Electric dealers erode traditional retailer territory: 10 Companies

In the past two years, the electric power industry has been developing unusually fiercely, which has caused the traditional retail trade to encounter a small impact. Some insiders even boldly predicted that the industry is nearing the end of the day.

The fact also confirms the slump in traditional retailing. When the end of the day, it is the department store market booming, Beijing Wangfujing Yang Hua Tang song-song shop at this time to "adjust the business structure" as a reason to stop business. Coincidentally, the lotus flower in January announced the closure of Beijing Grass Bridge shop. In the past year, Li Ning, and other sports brands such as the horse closed 1200 stores nationwide, Home Depot withdrew from China, Wal-Mart closed four stores.

Just as the retail giants are retreating, the electric business is frantically expanding, the "Double 11" day, the day cat Taobao up to 19.1 billion yuan of business income let the whole market boiling, this is the traditional retail industry can not write the movement.

How many traditional retail companies will have to retreat under the strong impact of the electricity dealers? The data Research Department of "investor" has analyzed 42 retail listed companies in the current a-share market and screened out 10 of the most impacted companies, including Minsheng Investment, island construction and Shanghai 900.

What needs to be explained is that this time we will limit the retail category in the retail business, because relative to provide the necessities of life supermarkets, department stores and retailers are the hardest hit by the impact of the electricity business.

In addition to the electrical business impact of the external factors, too much cost, the delay in the expansion of the internal factors such as the cold winter to make these companies worse.

10 Companies hit hardest

With the gongchenglvede of consumers in the consumer sector, some traditional retail companies are likely to be replaced.

Who would be the first to fall? To this end, we studied the department store retail industry (according to the SYWG industry classification) within the 42 companies, according to its 2012 years ago, three quarters of the operating conditions of 10 of the most likely to be replaced by electricity companies.

Our filtering process is as follows: First, the company's net assets yield, sales profit margin, per capita operating income, per capita net profit of four indicators respectively assigned to the same weight, selected 15 comprehensive lowest score companies, and then inspected 15 companies operating income and net profit growth, the final selection of 10 companies.

They are: People's livelihood investment, island construction, Shanghai 900, Wuhan, ZTE Business, Guang Hundred shares, Xi ' an people's livelihood, Jin advised industry, Nanjing China Merchants and Han business group. We have a comment on the 10 companies in the following article. In these companies, people's livelihood investment and island construction performance is the worst, the two companies 2012 years ago three quarters have been lost.

Among them, the livelihood of investment, although the scope of business for equity investment, asset management, capital management and related information and services. But its main income comes from the retail trade, its son company Qingdao Domestics Hailida Shopping Center Co., Ltd. has contributed most of its profits. The subsidiary company in the first half of 2012 to achieve operating income of 248 million yuan, 0.69% year-on-year, to achieve net profit of 6.6824 million yuan. People's livelihood investment in the three quarter of 2012 years before the loss, operating income and net profits fell sharply year-on-year. January 21, the company announced that, due to the trading of financial assets fair value changes in income increase, 2012 year is expected to profit 59.3 million yuan. However, its earnings report pointed out that the company's retail business facing increased difficulties, the future profitability of a greater uncertainty.

Another loss of enterprise is the island construction. 2012 years ago, the company's net profit fell 126.07% in the three quarter, ranking second in 42 department stores and retail companies, second only to people's livelihood investment. In addition, the company is 2012 years ago in the three quarter of the department store companies in the worst losses, the loss of 33.2884 million yuan.

Market share has been eroded by electricity dealers

In the process of screening the above-mentioned enterprises, we found that the entire retail industry's revenue growth is slowing, while the electricity quotient in a strong rise, eating up the traditional department stores in the retail market share.

According to wind data, retail sales grew at 8.21% in the three quarter of 2012 years ago, compared with 20.56% in 2010 and 18.57% in the same period in 2011. The industry's 2012-year income growth has fallen by more than 10% per cent compared with previous years.

The decline in net profit growth is even more serious. In the three quarter of 2012 years ago, the net profit growth rate of department stores was 5.45%, but in 2011 and 2010 the same period, the growth rate was 32.55% and 33.13% respectively.

The data show that 2012 years of traditional department stores are declining. At the same time, electricity dealers are rising.

China's E-commerce Research Center monitoring data showed that in the third quarter of 2012, China's online shopping market transactions amounted to 294.3 billion yuan, compared with the third quarter of 2011 year-on-year growth of 36.9%, and the second quarter of 2012 5.7% Quarter-on-quarter increase.

The development of electric dealers has begun to encroach on the market share of the online merchants. Suning Appliance As an example, its electricity Shang Sunin easy to purchase the development of the offline store has been shrinking. In the first quarter of 2012, the number of newly opened chain stores was lower than that of the closed/displaced chain stores, which opened 37 stores in the three quarter, but also closed/replaced more than 59.

