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Economy

Top chains have 'toughest year' in 2015 as sales growth decelerates, margins narrow

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2016-05-04 08:43Global Times Editor: Li Yan

The top 100 chain retail companies in China had their "toughest year" ever in 2015, with slower sales growth and narrower profit margins, said a report released on Tuesday.

Total sales for the largest 100 chain retailers reached 2.1 trillion yuan ($324.24 billion), increasing 4.3 percent from a year earlier, read the report from the China Chain Store & Franchise Association (CCFA).

The growth rate was the lowest in CCFA records, the report said, adding that 31 retailers of the 100 reported declining sales during 2015.

Sales growth for the top 100 has been slowing for several years, falling from 21 percent in 2010 to 5.1 percent in 2014, according to the CCFA.

The average profit margin for the top 100 also narrowed in 2015, declining by 0.1 percentage point from 2014 to 1.8 percent, the CCFA said.

The report said 2015 was "the toughest year for chain retail companies" because of the slowing national economy, rising operating cost and intensifying competition.

The average labor cost for the top 100 retailers rose 4.2 percent, while rents increased 8.6 percent. There was a 16 percent drop in new stores and a 39 percent increase in store closures in 2015, it said.

Amid fierce competition from online vendors, the top 100 retailers have embraced online-to-offline models. In 2015, online sales for the top 100 retailers was up 85 percent from 2014, it added.

  

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