Chinese retailer Lianhua said net profit has declined from 339.9 million yuan ($54.7 million) in 2012 to 53 million yuan ($8.5 million) in 2013.

The retailer, which operates more than 4500 hypermarkets, supermarkets and convenience stores across China, attributed the erosion on challenging trading conditions, tougher competition and rising costs.

“With the slowing down of China’s economic growth, increasingly intense competition in the retail chain industry, changing consumer habits and rapidly growing e-commerce, the traditional retail industry has reached an inflection point,” said chairman Ma Xinsheng.

Notwithstanding the difficult trading environment, Lianhua plans to open 300 new stores, including four to five hypermarkets, 150 supermarkets and convenience stores.

It says it will continue to push transformation of its outlets to ensure the overall profitability and brand image of the company.