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May 7, 2009

CHINA: Spar boss outlines China assault

Spar International, the Netherlands-based retailer, plans to treble the number of its stores in China “in the next few years”, the company's managing director said today.

Spar International, the Netherlands-based retailer, plans to treble the number of its stores in China “in the next few years”, the company’s managing director said today (7 May).

Dr Gordon Campbell told the World Retail Congress in Barcelona that the building of distribution hubs in key Chinese provinces would help Spar grow to become one of the “leading retailers” in the country.

“This is a hugely important development for Spar,” Dr Campbell told delegates. “This will enable us to grow almost geometrically in the years ahead.”

Spar is planning to build distribution hubs in provinces including Shandong and Guandong and hopes the moves will enable more stores to be opened in more cities in each province.

He added: “This may sound like a strange vision but our vision is that we will operate this in many provinces in China, with one main partner and many minor partners – some with even single stores and some with multiple stores. Then we will become among the largest retailers – if not the largest – retailer in China.”

Spar, which teams up with local, independent retailers in each of its overseas markets, is looking to increase its store network in China from the current 88 outlets.

Dr Campbell said Spar, which first entered China in 2004, had been accused of entering the market too late and behind the likes of Carrefour and Wal-Mart. He argued, however, that the notion that the world’s retail giants had “captured” the Chinese market is “nonsense”.

“The role of the large, international retailers in China is not that significant at this point. Market shares are very low,” Dr Campbell said, pointing to the strength of domestic retailers like Beijing-based Wumart. Spar’s “geo-political” strategy of targeting China’s “second-tier cities” in the centre of the country and away from its east coast is paying off, Dr Campbell insisted.

“There are tremendous business opportunities there and our system will enable us to go inland and into western China, which we wish to do,” he added.

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