Lianhua Supermarket Holdings is focusing on improving margins and internal management systems in response to growing competition in the Chinese supermarket sector.
Lianhua, China’s largest supermarket operator, saw turnover increase by 14.9% in 2006, rising to CNY16.5bn (US$2.1bn).
With the opening of the Chinese retail market to international players, Lianhua said that competitive pressures intensified throughout the year. The group said that it has focused on increasing its competitiveness by enhancing internal management and improving its supply chain management to reduce operating costs.
Commenting on the growing competition, Liang Wei, Lianhua general manager, said yesterday (18 April) that the retailer had altered its growth strategy.
Liang said: “In light of the fierce competition in the retail market, the group adopted a more prudent development approach to further focus our expansion in the regions that the group has advantages, while maintaining our national development strategy.”
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By GlobalDataAs of 31 December last year, the group had over 3,700 directly operated and franchised outlets, the majority of which were located in Eastern China.
