LI & FUNG RESEARCH CENTRE

CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

KPI report for retail chain stores in China

Foreword
About the KPI report
The China Chain Store & Franchise Association and the Li & Fung Research Centre have collaborated and established
the Key Performance Index System (hereafter the “KPI system”) for retail chain operators in China since 2007 and
published reports on a quarterly basis. The system aims to collect key performance indices of different format retail
stores in China.

In 2009, the data collection system are further upgraded and revised, and more store samples have been added. The
revised KPI report covers over 100 retail stores in China of 5 major formats, including convenience stores, supermarkets,
hypermarkets, department stores and home electronics appliance chains, of which supermarkets and hypermarkets are
further divided into several categories by operating area for easier references. We hope this report can shed some light
on the key development trends of China's retail chain stores.

About the indicators

Data of the following is collected in the KPI system –

1. Monthly sales ( 月度銷售額) – Pre-tax monthly sales value

2. Total operating area (總營業面積) – Including self-operating area and leasing area
3. Leasing area (對外租賃面積) – Area leased to other operators
4. Total staff number (員工總數) – Total number of staff including dispatched employees hired by labor agents (勞務派
遣人員)
5. Total number of contract staff (正式員工數) – Total number of staff hired directly by the retailers
6. Total operating cost (成本及費用總額)
7. Total salaries and wages (工資總額)
8. Total number of SKUs (單品總數)
9. Number of SKUs distributing directly through the distribution centre (統一配送單品數)
10. Average daily number of transactions (平均日交易數)
11. Inventory turnover days (庫存周轉天數)
12. Non-operating income (營業外收入) – Income derived from activities other than sales of goods

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Survey results by retail formats

Average
Average sales Average sales per
Monthly sales 2 customer Gross
Format per m staff
(million yuan) 2 spending margin (%)
(yuan/ m /day) (yuan/person/day)
(yuan/visit)
Convenience stores 0.28 91 1,170 13.00 19.26

2
Supermarkets (300-999 m ) 1.28 80 1,658 22.61 14.43

2
Supermarkets (1,000-1,999 m ) 3.77 86 1,463 34.48 14.37

2
Supermarkets (2,000-3,999 m ) 5.96 71 1,561 44.54 13.09

2 8.91 62 1,538 47.03 12.85

Supermarkets (4,000-5,999 m )
2 12.30 53 1,421 60.15 12.91
Hypermarkets (6,000-9,999 m )
2
Hypermarkets (10,000-14,999 m ) 11.65 36 1,198 54.80 12.52
2
Hypermarkets (over 15,000 m ) 24.70 44 1,480 90.36 11.29

Department stores 73.79 81 1,904 456.87 16.54

Home electronics appliance chains 17.93 105 3,390 1,658.43 n.a.

Cashier
efficiency 2 Average
% of Inventory
Cashier efficiency 1 (number of operating area
Format damaged turnover
(yuan/machine/day) transaction/ per employee
goods (Days) 2
machine (m /employee)
/day)

Convenience stores 5,280 402 0.21 9 12.75

2
Supermarkets (300-999 m ) 14,059 586 0.14 22 21.04

2
Supermarkets (1,000-1,999 m ) 15,371 416 0.12 23 17.08

2
Supermarkets (2,000-3,999 m ) 13,416 285 0.17 32 22.00

2
Supermarkets (4,000-5,999 m ) 15,048 305 0.13 28 24.65

2 12,480 166 0.21 31 26.94

Hypermarkets (6,000-9,999 m )

Hypermarkets (10,000-14,999 m )
2 13,426 236 0.26 39 33.62

2
Hypermarkets (over 15,000 m ) 18,888 214 0.24 35 33.88

Department stores 45,211 114 0.11 39 23.55

Home electronics appliance chains 117,066 85 n.a. n.a. 32.33

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

I. Convenience stores
2
Average operating area: 102 m
2
Average number of cash registers: 2 (i.e. 1 cash register for every 51 m )

Monthly sales Average sales per m 2

0.35 120

(yuan/ m2/day)
0.3 100
(million yuan)

