Mixed retailers continued its decline in 2016, with the main channel, department stores, contributing to the overall decrease in terms of both outlets and value sales, whilst variety stores and warehouse clubs showed strong growth. Massive closures and layoffs were the result of the downturn in department stores. Competitive pressure from e-commerce, high operating costs, combined with the weak economic backdrop, contributed to the poor performance of the channel, with a current value decline of 1% in 2016.
Dashang Group led mixed retailers in value terms in 2016 against a weak economic backdrop, owing to its acquisition activities, outlet expansion and digital strategies. The acquisition of Shenyang Zhongxin Commercial Building Group, Shandong Weihai Department Store Group and Xinjiang Youhao Group in 2015 strongly expanded its reach in department stores. In addition, the launch of its own online shopping platform, TDog, also greatly helped to boost its in-store sales.
Mixed retailers is expected to witness a negative value CAGR of 2% at constant 2016 prices over the forecast period, which is worse than the performance seen in the review period. This is mainly due to rising rental costs and labour costs, the pressure coming from investment in store upgrades, consumers’ changing shopping habits, as well as decelerating economic growth. Compared with internet retailers, the greatest advantage of mixed retailers is the in-store shopping experience. Therefore, mixed retailers could fully employ this edge to stimulate sales. For instance, Su Zhou Shin Kong Place is distinguished by its innovative architectural design, attractive window display design and various art exhibitions. In addition, Su Zhou Shin Kong Place has increased its entertainment and foodservice areas, offering various delicacies from all around the world; therefore greatly enhancing the shopping experience.
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