The electric dealer can occupy the market so quickly without its unique advantages: low price, convenient payment system, door-to-door and return quickly thoughtful service. More and more consumers of consumer habits from offline to online, online shopping has become an indispensable part of their lives, to the physical store consumption time and amount of natural decline.

Of course, the decline of traditional department stores has its own reasons. UBS Securities Consumer Goods Research analyst Leung that the traditional department store in 2012, the reason for the negative growth of the shop's wife, one is that some of the new department stores have skating rink, cinemas and so on, such comprehensive shopping malls will divert a number of old grocery store passenger flow; the second is that the old store has little or Led to a decline in the flow of some old department stores.

High cost and expense to compress profit

In addition, the cost of the high proportion of the traditional department store is also a chronic disease.

According to the financial data of 42 retail listed companies in 2012 three, these companies are generally profitable, but the level of profitability is not high, mainly because the cost is too high, above the rest of the industry average.

In the three quarter of 2012 years ago, 40 of the 42 companies were profitable, and in the two loss-making companies, the retail business of Minsheng investment was also profitable. But its overall sales net interest rate is low. Data show that 2012 years ago three quarters, the overall sales net interest rate of the department store retail industry was 3.84%, while the net interest rate of all A shares was 8.99%, while the latter was twice times more than the former.

The low net selling rate is mainly due to the high cost of the above-mentioned companies. 2012 years ago three quarter, the total operating cost of retail sales accounted for 95.26%, compared to the overall level of a shares of 94.94% higher, operating expenses accounted for the proportion of operating income of 8.54%, is a share of the overall level 3.44% times more than twice.

The industry's total operating costs and operating costs are not 2012 years before the problem, 2011 and 2010 data also showed the same rule: the total operating cost of retail business accounted for the proportion of operating income is higher than the overall level of a shares, operating expenses accounted for the proportion of income is a share of the average level of about twice times.

Industry insiders believe that the department stores into the high cost of operation, not only because of its own labor-intensive enterprises, but also high energy consumption of hydropower enterprises. At the same time, if the store is not owned by its own property, rent pressure is also very large. The above mentioned Wangfujing Yang Hua Tang song song Shop, the main reason for its closure comes from rising rents.

The rise in labor costs has also increased the cost of the department store. According to our statistics, of the 42 department stores, 30 employees in the end of 2011 more than 1000 staff, 6 employees more than million people, the most of the friendship shares, the year the number of employees reached 54599, and 2010 the number of employees of the company is only 13334 people. From the entire industry, from 2010 to 2011, the number of employees increased by 68882 (the above statistics do not include the 2012-listed Cui Wei department store).

The increase in labor costs and the rise in rents have put a lot of pressure on department stores. The first 10 hundred shares have suffered, the company 2012 years ago three quarter operating income growth slowed, the cost of climbing. According to the Guangzhou Land and Housing Authority released in the first half of this year, "2011 Guangzhou House Rent Reference price" shows that 2010 ~2011 year, only Guangzhou region, the overall rental growth of commercial shops around the 5%~10%, the popular regional rent increase is more than 15%.

Expand in different places and lower gross margin

In addition to the high cost of eating into the company's profits, the different places to expand the acclimatized to reduce the margin is also a cause to be ignored.

In the analysis of retail company profits by region, we found that the gross profit margin outside the main place of business is generally lower than the main business area. This shows that these companies in different places when the expansion of the acclimatized to lower the company's overall gross profit margin.

Of the 42 companies, a total of 18 companies in the 2012-year report published in more than two areas of operating income and profits (the profit refers to gross margin), of which 15 companies ranked second in the area of business gross profit margin than the first area of small, especially with the biggest gap between the largest, 52.25%. The other three although the second business area gross margin is higher than the first region, but the extent does not exceed 1%.

Leung that, of the 58 retail companies they tracked, 6 years ~10 and 10 years old were not many, combined with less than 40, but they contributed more than 60% of the income. This suggests that the industry is largely propped up by a handful of old stores, rather than growing on new stores.

For the reasons for the expansion of different places, we think that the main focus on three aspects: location difficult, investment difficult, model replication difficult.

Due to the late entry time, the core of the business district has been occupied by local enterprises, foreign enterprises lack of good connections, difficult to get good location or exorbitant rental costs. For example, the canton Bai goods into Chengdu because the site is relatively biased, difficult to converge passenger flow, finally forced to exit from Chengdu.

Acclimatized another dilemma from the difficulty of investment. China's general merchandise industry is the basic use of joint-point model, by the department store operators in apparel, cosmetics, household appliances and other brands in the unified investment. In the Chinese market, almost all the well-known brands are using the agent system, agents are divided into regions, different regions of the agents are completely different. Prior to the arrival of newcomers, brand agents and local enterprises have cooperated for many years to form a close partnership, so the new entrants are difficult to obtain the same treatment as the local department store leader.

In addition, because of the customs, pricing and other ways unfamiliar to consumers, the success of the local business model is difficult to replicate in another place. But in the early expansion of the business seems to have not recognized this problem, the model to copy their own, after the failure to realize this simple truth.