0.25 80
0.2 60
0.15 40
0.1
20
0.05
0
0

May
Mar

Apr
Nov

Aug
Dec
Oct 09

Jan 10
Feb

Jun

Jul

Sep
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Average sales per staff Average custom er spending

2,000 20
(yuan/person/day)

1,500 15
(yuan/visit)

1,000 10
500 5
0 0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Gross m argin
Cashier efficiency
(yuan/machine/d

19.6
machine /day)

1000 15,000
transaction/
(number of

19.4
10,000 19.2
ay)

500
5,000 19
(%)

0 0 18.8
18.6
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

18.4
18.2
18
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 0.27 0.27 0.31 0.28 23.1%

2
2. Average sales per m 84 86 101 91 25.9%
2
(yuan/ m /day)
3. Average sales per staff 1,087 1,116 1,307 1,170 18.3%
(yuan/person/day)
4. Average customer spending 12.49 12.53 13.21 13.00 -2.0%
(yuan/visit)
5. Cashier efficiency 1 4,906 5,036 5,899 5,280 -29.4%
(yuan/machine/day)
6. Cashier efficiency 2 390 390 426 402 -41.3%
(number of transaction/ machine /day)

7. Gross margin (%) 19.25 19.39 19.15 19.26 -0.9%

8） % of damaged goods: 0.21%

9） Inventory turnover days: 9 days
10） Average operating area per employee (員工配置): 12.75 m /employee
2

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

II. Supermarkets (divided into 4 groups according to operating area)

1. Supermarkets (300-999 m2)

2
Average operating area: 526 m
2
Average number of cash registers: 3 (i.e. 1 for every 175.3 m )

Monthly sales Average sales per m 2

1.6 120
1.4

(yuan/ m2/day)
100
(million yuan)

1.2
1
80
0.8 60
0.6 40
0.4 20
0.2
0
0

May
Mar
Apr
Nov

Aug
Dec
Oct 09

Jan 10
Feb

Jun
Jul

Sep
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Average sales per staff Average custom er spending

2,500 50
(yuan/person/day)

2,000 40
(yuan/visit)

1,500 30
1,000 20
500 10
0 0
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Aug
Sep

Apr
Aug
Apr

Cashier efficiency Gross m argin

(yuan/machine/d

15.5
machine /day)

800 20,000
transaction/
(number of

600 15,000 15
ay)

400 10,000 14.5

200 5,000
(%)

0 0 14
13.5
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

13
12.5
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 1.21 1.17 1.45 1.28 18.3%

2
2. Average sales per m 77 72 92 80 18.0%
2
(yuan/ m /day)
3. Average sales per staff 1,586 1,485 1,901 1,658 11.8%
(yuan/person/day)
4. Average customer spending 21.40 22.07 24.37 22.61 -32.4%
(yuan/visit)
5. Cashier efficiency 1 13,453 12,598 16,127 14,059 58.0%
(yuan/machine/day)
6. Cashier efficiency 2 597 583 577 586 56.6%
(number of transaction/
machine /day)

7. Gross margin (%) 15.06 14.24 13.98 14.43 4.8%

8） % of damaged goods: 0.14%

9） Inventory turnover days: 22 days
10） Average operating area per employee (員工配置): 21.04 m /employee
2

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

2. Supermarkets (1,000-1,999 m2)

2
Average operating area: 1,435 m
2
Average number of cash registers: 8 (i.e. 1 for every 179.4 m )

Monthly sales Average sales per m 2

5 100
4 80

(yuan/ m2/day)
(million yuan)

3 60
2 40
1 20
0 0
Jul

Jul
Oct 09

Jan 10

Feb

Jun

Oct 09

Jan 10

Feb

Jun
Mar

Mar
Nov
Dec

May

Nov

Dec

May
Sep

Sep
Aug

Aug
Apr

Apr
Average custom er spending
Average sales per staff

60
2,000
(yuan/person/day)

50
1,500
(yuan/visit)

