By Jerri Lily
Standing on the streets of Carrefour stores in France, did not feel that the first large French retail business What are the advantages.
Is there a store to see the core competitiveness of the brand is not gullible or chain size, but by the store’s commodity prices, personnel structure, goods and other settings. From asset scale, Carrefour did more than Auchan, Carrefour store goods, but not cheap, such as certain fruit prices higher than competitors, 30% to 40%. High parity line walk the store for the industry is very fatal.
In addition to high prices, Carrefour store staffing is also different. According to incomplete statistics, journalists, typically a store of about 500 staff members, accounting for 20% of the promoters to 30%, while in Carrefour, the ratio is as high as 50%.
These two seemingly irrelevant details reflects the characteristics of Carrefour’s profits – mainly depends on channel fees and cost savings.
Reflect the number of suppliers, many of Carrefour markets in the world to take “charge is king” strategy, although most of the stores also have some slotting allowance, but Carrefour is the largest events and the highest price tag. Carrefour has served as the management staff revealed that, from the profit structure, a single store Carrefour has a considerable proportion of income from fees.
According to some suppliers said the charges in this mode, Carrefour, Wal-Mart-style does not use purchase cheap, low-cost marketing strategies, but do not suppress the purchase price, only for high fees. “Raise a few points of each charge, our gross profit to sag, after all, small businesses, which can withstand high charges? Do not pay will be facing the risk of dismantling the store exit, and can only raise its offer, but Carrefour long as the charges can be, they will improve and as we increase the price quoted. so we know yourself that some of the prices of goods not low in Carrefour, but they use part of the low purchase price of goods at high prices overshadowed strong sales of goods sense the difference. “supplier of a snack food frankly.
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Second, many stores Carrefour staff structure is also more rare in the industry, that heavy use of promoters. “Because the promoters of the salary paid by the supplier, and independent stores. But they need help to move cargo, cargo handling, like stores to use the zero-cost labor, so 50% of Carrefour with a high proportion of promoters in order to save costs.” Carrefour was the manager of a store’s one industry sources.
Highly dependent on the fees and the profitability of savings in staff cost way to make Carrefour into a vicious circle, that is, its only to the relatively immature market, Japan, Europe, some countries and regions are all suppliers and labor costs higher strength the market is not only difficult to from suppliers to obtain high slotting allowance, but also not low expenditure of manpower and other costs.
Japan’s retail market still has a feature that is very long and stable supply chain. Is simply a goods to enter the store, you must go through several middleman, these suppliers may operate for decades are like this, who was not allowed to jump, there is no direct supply vendor to speak of. Since each broker are required to increase profits and can not be replaced, thus creating a Carrefour in Japan, there is no advantage at all prices and fees.
So many developed Carrefour retail market in the world are difficult to maintain its fee-based earnings, coupled with less than a certain extent on the scale of the high cost, large shareholders will naturally be more inclined to do this type of stop loss or sell off stores to Operation .
Mode pain
If you say shut shops in Belgium, the withdrawal of Russia, Japan and others are stop-loss behavior, then known as South-East Asia profitable sale of dozens of stores has been valued at some seemingly incomprehensible.
Many people think that this is the major shareholder of Carrefour, after frequent replacement due to capital operation, this may be one thing, but the fundamental mode is a major hidden Carrefour – Basic does not hold property, full range of leasing. In addition to the many rental stores Carrefour renewal after the expiry of the problem exists, there are hidden cost model.
A store’s operating costs can be tens of millions of dollars, I remember a few years ago, we RT-Mart and Carrefour, and compete for a second-tier cities of the property, the last significant advantage of RT-Mart to victory, become the final winner. The reason is simple, RT is the most willing to throwing money at the.
Carrefour is totally typical of the financial figures of foreign retail companies, start-up costs are too high and therefore unacceptable to Carrefour, Carrefour will therefore be more inclined to lease, buy property because of the high initial cost, initial cost of the rental model will be cheaper However, the long term, the rent increase is huge, only you can really cost to hold property and do property preservation and appreciation.
The annual rent increase is that people can not imagine, for example basement rental price per square meter per day from a few years ago, rose to 2.6 yuan to 0.6 yuan, or more than 400%. However, commodity-based hypermarkets operating profit is not high, commodity prices rose much less the rent increase is far greater. Therefore, from the long term, the purchase of the property in fact, cost-effective than leasing, and a more stable and value-added.
The reason I think that Europe is still the core of global competitiveness is better than Carrefour, another important reason is that shop model, the store to buy the property business for some time despite the number of stores may be behind the opponent, but plenty of room for long-term value-added . Auchan, Metro and the same industry tend to buy a property, such as the Metro in China, almost all of their property holding.
Currently more than 100 Carrefour stores in China are basically leasing model, its overseas markets were mostly taken in the rental model, with rents rising, long-term earnings pressure to Carrefour.
The industry believes that in the Chinese market, as Carrefour also has no small scale, so it can be diluted to balance other costs, but not too large in scale in Southeast Asia or other overseas markets, it is difficult to resolve the long-term problem in this way. Therefore, even if a loss is still not present, but the rents rose too high for some time in the future will significantly affect the profit, once the largest shareholder of Carrefour in the region find long-term “additional investment” too high, then select “Enough is enough” development, such as stores leave off, or sale of stores to return the funds.
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