Fierce e-commerce shopping malls have become fitting rooms. There is a trend of "closing stores and quitting rent" in many parts of China.
Since the beginning of this year, the phenomenon of "closing stores and retiring rents" has appeared in many parts of the country. Following the closure of its Jinan store, the department store giant Parkson closed its Xinbei store in Changzhou, Jiangsu. This is the sixth store that Parkson has closed in the past two years. In Guangdong, Wangfujing, Shin Kong Department Store and Modern Department Store each announced the closure of a poorly-operated store.
The semi-annual report showed that the performance of many A-share listed department stores was red. Among them, the net profit of Nanning Department Store fell by 52.97% year-on-year, the net profit of Hangzhou Jiebai fell by 44% year-on-year, and the net profit of Guangzhou Friendship fell 23% year-on-year. .
Under the impact of the e-commerce tide, department stores are increasingly becoming "fitting rooms". The department store properties and urban complexes that depend on it have also encountered new challenges such as oversupply, difficulty in attracting investment, declining rents, and even rent withdrawal.
Cold shops in many places
Data shows that from the end of April to the end of June, 4 stores of 6 department stores, including Parkson Department Store and Zhongdu Department Store, were closed. This is the first time that such a intensive trend of store closures has been in China's department store industry in the past five years.
In some third- and fourth-tier cities, the phenomenon of vacant and leased-out rents in some lower-end commercial cities is more prominent. Chengdu International Trade City has a construction area of 345 million square meters, an investment of 380 billion yuan, and 6 standard booths. It is currently the largest commercial city in the west under construction.
"Economic Information Daily" reporters saw at the scene that the commercial city was deserted and a large number of stalls were left unused. Except for the opening of some stalls on both sides of the main road on the first floor, few people could be seen elsewhere. Ye Xiaowen, the owner of a clothing store, said that the daily turnover was only a few hundred yuan, and he couldn't make it back.
Wang Junyu, general manager of Xi'an Daniel Trade City, said that when it opened in 2013, the renting rate of more than 2000 shops reached 90%, but for more than a year, even if rent costs are not included, at least 70% of the merchants are losing money, so the phenomenon of rent cancellation More prominent.
In Shanghai, shopping malls in some commercial districts have changed from being difficult to find in the past to becoming a buyer's market. Some newly-operated shopping malls were untimely, and the rental rate of return was significantly lower than in previous years.
A reporter from "Economic Information Daily" visited Yuexing Global Harbor, which has a total construction area of close to 50 square meters. The largest shopping mall in Shanghai, which opened last year, was barely crowded at the prime time of 18:XNUMX. In addition to the popularity of catering and entertainment facilities, shopping shops such as clothing, shoes and hats have almost no passenger flow, and each floor has "empty shops" that have not been rented.
Qi Xiaozhai, director of the Shanghai Commercial Economic Research Center, said that due to the impact of e-commerce and rising costs, the physical department store retail industry is struggling to survive, especially in the pure department store business format. Sales have been declining year after year, the industry's gross profit rate has continued to decline, and the industry has suffered serious losses. In this context, it is inevitable that commercial shops are difficult to hire, rent declines and even surrender leases.
Worries about excess commercial real estate
Half is sea water, half is flame. In stark contrast to the rent reduction or even withdrawal of commercial real estate in many places, there are still many cities that are staking out land, constructing new urban complexes or large shopping malls.
Take Guangzhou as an example. As the commercial real estate in the central city is becoming saturated, Panyu, Baiyun, Luogang and other areas are also constantly building business districts. In the Panyu World Expo Center business district, in addition to the opened Haiyin Festival Walk, Tee Mall Outlets, Aoyuan Plaza, Huilong Xintiandi, there are also Panyu Wanda Plaza, Agile Plaza, Aoyuan Central Plaza, and Teemall. , Four Seas City and other commercial projects.
Industry insiders believe that my country's commercial real estate is currently facing concerns about excesses. In developed countries, the per capita commercial area of 1.2 square meters is considered to be a relatively high level, while the current per capita commercial area in some domestic cities has reached 2 square meters. CB Richard Ellis survey found that of the 10 cities with the most shopping malls in the world last year, China accounted for 9; China's shopping malls under construction accounted for more than half of the world's under construction shopping malls.
The oversupply of commercial real estate leads to vicious competition, which not only increases the vacancy rate, but also exacerbates the losses of the department store retail industry. Qi Xiaozhai said: "The current depression and losses in the department store industry are not entirely caused by the impact of e-commerce, but vicious competition and backward business models are the main reasons." Take the recently closed Changzhou Parkson as an example, there are Lebin and Wanda nearby. In large shopping malls such as Shanghai, Golden Eagle, competition is extremely fierce, business is generally difficult to do, new projects are difficult to profit as expected after the opening.
CB Richard Ellis survey shows that the low growth rate and low profit of the department store industry are becoming more and more unable to support high rents, and the prospect of urban complexes is at risk. In the past three years, sample data from a number of department store companies show that their property rentals and staff expenses have compounded annual growth rates of 14% and 18.5%, respectively, while the average annual compound growth rate of department store operating income during the same period was only 8.8%.
Wu Yiyi, director of CB Richard Ellis Business Services Department, believes that in the short term, oversupply, fierce competition, and the impact of e-commerce will make the operation of large shopping malls difficult. In fact, due to difficulties in renting and operation, Guangzhou Panyu Wanda Plaza and others have delayed the opening time than expected. Some newly opened urban complexes charge rent in the form of sales deductions. If the sales of shops are not satisfactory, they will face a cash flow crisis.