40
1,000 30
500 20
10
0
0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Gross m argin
Cashier efficiency
(yuan/machine/d

16.5
machine /day)

600 20,000
transaction/
(number of

16
400 15,000
15.5
ay)

10,000
200 15
5,000
(%)

0 0 14.5
14
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

13.5
13
12.5
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 3.63 3.66 4.01 3.77 22.3%

2
2. Average sales per m 82 82 93 86 12.7%
2
(yuan/ m /day)
3. Average sales per staff 1,394 1,404 1,590 1,463 -3.3%
(yuan/person/day)
4. Average customer spending 32.71 32.99 37.74 34.48 -23.7%
(yuan/visit)
5. Cashier efficiency 1 14,644 14,758 16,711 15,371 18.9%
(yuan/machine/day)
6. Cashier efficiency 2 417 422 410 416 42.5%
(number of transaction/
machine /day)

7. Gross margin (%) 14.34 14.29 14.49 14.37 -9.3%

8） % of damaged goods: 0.12%

9） Inventory turnover days: 23 days
10） Average operating area per employee (員工配置): 17.08 m /employee
2

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

3. Supermarkets (2,000-3,999 m2)

2
Average operating area: 2,750 m
2
Average number of cash registers: 15 (i.e. 1 for every 183 m )

Monthly sales Average sales per m 2

12 150

(yuan/ m2/day)
10
(million yuan)

8 100
6
4 50
2
0
0

May
Nov

Mar
Apr

Aug
Dec
Oct 09

Jan 10
Feb

Jun
Jul

Sep
Jul
Jan 10

Feb

Jun
Mar
Nov

Dec

May
Oct 09

Sep
Aug
Apr

Average sales per staff Average custom er spending

3,500 80
(yuan/person/day)

70
3,000
60
(yuan/visit)

2,500
2,000 50
40
1,500 30
1,000
20
500
10
0 0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Cashier efficiency Gross m argin

(yuan/machine/d
machine /day)

400 30,000 15
transaction/
(number of

300 14.5
20,000
ay)

200 14
100 10,000 13.5
(%)

0 0 13
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

12.5
12
11.5
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 5.45 5.68 6.75 5.96 3.8%

2
2. Average sales per m 64 67 82 71 2.6%
2
(yuan/ m /day)
3. Average sales per staff 1,409 1,469 1,806 1,561 11.6%
(yuan/person/day)
4. Average customer spending 42.63 41.79 49.19 44.54 -1.6%
(yuan/visit)
5. Cashier efficiency 1 12,105 12,627 15,516 13,416 4.8%
(yuan/machine/day)
6. Cashier efficiency 2 279 288 289 285 14.1%
(number of transaction/
machine /day)

7. Gross margin (%) 13.49 13.03 12.74 13.09 -2.0%

8） % of damaged goods: 0.17%

9） Inventory turnover days: 32 days
10） Average operating area per employee (員工配置): 22 m /employee
2

10

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

4. Supermarkets (4,000-5,999 m2)

2
Average operating area: 4,658 m
2
Average number of cash registers: 19 (i.e: 1 for every 245.2 m )

Monthly sales Average sales per m 2

20 200

(yuan/ m2/day)
150
(million yuan)

15

10 100

5
50
0
0

May
Nov

Mar
Apr

Aug
Dec
Oct 09

Jan 10
Feb

Sep
Jun
Jul
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Average sales per staff Average custom er spending

3,500 100
(yuan/person/day)

3,000 80
(yuan/visit)

2,500
2,000 60
1,500 40
1,000
500 20
0 0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Cashier efficiency Gross m argin

(yuan/machine/d
machine /day)

400 30,000 14
transaction/
(number of

300 20,000 13.5

ay)

200 13
100 10,000
(%)

12.5
0 0
12
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

11.5
11
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

11

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 8.70 7.87 10.15 8.91 -22.4%

