Why Profit In Domestic Department Stores Is Difficult

Profit margins gradually narrowed, and department stores became "fitting rooms".

One piece

Is it really worth hundreds of thousands of dollars? Actually, it does not necessarily mean that when it is displayed in a beautiful and beautiful department store, its price is quite different from that installed in the express box.

The industry pointed out that even if the department store "seventy-two changes" it is almost impossible to escape into the fate of the fitting room.

According to Zhao Ping, deputy director of the Consumer Economics Research Department of the Ministry of Commerce and international trade and Economic Cooperation Research Institute, the domestic department store's business mode is 90% of the joint venture and 10% of self employment, that is, the brand managers who are stationed in department stores control the entry, sale and storage of goods, and the pricing power of goods, and the employees who sell the goods belong to the brand dealers. The department stores are only responsible for providing venues and services, and then get the deduction rate from the paction volume, so it is called the two landlord.

With the upgrading of consumption, shopping centers continue to appear, and department stores begin to compete for brands with high market maturity.

When the bargaining power of the brand enterprises is stronger and stronger, the department stores are unable to integrate the upstream enterprises, and the profit space is narrowing gradually.

It is reported that at present, China

The gross profit margin is around 17%, while foreign counterparts have 30% gross margins because of their ability to operate goods and develop their free brands.

"Obviously, no matter how much the department stores are promoting, they can not compete with the electricity supplier. In terms of format, they are not as good as shopping centers to satisfy consumers' leisure needs such as shopping, dining and entertainment."

Fan Yanru, Deputy Secretary General of the Chinese Department Store Association, said that the discount sale seems to be aimed at dealing with the "price war" of the electricity supplier, which in fact reflects the weakening of the self retailing capability of department stores.

What is worrying is that industry analysts say that department stores promotion still stays in the old way of using "full reduction" and "full delivery" to celebrate festivals and festivals. Although sales can be increased, the gross margin will also be lowered.

And discount sales promotion can only be used as a short-term strategy, not a long-term solution, can not solve the essence of the problem, but also affect word of mouth.

Zheng Liangyu, deputy general manager of Limited by Share Ltd group of Limited by Share Ltd and general manager of Ginza department store, said that at present many

Serious competition in homogenization, inaccurate positioning of goods and inadequate service have become the main obstacles to development.

At the same time, wages, utilities, and decoration costs are rising, and the profit margins of department stores are decreasing.

An analyst who did not want to be named said that the traditional retail form of department stores would gradually withdraw, especially in the first and second tier cities, and the retail format would be dominated by commercial complexes providing shopping, catering and entertainment services.

Recently, many Wanda stores have been closed down, causing people to think about the dilemma of the existence of entity stores.