The first domestic Wal-Mart hypermarket will close
Wal-Mart (Honghu Store) is located in Luohu District, Shenzhen. It started business in 1996. The entire hypermarket has three floors and an area of nearly 20,000 square meters. Tianyancha App shows that Shenzhen Wal-Mart Department Store Retail Co., Ltd., an affiliate of Honghu Wal-Mart, was established in December 1995 with a registered capital of approximately US$166 million. It is wholly-owned by Wal-Mart (China) Investment Co., Ltd.
Wal-Mart (Honghu Store) Front Entrance Huang Qiong/Photo by
Wu Rui, managing director of Savills Shenzhen, told China Business News that the owner of the property where Wal-Mart (Honghu Store) is located has changed, and the new owner has some plans for the use of the property. In the end, the lease will not be renewed. The result of negotiations between the new owner and the tenant Wal-Mart.
According to the official website of Wal-Mart (China), the business area of Wal-Mart hypermarkets ranges from more than 5,000 to more than 10,000 square meters. The main products are fresh food, clothing, home appliances, dry goods and more than 10,000 products, providing customers with unique ” One-stop shopping” experience. At the same time, as the main store, it attracts customers to neighboring small retailers, restaurants and shops.
At around 7pm on the 23rd, many consumers in the deli area on the first floor of Wal-Mart (Honghu store) were shopping for products, and the most classic roast chicken with a price of more than 20 yuan was sold out. The second and third floors are dominated by household goods, relatively speaking, they are not as lively as the first floor, and some products on the shelves have also been taken off the shelves.
A staff member of the supermarket told CBN reporters, “We won’t have to come back to work until the end of this month. There should be employees from other Wal-Mart stores coming to clear the goods in the next week.”
Although Wal-Mart (Honghu Store) did not post any notices regarding the withdrawal of the store, some other merchants in the business have posted “removal” posters and banners on their walls.
Some shelves of Wal-Mart (Honghu store) have been emptied. Photo by Huang Qiong/
Merchants put up a banner of “withdrawal” Huang Qiong/Photo by Huang Qiong
Wu Rui told CBN reporters that the property where Wal-Mart (Honghu Store) is located is also relatively old, with changes in the surrounding business districts and the flow of people, and it is normal for Wal-Mart to make commercial adjustments on this. At the same time, after the change of ownership of the property, Wal-Mart and the new owner no longer matched the direction of use of the property, so the lease was not renewed.
The Tianyancha APP shows that Shenzhen Wal-Mart Department Store Retail Co., Ltd. currently has nearly 90 branches, of which more than ten branches have been cancelled. Since 2021, many Wal-Mart stores in Fujian, Shaanxi, Hebei and other places have also cancelled one after another.
According to incomplete statistics, from 2016 to 2020, Walmart China closed about 80 stores. As of September 2021, the number of Wal-Mart hypermarkets in the Chinese market has fallen from 403 at the beginning of the year to 378. The Fujian Nan’an Wal-Mart also announced that it will cease operations on November 26. Up to now, plus the Shenzhen Honghu store, Wal-Mart China has confirmed the closure of 27 hypermarkets in 2021.
Regarding the “closed store” situation, the relevant staff of Wal-Mart (China) told CBN reporters that we regularly review the performance of our stores to ensure that we continue to optimize our business. Opening or closing stores is a normal measure for the daily operations of the retail industry. Walmart China will open more Walmart stores, Sam’s Club stores and Yuncang to provide customers and members with more seamless online and offline omni-channel services.
In recent years, in addition to Wal-Mart hypermarkets, Carrefour, Shenzhen veteran supermarket Renrenle and other entities, cheap supermarkets, there have also been cases where old stores closed and new stores opened.
Analysys Li Yingtao, a senior analyst in the new consumer industry, told a reporter from China Business News that the situation of low-price supermarket closures has actually continued in recent years. One is the impact of online shopping, and the other is the traditional offline supermarkets New business formats, transformation and upgrading are not effective. In fact, food delivery, community group buying, live delivery, and traditional e-commerce platforms have the greatest impact on cheap supermarkets. After the emergence of these new formats, the price advantage of traditional low-price supermarkets is no longer obvious, and consumers’ demand for offline shopping experience is escalating, and traditional supermarkets have difficulty keeping up with shopping experience and transportation convenience.
Wu Rui also believes that the rise of the Internet and new retail business models has also brought certain challenges to traditional supermarkets, and many businesses will adjust themselves. In fact, it can also be seen that many large supermarkets, including Wal-Mart supermarkets, are gradually developing online businesses, combining online and offline businesses.