2
2. Average sales per m 60 55 73 62 -23.8%
2
(yuan/ m /day)
3. Average sales per staff 1,484 1,343 1,788 1,538 -1.5%
(yuan/person/day)
4. Average customer spending 43.91 43.63 53.54 47.03 -7.0%
(yuan/visit)
5. Cashier efficiency 1 14,514 13,135 17,494 15,048 -11.9%
(yuan/machine/day)
6. Cashier efficiency 2 305 310 300 305 14.7%
(number of transaction/
machine /day)

7. Gross margin (%) 12.80 12.79 12.95 12.85 2.10%

8） % of damaged goods: 0.13%

9） Inventory turnover days: 28 days
10） Average operating area per employee (員工配置): 24.65 m /employee
2

12

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

III. Hypermarkets (divided into 3 groups by operating areas)

1. Hypermarkets (6,000-9,999 m2)

2
Average operating area: 7,624 m
2
Average number of cash registers: 32 (i.e. 1 for every 238.25 m )

Monthly sales Average sales per m 2

25 120

(yuan/ m2/day)
20 100
(million yuan)

80
15
60
10 40
5 20
0
0

May
Mar
Apr
Nov

Aug
Dec
Oct 09

Jan 10
Feb

Jun

Jul

Sep
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Average custom er spending

Average sales per staff

100
3,500
(yuan/person/day)

3,000 80
(yuan/visit)

2,500
2,000 60
1,500 40
1,000
500 20
0
0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Cashier efficiency Gross m argin

(yuan/machine/d

15
machine /day)

200 30,000
transaction/
(number of

150 14.5
20,000 14
ay)

100
50 10,000 13.5
(%)

0 0 13
12.5
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

12
11.5
11
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

13

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 11.42 11.33 14.15 12.30 34.7%

2
2. Average sales per m 48 48 62 53 35.2%
2
(yuan/m /day)
3. Average sales per staff 1,303 1,292 1,668 1,421 36.4%
(yuan/person/day)
4. Average customer spending 58.40 56.66 65.39 60.15 7.5%
(yuan/visit)
5. Cashier efficiency 1 11,445 11,347 14,647 12,480 38.3%
(yuan/machine/day)
6. Cashier efficiency 2 175 162 160 166 3.6%
(number of transaction/
machine /day)

7. Gross margin (%) 12.73 12.91 13.11 12.91 5.7%

8） % of damaged goods: 0.21%

9） Inventory turnover days: 31 days
10） Average operating area per employee (員工配置): 26.94 m /employee
2

14

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

2. Hypermarkets (10,000-14,999 m2)

2
Average operating area: 10,656 m
2
Average number of cash registers: 28 (i.e. 1 for every 380.6 m )

Monthly sales Average sales per m 2

35 80

(yuan/ m2/day)
30
60
(million yuan)

25
20 40
15
10 20
5
0
0

May
Mar

Apr
Nov

Aug
Dec
Oct 09

Jan 10

Feb

Jun

Jul

Sep
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Average custom er spending

Average sales per staff

80
3,000
(yuan/person/day)

70
2,500 60
(yuan/visit)

2,000 50
1,500 40
1,000 30
500 20
0 10
0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Cashier efficiency Gross m argin

(yuan/machine/d

16
machine /day)

400 30,000
transaction/
(number of

300 14
20,000 12
ay)

200
100 10,000 10
(%)

0 0 8
6
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

4
2
0
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

15

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 10.57 11.87 12.53 11.65 -6.6%

2
2. Average sales per m 32 36 39 36 -8.5%
2
(yuan/ m /day)
3. Average sales per staff 1,074 1,206 1,315 1,198 -10.7%
(yuan/person/day)
4. Average customer spending 51.68 52.17 60.55 54.80 0.0%
(yuan/visit)
5. Cashier efficiency 1 12,031 13,513 14,736 13,426 -11.7%
(yuan/machine/day)
6. Cashier efficiency 2 224 243 240 236 -14.6%
(number of transaction/
machine /day)

7. Gross margin (%) 12.07 12.55 12.93 12.52 -11.2%

8） % of damaged goods: 0.26%

9） Inventory turnover days: 39 days
10） Average operating area per employee (員工配置): 33.62 m /employee
2

