Wumart delivered a strong sales performance in the first half: total sales rose 11.9% to CNY 11.7bn (USD 1.9bn), though tougher profit performance, with net profit decreasing 19.5% to CNY 247m (USD 40m).
Sales surge from store expansion but lower profit due to promotion investment
Wumart saw a surge in same-store-sales, up 4.2%, as fresh and low price strategies introduced in May 2014 delivered positive results. The retailer continues to expand its store network, with net additions of 12 supermarkets, and 9 convenience stores, geographically focused in Beijing, Tianjin, Hebei and Zhejiang. Both expansion and low pricing strategies will remain key priorities in the months ahead.
Price reductions cut into Wumart’s gross profit margin: at 19.4% this was -0.9 percentage points lower than the previous year. Alongside rising rental and labour costs, this contributed to declining profit.
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