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February 17, 2012

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Market closing free bus service due to high cost

A popular hypermarket is axing its free shuttle bus service at some downtown outlets because of cost pressure and too many non-shopper riders.

Hypermarkets in Shanghai started offering free pick-up service about a decade ago to attract customers. Now one of the leading brands in Shanghai, the Century Lianhua Supermarket, is shrinking the service to cut costs that are deemed inefficient.

The outlet, the latest among a batch to stop offering free bus pick-up, is located in the Huamu neighborhood in the Pudong New Area. An announcement was posted inside the Huamu store, saying all three daily shuttles were ending since the beginning of this month.

The closure was opposed by many customers, and the store received plenty of complaints. The shuttle routes used to pass several populous housing compounds around the area.

While some residents complained about the inconvenience, store managers said it was a strategic decision to combat surging fuel and labor costs. The store managers said they found a big portion of the daily riders were not shoppers but simply people using the shuttles as a free transit tool. The managers also reported that most riders were light shoppers, not purchasing a lot of goods.

Many of the daily riders on local supermarket shuttles are seniors and housewives. This group, especially the elderly, usually has plenty of time and some prefer riding the shuttles among different supermarkets around their neighborhood until they spot the store offering the lowest prices, according to industry insiders.

Insiders said the stores also were eager to shed the risks of running into injury-compensation disputes.

Some managers at other markets said that since many riders were old, they were more likely to suffer injuries or suffer outbreaks of disease, for which they usually demand cash compensation from the supermarkets.

Other leading hypermarkets have not reported plans to close shuttle buses.

"We spend more than 100,000 yuan each month to run the free shuttle buses at our store," said a manager with an Auchan supermarket outlet.


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