16

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

3. Hypermarkets (over 15,000 m2)

2
Average operating area: 18,431 m
2
Average number of cash registers: 43 (i.e. 1 for every 428.6 m )

Monthly sales Average sales per m 2

40 80
35

(yuan/ m2/day)
60
(million yuan)

30
25
20 40
15
10
20
5
0
0

May
Mar

Apr
Nov

Aug
Dec
Oct 09

Jan 10

Feb

Jun
Jul

Sep
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Average custom er spending

Average sales per staff

160
2,500
(yuan/person/day)

140
2,000 120
(yuan/visit)

1,500 100
80
1,000 60
500 40
0 20
0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Cashier efficiency Gross m argin

(yuan/machine/d

13
machine /day)

300 40,000
transaction/
(number of

30,000 12.5
200
ay)

20,000 12
100 10,000 11.5
(%)

0 0 11
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

10.5
10
9.5
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

17

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 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 23.22 25.11 25.75 24.70 7.8%

2
2. Average sales per m 41 44 47 44 6.6%
2
(yuan/m /day)
3. Average sales per staff 1,376 1,488 1,577 1,480 -0.4%
(yuan/person/day)
4. Average customer spending 86.69 87.28 97.11 90.36 14.4%
(yuan/visit)
5. Cashier efficiency 1 17,558 18,987 20,119 18,888 18.1%
(yuan/machine/day)
6. Cashier efficiency 2 208 222 211 214 3.30%
(number of transaction/
machine /day)

7. Gross margin (%) 11.39 10.75 11.72 11.29 4.20%

8） % of damaged goods: 0.24%

9） Inventory turnover days: 35 days
10） Average operating area per employee (員工配置): 33.88 m /employee
2

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 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

IV. Department stores

2
Average operating area: 29,838 m
2
Average number of cash registers: 53 (i.e. 1 for every 563 m )

Monthly sales Average sales per m 2

160 200
140

(yuan/ m2/day)
150
(million yuan)

120
100
80 100
60
40
50
20
0
0

May
Mar
Apr
Nov

Aug
Dec
Oct 09

Jan 10
Feb

Jun

Jul

Sep
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Average custom er spending

Average sales per staff

700
3,500
(yuan/person/day)

3,000 600
(yuan/visit)

2,500 500
2,000 400
1,500 300
1,000 200
500 100
0
0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Cashier efficiency Gross m argin

transaction/ machine

19
(yuan/machine/day)

200 120,000
100,000 18
(number of

150
80,000
/day)

100 60,000 17
(%)

40,000 16
50
20,000
0 0 15
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

14
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

19

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 64.76 69.90 86.69 73.79 -3.9%

2
2. Average sales per m 70 76 97 81 -2.6%
2
(yuan/ m /day)
3. Average sales per staff 1,649 1,780 2,281 1,904 18.5%
(yuan/person/day)
4. Average customer spending 397.55 415.62 557.44 456.87 8.1%
(yuan/visit)
5. Cashier efficiency 1 39,171 42,278 54,184 45,211 10.2%
(yuan/machine/day)
6. Cashier efficiency 2 108 110 124 114 0.8%
(number of transaction/
machine /day)

7. Gross margin (%) 16.11 16.90 16.61 16.54 -4.8%

8） % of damaged goods: 0.11%

9） Inventory turnover days: 39 days
10） Average operating area per employee (員工配置): 23.55 m /employee
2

20

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

V. Home electronics appliance chains

2
Average operating area: 5,593 m
2
Average number of cash registers: 5 (i.e. 1 for every 1,118.6 m )

Monthly sales Average sales per m 2

70 250
60
200

(yuan/ m2/day)
50
(million yuan)

40
150
30 100
20
50
10
0
0

May
Mar

Apr
Nov

Aug
Dec
Oct 09

Jan 10
Feb

Jun

Jul

Sep
Jul
Oct 09

Jan 10

Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Average custom er spending

Average sales per staff

2,500
10,000
(yuan/person/day)

8,000 2,000
(yuan/visit)

