?> Grocery war in China: foreign retailers fall behind - Retail in Asia

Retail in Asia

In Markets

Grocery war in China: foreign retailers fall behind

Local retailers are setting the pace in the Chinese grocery retailing market, according to market researcher Kantar Worldpanel.

Chinese retailers as a group continued their advance in modern grocery trade, growing from 71.9 percent to 72.3 percent collectively year on year, the market watcher said on Thursday.

Sun-art Group, the largest grocery retailing group in the country, continued its lead in the first quarter of 2013, reporting 8.3 percent share of total modern grocery trade, 1.5 points over its nearest rival Walmart group. RT-Mart, which registered a record share of 6.9 percent for a single banner in the latest 3 months, was the key driving force in the group. The growth was particularly strong in key cities and provincial capitals as well as counties, while the performance in prefecture level cities and county level cities was stable.

With a total of 219 stores in 2012 and approximately 70 percent of the stores located in prefecture level cities and below, RT-Mart managed to grow its store number and its sales at the same time.Kantar Worldpanel data suggested that in the latest 12 months, the average RT-Mart shopper spent CNY1,087 (USD176) on Fast Moving Consumer Goods (FMCG) products in the store, a staggering 28 percent higher than that of the average Walmart shopper.

Yonghui was a star performer, rapidly catching up with Tesco, with a value share of 2 percent in the latest 12 months. