(Yicai Global) Oct. 14 -- RT-Mart has never closed a store since it entered the mainland Chinese market 19 years ago, whether during the financial storms or during the recent wave of retail outlet closures. However, that tradition was broken two days ago with the closure of its Weifang-based Weiyi Plaza mall.
The mall is closing not because the lease will expire but due to the fact the landlord has encountered financial problems. Local shoppers say business has been pretty good at the Weiyi Plaza store and they all like shopping there, RT-Mart said.
Given its long-time good performance, RT-Mart has always been successful in getting the stores it likes. It usually keeps operating the stores by relying on its good supply chain relationships and industrialized management and does not easily shut them down to stop losses, the company told Yicai Global.
Due to high investment and low profit in the retail industry, most hypermarkets and supermarkets operate by leasing the business premises. Under the leasing model, once the lease expires or the landlord encounters disputes, retailers are forced to close their stores.
RT-Mart overtook Carrefour as the retail champion in 2010 with revenue of CNY40.4 billion, according to public data, however this figure pales against Mr. Jack Ma's Alibaba Group Holding Ltd. with gross merchandise volume in excess of CNY3 trillion (USD465 billion) in the first quarter of this year.