6,000 1,500
4,000 1,000
2,000 500
0
0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov

Dec

May

Sep
Aug
Apr

Cashier efficiency
(yuan/machine/d
machine /day)

150 200,000
transaction/
(number of

100 150,000
ay)

100,000
50 50,000
0 0
Jul
Oct 09

Jan 10
Feb

Jun
Mar
Nov
Dec

May

Sep
Aug
Apr

Efficiency 2 (number of transaction/ machine /day)

Efficiency 1 (yuan/machine/day)

21

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Jul 10 Aug 10 Sep 10 Average yoy %

1. Monthly sales (million yuan) 19.21 15.34 19.25 17.93 -43.3%

2
2. Average sales per m 111 88 115 105 41.4%
2
(yuan/m /day)
3. Average sales per staff 3,589 2,865 3,716 3,390 -3.9%
(yuan/person/day)
4. Average customer spending 1,582.14 1,539.68 1,853.47 1,658.43 15.7%
(yuan/visit)
5. Cashier efficiency 1 123,939 98,946 128,313 117,066 73.9%
(yuan/machine/day)
6. Cashier efficiency 2 86 76 94 85 60.7%
(number of transaction/
machine /day)

7） % of damaged goods: n.a.

8） Inventory turnover days: n.a.
9） Average operating area per employee (員工配置): 32.33 m /employee
2

22

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

Recent highlights of the retail chain operators

(Brief notes from the speech of Ms Guo Ge-ping, Chairperson of the China Chain Store & Franchise Association during
th
the 12 China Retail Industry Convention)

1. Multi-format operation is common among retailers in China

“
Among the the top 100 retail chain operators” (the Top 100s) by the CCFA, 84 enterprises have embarked on
multi-format operation. Many established retailers in China operate a variety of retail formats such as supermarkets,
department stores, specialty stores and convenience stores etc., to target different consumer segments and to increase
market share. Wal-Mart, China Resources Vanguard, Dalian Dashang ( 大連大商) and Wumart (物美) are some of the
examples operating different retail formats in China.

2. Retailers strive to improve supply chain efficiency

In recent years, improving supply chain efficiency is high on the agenda of retailers in China. For instance, as China’s
logistics infrastructure is underdeveloped, many retailers in China have spent huge resources on building their own
distribution centers to ensure efficient supply of goods, to enhance flexibility of inventory transfer, to reduce cost as well
as to enhance supply of fresh food. By the end of 2009, more than 90 enterprises among the Top 100s have built their
own distribution centers. Suguo ( 蘇果), Jiajiayue (家家悅), Yonghui (永輝) are some of the prominent examples – food
processing is one of the core functions of their distribution centers; retailers can now increase the profit margin through
widening services scope.

On the other hand, growing numbers of retailers now embark on direct-farm sourcing to shorten their agricultural
products supply chain and to improve operating performance. This enables retailers to lower distribution costs as well as
to closely monitor the entire production process. In view of the fact that many farms in China are small in scale, which
results in problems such as unstable supply and quality, some retailers such as Wuhan Zhongbai ( 武漢中百) and City
Shop ( 城市超市) have also started to invest in or build their own farms.
3. Retailers seek to differentiate from competitors with private labels and exclusive
products

The development of private labels is relatively immature in China. Sales of private label products currently account for
only 1-2% of the total sales revenue of retailers; and initiatives to launch private label products are mainly taken by
foreign retailers. Meanwhile, in Europe, recent figures suggest that private label products accounted for more than 30%
of the retail sales revenue of retailers, and the top 3 countries were Switzerland (47%), England (43%) and Germany
23

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

(37%) respectively. Private label products also account for more than 20% of the total sales revenue of retailers in the
United States and 6% in Japan.

In China, many Chinese consumers are unfamiliar with or do not trust private label products. But the picture is slowly
changing. As a possible lucrative profit source and a tool to differentiate from competitors and build customer loyalty,
many domestic retailers are beginning to try launching their own private labels.

