Sun Art Retail Group, the Chinese retailer, saw its profits climb more than 15% in 2013 as new stores boosted sales and the company’s buying negotiations helped margins.
Net profit was up 15.2% at CNY2.78bn (US$452.3m), the local venture of French retail giant Auchan said. Profit from operations increasing 17.9% to CNY4.15bn.
The retailer, which at the end of the year had 323 hypermarkets across China, posted a 10.7% rise in turnover to CNY86.2bn. Same-store sales were up 2%.
Sun Art said its gross profit margins rose thanks to “improvements in product mix and further purchasing common negotiations”. The hypermarket operator, which runs stores under the Auchan and RT-Mart banners, “negotiated together 40% of the group’s buying turnover in 2013”.
The retailer opened 50 stores last year. It also set up an e-commerce arm last year and a website, www.feiniu.com, opened in January.
Citing data from Euromonitor, Sun Art said its share of the market increased 0.5 percentage points to 14%.
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CEO Bruno Mercier said: “We will continue to maintain steady new store expansion by leveraging the opportunities arising from accelerating urbanisation and prudently selecting the location of new stores to ensure their quality.
Focused on the consumer needs, we will improve our product mix, develop aggressively our own brand products, increase the proportion of direct procurement, and impose strict product quality and safety controls in particular on all food products.”
He added: “We will continue to improve and develop our e-commerce business, enhance our customers shopping experience and explore new shopping channels.”