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| Retailers under the cosh. |
Under the impact of the global financial crisis, retailers in the Yangtze River Delta (YRD) region, both big and small, see sales on the decline.
Although total retail sales of consumer goods in Shanghai showed a 20% increase year-on-year in October, the actual retail growth rate was equivalent to the average level last year, after deducting the price rise factor. Sales of up-market and luxury items are markedly affected.
Most shopping centres in Nanjing hit satisfactory sales volume growth between January and August, but the growth rate was on a par with or fell below last year's level after September.
The second half growth rate fell far short of the double-digit target envisaged at the beginning of the year.
In Shanghai, the sales growth for Yaohan Department Store, a unit of the Bailian Group Co Ltd, dropped some 7% in the first half of this year to the present level of 3% to 5%.
Shanghai Pacific Department Store saw a 15% drop in sales revenues in October. Sales revenues of Shanghai No 6 Department Store, Huijin Department Store, Pacific Department Store and Orient Shopping Center fell between10% and 15% on average after 6 October, compared with last year.
As for home electrical appliance sales, consumer interest in buying bulky items is sagging. Business in the fourth quarter has been anything but optimistic.
The phenomenon of consumers dragging their feet is spreading. Although incomes of urban residents are on the rise, the decline in property income and anticipation of an economic downturn are issues obviously affecting consumption.
According to a survey by the Shanghai-based unit of the National Bureau of Statistics, average per capita property incomes in Shanghai dropped 4.8% in the third quarter due to falling property and stock prices as well as other factors.
A sample survey by the Jiangsu unit of the Bureau showed average per capita property incomes of Rmb256 for Jiangsu residents between January and October, a drop of 17.7% year-on-year. This was presented as being due to the slow property market and falling bank savings interest rates.
The situation in Zhejiang was slightly better. According to the Hangzhou Bureau of Statistics, the January to October median per capita property incomes of urban residents in the city was Rmb1,639, up 40.3% year-on-year. Of this, income from share dividends and bonuses and income from rental property increased by 17% and 109% respectively, while income from bank and insurance interest and income from other investments showed declines to varying degrees.
The "bottom line of discounts" is falling and the sales volumes of stores are dropping below the level achieved in previous years. Stores in the entire YRD are exerting greater efforts to promote sales and are offering larger discounts.
from Joan Huang, Shanghai Office
(Image courtesy of Xinhua News Agency) |
