before November 30th.

However, reporters learned from Tesco that the integration of the Southern China market has only been completed, and other markets are still advancing. North China will complete the docking and replacement of the relevant systems in early December.

On the market integration schedule, reporters interviewed Huarun, but as of press time did not receive a reply.

In the view of the industry, a foreign chain giant with more than 130 stores and 25 thousand employees in China and a chain retailer with 4600 stores are more difficult than expected.

Liu Hui, chief analyst at Zhao Yi's zero Business Management Consulting Co. Ltd., said that it is unlikely that Huarun's integration plan will be completed. Replacing the logo is not a problem, but the docking and switching of the background system and the integration of stores need to take a long time.

He pointed out that closing shop from observation to final determination is not completed in the short term.

In Liu Hui's view, Huarun's integration of Tesco does not seem appropriate or even a mistake.

A retail analyst told reporters that under the background of the poor performance of the domestic hypermarkets, most of the stores of Tesco were not profitable, and there were still many challenges in Huarun's performance.

Of course, there are opportunities if there are challenges.

At present, Huarun Wanjia is introducing Tesco's related private brand, and it is estimated that by the end of the year, Huarun will have about 750 categories of Tesco products.

In the industry, it takes time to digest the quality resources acquired by Tesco, and once the integration is effectively realized, the new Huarun will replace Gao Xin retail group, which is made up of big Rand and Auchan, and become China's largest FMCG retailer.