Wal-Mart shuts stores to fortify network
By Ding Yining |
01:05 UTC+8 March 27, 2013
|
Print Edition
Print Edition
Retail giant Wal-Mart will close a store in Shanghai on April 8 while two other outlets in Wuxi, Jiangsu Province, and Shenzhen, Guangdong Province will shut in the same month to streamline its sales network.
Hypermarket operators have faced rising pressure because consumers shun brick-and-mortar stores in favor of online shopping sites due to cheaper prices of daily necessities and fast-moving consumer goods. Higher labor cost and rent also squeezed their profits.
Wal-Mart said the closing of the outlet in Shanghai's Minhang District will optimize its overall business arrangement in the region, adding that this would not affect the company's development in the city, according to a statement sent to Shanghai Daily yesterday. "We would continue to invest in Shanghai and open new stores in the city," it said.
Wal-Mart still has 21 shops in the city after the Minhang store is shut.
It said last year it would open at least 100 new stores in China in the next three years, without elaborating on the locations of the new stores. Its pace of expansion has slowed down in recent years. Wal-Mart added 30 new stores in China last year, lower than the 50 new shops it opened in 2010 and 41 in 2011. By the end of last year the retailer has under 400 stores on Chinese mainland.
Wal-Mart, which holds 51 percent in Shanghai-based online shopping site yihaodian.com, also hopes its brick-and-mortar logistics and supply chain could synergize with the e-commerce business.
Online retailers are offering products that physical stores have not yet managed to deliver especially in lower-tier cities and retailers have been striving to keep up with that shift.
A recent study by McKinsey & Co suggested retailers should take both online and offline as equally important channels.
Hypermarket operators have faced rising pressure because consumers shun brick-and-mortar stores in favor of online shopping sites due to cheaper prices of daily necessities and fast-moving consumer goods. Higher labor cost and rent also squeezed their profits.
Wal-Mart said the closing of the outlet in Shanghai's Minhang District will optimize its overall business arrangement in the region, adding that this would not affect the company's development in the city, according to a statement sent to Shanghai Daily yesterday. "We would continue to invest in Shanghai and open new stores in the city," it said.
Wal-Mart still has 21 shops in the city after the Minhang store is shut.
It said last year it would open at least 100 new stores in China in the next three years, without elaborating on the locations of the new stores. Its pace of expansion has slowed down in recent years. Wal-Mart added 30 new stores in China last year, lower than the 50 new shops it opened in 2010 and 41 in 2011. By the end of last year the retailer has under 400 stores on Chinese mainland.
Wal-Mart, which holds 51 percent in Shanghai-based online shopping site yihaodian.com, also hopes its brick-and-mortar logistics and supply chain could synergize with the e-commerce business.
Online retailers are offering products that physical stores have not yet managed to deliver especially in lower-tier cities and retailers have been striving to keep up with that shift.
A recent study by McKinsey & Co suggested retailers should take both online and offline as equally important channels.
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