In 6 Months, 48 Supermarkets Were Shut Down. Xinhua, The Largest Retailer In Fujian, Lost 1.61 Billion In The First Half Of The Year.

Entering the 2019, the competition in the retail market is becoming increasingly fierce. Many retail enterprises are bankrupt or quit because of the pressure of competition. The traditional retail enterprises are facing more business challenges.


In the first half of this year, department stores, supermarkets and sports retail outlets, which are rooted in the Xinhua Plaza shopping mall in Fujian, have achieved a total revenue of 3 billion 2 million yuan, a decrease of 12.40% compared with the same period last year. The net profit attributable to shareholders of listed companies is -1.21 billion, which is 1826.84% lower than that of the same period last year. The main reasons are: to reduce the impact of loss shops on the company's performance and long-term development, and optimize the structure of the stores. The company carefully disposed of or closed down 48 stores which were about to expire, long term losses and adjusted losses after the adjustment was made according to the actual situation. The amount of compensation losses generated, and the one-time amortization loss of the decoration long stall and so on, were about 161 million yuan, which affected the semi annual performance of the 48 stores.


Up to the end of the reporting period, the number of Xinhua stores was 95, including 83 supermarkets, 6 department stores and 6 sports.


According to the insiders, Xinhua has already expanded too quickly in the new mode of supermarket business, and the profit of new stores has not been good. Since 2019, the company has improved its operating condition through adjusting series of measures such as adjusting losses, turning losses into hopeless stores, and dealing with loss business. Through continuous testing of water and new retail, digging up business potential, streamlining the layout of short-term performance pains is unavoidable and looking forward to further development.


Peng Yi, an analyst at Zhongtai securities, said that from the perspective of the overall market size of the industry, the domestic supermarket industry has steadily increased in recent years as the urbanization continues to advance and the per capita income continues to rise. The overall scale of the industry has exceeded 3 trillion. From the overall performance of the 9 listed supermarkets in 2018, the trend of warming up is obvious. The industry has ushered in a new development opportunity of relative certainty. However, due to the traditional regional distribution mechanism and the unrealized scale and intensive production of upstream agriculture, the industry still presents the characteristics of "big industry and small company". Most of the local supermarket enterprises are still in the stage of regional separatism, and the industry concentration degree is still lower than that of the mature markets in Europe, America and Japan.


Because of uneven regional development, different supermarket formats play different roles in different regions. Despite the rapid development of light assets convenience stores, the group oriented mainly focuses on the areas with strong consumption capacity. There are still opportunities for blue ocean development in the three or four tier cities. Therefore, having multi-channel and multi format operation capability is the core.


Huang Shouhong, a researcher at Anxin securities, believes that in the past ten years, the improvement of domestic Internet and logistics infrastructure and the imperfect retail system under the line have given the opportunity for the rapid development of the electricity supplier, making the online giants appear before the supermarket giants. This is different from foreign countries. Nowadays, with the marginal changes of the online and offline traffic and efficiency, the new retail business in the supermarket industry is surging, and the trend of double line convergence is gradually becoming clear. With the acceleration of industrial change, consumers' demand for better and more efficient enterprises will benefit from the improvement of concentration and accelerate the expansion by means of capital, personnel and brand advantages. This is not only a good way to seize the opportunity, but also an urgent need to improve the efficiency of the offline market and not to live in a corner.


In 2017, Xinhua also tried to develop new retail businesses in cooperation with ALI, and set up a new network technology in Fujian, holding 50%. In the first half of 2018, the new box losses increased in Fujian. In September 2018, the company transferred 40.5% of its holdings. In June 2019, Xinhua also held 51% of its new retail brand "Hai Wu Hui" and transferred it to 1 yuan. The new retail industry is still in various stages of trial and error.


Public information shows that the main business of Xinhua is chain stores of hypermarkets, supermarkets and department stores. After a long period of development, the "Xinhua capital" brand image enjoys a high reputation and reputation in Fujian province and even the whole country. The company has won the title of 30th anniversary outstanding enterprises in China's reform and opening up, well-known trademarks in China, famous trademarks in Fujian, leading enterprises in Fujian, and is one of the largest circulation enterprises in Fujian province.