Following the closure of Guangzhou Wangfujing Group Co.Ltd(600859) at the beginning of this month, the modern department store (hereinafter referred to as “modern shopping”) and Guangzhou dongbaihuadiwan department store (hereinafter referred to as “dongbaihuadiwan”) also issued a closure announcement recently. It is reported that the department stores of modern sea shopping have been closed since December 31, 2021; Dongbaihuadi Bay will also close on January 9, 2022.
The reporter’s visit found that many citizens expressed “reluctance” to the recent closure of three old department stores in Guangzhou, but also said that “they have been psychologically prepared. It has been observed that the flow of people in department stores has decreased in recent years”. Relevant analysis shows that the department store industry has been greatly impacted by factors such as homogenization and multi-channel extrusion of (retail) industry. Under the catalysis of the epidemic, the pace of reform and reshuffle of the department store industry has gradually accelerated, but there are still unsolved problems.
old department stores closed
“I’ve heard from my friends these days that modern sea shopping is going to withdraw. Come and have a look. Last month (Guangzhou) Wangfujing Group Co.Ltd(600859) said it was going to withdraw. I went to see it specially. Ten years ago, Dongshan Department Store from Wangfujing Group Co.Ltd(600859) department store along Nonglinxia road to Shuqian road was the best shopping and eating place in Dongshan business district Route. Now we have to withdraw here. It’s really an era that has passed. It’s a little reluctant, “a Guangzhou citizen told reporters on the afternoon of the 28th.
“But it’s really cold to see department stores in recent years. Young people don’t like shopping. Sometimes it seems that there are more staff than customers. It’s also time to transform and upgrade and keep up with the trend.” These people further said.
According to the recent announcement of modern sea shopping, the department store of modern sea shopping will be closed from December 31, 2021, and the non department store (including a drugstore, convenience store, etc.) will continue to operate. Dongbaihuadi bay also issued a closure notice recently. Due to the expiration of the property contract, dongbaihuadi Bay Company will close its store on January 9, 2022. In addition, Guangzhou Wangfujing Group Co.Ltd(600859) department store previously announced that it had closed its business on November 30 due to the expiration of the site property lease contract.
In just a few months, three old department stores withdrew one after another. Many “laoguang” lamented and regretted this, but it can also reflect the current operation status of the department store industry from the side.
According to relevant media reports, the relevant persons in charge of modern Haigou and dongbaihuadi Bay mentioned that the main reason was rent in response to the “withdrawal point”. “Dongshan Department Store is unable to bear the high rent due to the 30% rent increase of the owner,” said a relevant person in dongbaihuadi Bay The relevant person of modern overseas shopping said, “since the outbreak, the business of the physical retail industry has been greatly affected. As the lessee, modern department store has reduced the rent to the on-site merchants twice, but the owner not only did not reduce the rent, but also increased the rent every year in strict accordance with the lease, with a monthly rent of nearly one million yuan.” In the current environment, I can no longer afford the high rent and labor cost, so I decided to close the store and quit.
Some retail industry analysts told reporters, “The impact of online channels and the fierce competition of new retail formats such as offline shopping centers are superimposed on the epidemic situation. At this stage, traditional department stores are facing the cost pressure of rent and labor, which requires the company to actively find solutions. Under the background that the living space of the Department Store Industry is squeezed, the key to the future development of the department store industry is to reverse the business ideas and find the transformation direction in line with its own development Difficulties. ”
self help under new retail
As a traditional retail format, how to adapt to the change of consumption trend and regain the “heart” of consumers is an important topic in front of enterprises. The reporter found that at present, the transformation direction of many department stores is still being explored and has made different progress, but online integration is almost “necessary for every company”.
The relevant staff of Guangdong Highsun Group Co.Ltd(000861) (000861. SZ) recently told reporters that at present, the Department Store sector is profitable and relatively stable assets for the company. In the future, the diversion function of “Haiyin life” e-commerce platform will be improved. At present, the online mode is still in the promotion stage. According to relevant sources of Yinchuan Xinhua Commercial (Group) Co.Ltd(600785) (600785. SH), at present, the operation of the department store is relatively normal, and the company will continue to promote the integrated development of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) in the future, which is the future trend of the industry. Dalian Friendship (Group) Co.Ltd(000679) (000679. SZ) said, “the company’s retail industry is mainly concentrated in Dalian with fierce competition. In the future, it will continue to strengthen marketing strategies and enrich the structure of goods and services.”
It is worth mentioning that the relevant person of Shanghai Bailian Group Co.Ltd(600827) (600827. SH) said, “As some department stores have problems such as small commercial area and unsatisfactory parking environment, the follow-up companies may consider making targeted transformation and upgrading in combination with the characteristics of different department stores and the characteristics of surrounding business districts, hoping to achieve” one store and one policy “. Recently, the new projects of the company are mainly shopping centers and outlets. At present, the retail formats of the company include department stores, shopping centers and outlets Outlets, large general supermarkets, supermarkets, convenience stores, professional chains, etc. ”
In terms of Guangzhou Grandbuy Co.Ltd(002187) (002187. SZ), stores have been upgraded since last year. In September last year, the comprehensive optimization and upgrading of the cosmetics and skin care products area on the first floor of guangbai Beijing Road store was completed. Recently, phase II upgrading was carried out again for Beijing Road store. According to the company, the effect of the new upgrade of the store is obviously reflected in the sales data, and the overall passenger flow of the mall shows a younger trend. Beijing Road Xindaxin has added the element of “national style” to the decoration, and also hopes to attract more consumers with more distinctive punch in commemoration and consumption experience.
Despite the fact that companies in the industry have offered “upgrading” schemes, there are still many problems. The China Department Store Association recently said in the official account that the development of the department stores is facing four main problems: the urgent need to upgrade commodity quality, the urgent need for transformation and upgrading, and the difficulty of digitalization in the system and the challenge of self mining.
In this regard, some industry analysts said, “at present, most of the transformation still focuses on the format of department stores themselves, but from the perspective of the company, the ‘reform’ of making a small fuss may not fundamentally solve the problem. Accelerating the digital upgrading and trying new formats, and making subversive reconstruction and Reform Based on the company’s own advantages are the key to victory.”
Yang Qingsong, Secretary General of China department store business association, also said recently, “store adjustment and improvement of experience is not a simple shopping mall, but should involve all aspects of operation and management such as service, contact, scene and supply chain. It is multi-dimensional.”
(Financial Associated Press)
