The Lianhua Supermarket group has reported an operating loss of about RMB149 million (US$23 million) for last year.
Turnover, at RMB27.223 billion, was down about 6.6 per cent, same-store sales fell 6.48 per cent and gross profit decreased by 5.2 per cent to RMB4.022 billion.
Meanwhile, the group opened outlets in major developmental regions to solidify its market position, and closed stores that were losing too much money. As of December 31, the group had 3883 stores, about 83 per cent of them in eastern China.
The group also built up its omni-channel commercial model.
During the year, the group’s hypermarket turnover slid about 5.1 per cent to RMB16.6 million, accounting for about 61 per cent of total turnover. The dip was about 9.6 per cent for the supermarket segment, with turnover of RMB8.6 million, accounting for about 31.7 per cent of the group’s turnover. For its convenience stores, turnover eased about 2.2 per cent to RMB1.97 million, about 7.2 per cent of total turnover.
Lianhua Supermarket chairman Ye Yong-ming says the group’s performance had been hit by an “unusually severe” operating environment.
During the year, the group introduced a strategic investor, Yonghui Superstores, as the second-largest shareholder. It also opened 204 stores and shut 612, of which 520 were franchise stores.
It also opened five hypermarkets and closed five others, as well as launching 123 supermarkets, 112 of them franchised. Also, 76 convenience stores were opened, 53 under franchise.