QKL Stores, a regional supermarket chain in Northeastern China and Inner Mongolia, says its third quarter same store sales fell 2.6 per cent.

Total sales rose 3.2 per cent, but the company lost US$5.5 million, compared to a loss of $1.7 million in the same period last year.

Same store sales in the 44-strong chain were down 2.6 per cent.

Zhuangyi Wang, chairman and CEO, said, the results generally met expectation.

“The variety, value and freshness of our products continue to resonate with our customers driving sales higher. This store growth was also driven by in-store promotional events such as store anniversary celebrations.

“We plan to open two stores before year end. The new stores we will open in the future will be located in Daqing City where we have stronger relationships with local vendors and the cost of goods is slightly lower than the other cities in which we operate,” he said.

“The environment of retailing business is still challenging mainly due to the rising costs and the emerging e-commerce channel. However, we are still confident on the domestic needs because of the urbanization of the third and fourth tier cities that we will achieve a fundamental improvement in the consumer purchasing power during the process.”

Sales revenue in the three months to September 30 increased by US$1.9 million, or 3.2 per cent, to $61.1 million. The company now has 46 supermarkets.

“We look forward to the upcoming holiday season as we have a number of exciting marketing initiatives planned. Our balance sheet is healthy with a strong cash position, low level of debt and stable flow of cash from operations. We continue to make progress with our store operations and that can result in greater sales and profits over time,” said Wang.

QKL Stores is listed on the US Nasdaq exchange.