When Walmart entered the mainland Chinese market at the forefront of Shenzhen 17 years ago, a bunch of well-known foreign retailers, such as Parknshop, Carrefour, Aeon and Tesco, followed its step to explore opportunities in the country. However, ever since last year, the top three foreign retail giants Walmart, Carrefour and Tesco started to slow down on expansion or even close stores.
Walmart is planning to close 15-30 stores in mainland China in the next 18 months which account for 9 percent of its store count in the country, according to Shenzhen Evening News. On the contrary, China Resources Enterprise (CRE), the country’s biggest supermarket operator is accelerating its expansion by adding 49 stores in Shenzhen and 53 stores in Guangzhou next year.
According to CEO Hong Jie, CRE’s high-end Ole hypermarkets have registered double-digit profit growth this year. Hypermarkets and other retail formats have also reported profit growth. What’s more, Tesco’s stores in the country will be changed into CRE’s brands in the future.
For local Shenzhen people, the logos of CR Vanguard have been all over the city. Ever since CRE opened the first CR Vanguard supermarket in Futian District, there have been 24 hypermarkets and 195 convenience stores in the city.
Aside from the traditional hypermarkets and convenience stores, CRE has been trying to develop a multi-format business platform in the city. The group is now operating eight different retail formats which include more than 60 VANGO convenience stores, two high-end Ole hypermarkets, one blt store, one Fun2 shopping mall, 23 Pacific Coffee stores as well as Vivo, CR Care and Voi_la! stores. By the third quarter of 2013, the group has registered a turnover of CNY4.26 billion (USD701.7 million).
Within 20 years, CRE has developed from a simple supermarket operator into a multi-format retail conglomerate with specialty store chains, shopping malls and convenience stores. It’s operating 4425 store all over the country.
It’s reported in August that UK retail giant Tesco was close to form a joint venture (JV) with CRE, selling 80 percent stake of its 131 stores to the Chinese retail giant. The joint venture will combine CRE’s Vanguard business which currently operates 2,986 stores across mainland China and Hong Kong, with Tesco’s 131 stores in the country as well as its Chinese shopping mall business. The two parties reached the final agreement on 2 October.
According to CEO Hong Jie, Tesco’s stores in China will be changed into CRE’s brands. Once acquiring the 131 Tesco stores, CRE is going to be the retail bellwether in the country and the Chinese retail industry will be entering "CRE Era".