On the other hand, some retailers are exploring opportunities in launching licensed brands to differentiate from others,
e.g. Cherokee Inc from the United States has entered into an exclusive license agreement for its Cherokee brand with
China’s largest foreign retailer RT-Mart. The products will be designed by Cherokee and RT-Mart will be responsible for
production and sales.

4. Retailers embark on commercial real estate strategies

Among other costs such as labor and utilities, rental cost has the biggest share, accounting for around 4% of the total
sales revenue of retailers in China; many expect rental rates in China continue to climb, posing pressure on retailers’
profit margin. To better control rental expenditures, some retailers in China have learnt from the experience of foreign
retailers such as Tesco and embarked on respective commercial real estate strategies. Prominent examples include
Tesco and Metro. And we see domestic retailers are growingly interested in investing in commercial real estates as well.
Developing community shopping centers and HOPSCA (hotel, office, park, shopping mall, convention center and
apartment) are particularly popular for retail developers in China.

5. Traditional retailers in China are paying increasing attention to online retailing

Traditional retailers in China are paying increasing attention to online retailing. According to the CCFA, 31 out of the Top
100 retailers in 2009 have launched B2C online retailing initiatives. Examples include the launch of online retailing
portals by Suning ( 蘇寧電器), Wangfujing Department Stores (王府井百貨) and Liqun Group (利群集團).
Indeed, many traditional retailers have an edge over pure-click retailers in areas such as sourcing, logistics and
after-sale services. For instance, Meiyijia ( 美宜佳), a convenience store chain operator in Dongguan, illustrates how
traditional retailers can benefit from operating a brick-and-click model - Meiyija launched its virtual shopping mall
(http://www.myj.com.cn/) and the online platform has enriched the merchandise portfolio of Meiyijia (previously limited
by store space).

24

Li & Fung Research Centre

China Chain Store & Franchise Association Member of the Li & Fung Group
 LI & FUNG RESEARCH CENTRE
CHINA CHAIN STORE & FRANCHISE ASSOCIATION 2010 Q3

About the Organizations

The China Chain Store & Franchise Association

中國連鎖經營協會

Founded in 1997, the China Chain Store & Franchise Association (CCFA) is an official representative of the retailing and
franchise industry in China. Currently, there are 900 enterprise members with 160,000 outlets, including domestic &
overseas retailers, franchisers, suppliers, and relevant organizations. The total sales of China’s “Top 100 retail chain
operators”, which are part of the members of the CCFA, exceeded RMB 1.36 trillion in 2009, with more than 137,000
stores in total.

CCFA participates in policymaking and coordination, safeguards the interests of industry and members, provides a
series of professional trainings and industry information and data for its members and establishes platforms for
exchange and cooperation.

Li & Fung Group

利豐集團

The Li & Fung Group is a Hong Kong-based multinational company with three distinct core businesses: export sourcing,
distribution and logistics, and retailing. Founded in Guangzhou in 1906, the Li & Fung Group achieved an annual
turnover of around US$16.7 billion in 2008. Today, the Li & Fung Group operates in some 40 countries and regions and
employs over 35,000 people worldwide. One of its core competencies is “Supply Chain Management” (SCM).

Li & Fung Research Centre

利豐研究中心

Li & Fung Research Centre is the research institute of the Li & Fung Group. It serves as a knowledge bank on China's
economy, industries, logistics and distribution sector, with its research scope covering the whole spectrum of the entire
supply chain, from ideas, production, distribution, retailing to consumers. It also offers research analyses and consulting
services to colleagues and clients to assist them in their day-to-day decision-making.

© Copyright 2010 Li & Fung Research Centre and the China Chain Store & Franchise Association (CCFA). All rights reserved.
Though Li & Fung Research Centre and CCFA endeavor to have information presented in this document as accurate and updated
as possible, it accepts no responsibility for any error, omission or misrepresentation. Li & Fung Research Centre, CCFA and/or their
associates accept no responsibility for any direct, indirect or consequential loss that may arise from the use of information contained
in this document. Reproduction or redistribution of this material without Li & Fung Research Centre and CCFA’s prior written
consent is prohibited.
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