Due to the effect of the overall environment, Taiwan's domestic demand doesn't increase, intensifying the competition in the retail market. According to the statistics of the Ministry of Economic Affairs, in the first 11 months of 2005 total revenue of the domestic hypermarkets amounted to NT$128.1 billion, down 0.06% year-on-year, the only retail sector with sales decline, indicating that the hypermarket industry in Taiwan has bumped into the bottleneck of saturation, making it difficult for the industry to grow further.

In 2005, after five years of operation, Tesco of the U.K. decided to withdraw from the Taiwanese market and yielded its Taiwan business to Carrefour, which transferred its operations in Czech and Slovakia to Tesco in exchange. Tesco is the second foreign-invested hypermarket to quit the island market, following Makro, indicating that the domestic hypermarket industry has entered the stage of consolidation.

Therefore, in 2005 Taiwan's hypermarket industry entered a situation of triumvirate. Carrefour, the market leader, expanded the number of its outlets to 37 and racked up revenue of NT$54 billion. RT Mart maintained the number of its outlets at 23, with revenue reaching NT$42 billion. The 14 outlets of Geant raked in revnue of NT$15 billion, while Costco, which adopts a membership system, chalked up NT$12 billion of revenue from its four outlets.

Under the acute competition, promotional costs increased and profits dropped, leading to continuous decline in the net profits of hypermarkets. In order to attract customers, in 2005 major hypermarkets, Carrefour, RT Mart, and Geant, all emphasized gross profits and adhered to long-term low-price strategy. In order to boost their margins, hypermarkets continuously boosted the shares of private-label products and own-sales areas, underscoring the trend of own brands and differentiation in channel management.

Carrefour continued to add new outlets in order to boost its market share, but other hypermarkets became conservative in expanding their outlets. In 2005, RT Mart didn't open new outlets and focused its attention on upgrading the operation of its existing outlets. It's expected to maintain the same policy in 2006. In early 2006, Geant inaugurated its new outlet in Tachih of Taipei city, its first new outlet in two years.

In order to compete with convenience stores, department stores, and other retailers, hypermarkets began to actively promote membership cards. In order to solicit consumers, they targeted their DM (direct mails) and marketing at specific customer groups and offered the service of zero-interest card consumption.