Carrefour Stays Top in Taiwan' s Hypermarket Industry

Taipei, Jan. 18, 2006 (CENS)--In 2005, Carrefour Taiwan chalked up total revenue of NT$54.1 billion from its 37 outlets, up 2.4% from 2004, retaining its championship in the local hypermarket industry. RT-Mart, the No. 2, however, outshone Carrefour with an 8% revenue growth.

During their rivalry, Carrefour spared no effort in increasing the number of its outlets to boost its overall turnover. RT-Mart, however, focused on boosting its profit margin and the sales volume at its existing outlets. Despite the absence of new outlet, RT-Mart still increased its revenue by NT$2.4 billion last year.

Wei Cheng-yuan, general manager of RT-Mart, reported that the company will not open new outlet this year either and will, instead, place its priority on boosting the profits.

Carrefour is pulling off all stops to enhance its market share, in order to widen its lead over its rivals. This year, it will open a new outlet in the northeastern county of Ilan, the first hypermarket there, and will also extend its reach to western district of Taipei city, the virgin land of hypermarkets, by opening two outlets there, one on Chungching N. Road and the other on Chunghua Road. By the middle of the year, it is scheduled to acquire Tesco, another hypermarket chain, thereby increasing its total outlets to near 50, double that of RT-Mart.

Despite its business decline last year, Geant, the third largest hypermarket, is holding a rosy outlook for its business in 2006, following the satisfactory performance of its Tachih outlet in Taipei, which opened early this year. The two major shareholders, Casino and Far Eastern Group, have expressed their staunch support for the hypermarket' s operation by providing fresh capital last year.

In 2005, Taiwan' s hypermarket industry recorded a slight overall growth. Total revenue of domestic hypermarket outlets in the first 10 months last year inched up 0.4% to NT$118.2 billion, according to the statistics of the Directorate General of Budget, Accounting, and Statistics. Industry insiders believe the overall business climate for the industry this year will be similar to that of last year.

Industry insiders note that hypermarkets have obtained growing acceptance among local consumers, as evidenced by the revenue growth of the existing outlets of Carrefour and RT Mart. With the inflationary pressure mounting, hypermarkets have won the trust of many local consumers with the projection of their low-price image.

Although shares of hypermarkets in the retail market are still low, industry insiders believe hypermarkets will poach growing numbers of consumers from traditional retail channels by opening of new outlets, increasing the return rate of customers, and boosting sales of existing outlets.

In addition to the effort to highlight the low-price image, most hypermarkets, such as Carrefour, RT-Mart, and Geant, will endeavor to develop private labels. Carrefour, for instance, targets to offer the three versions of low price products, private labels, and leading brands for every commodity for consumers to choose from.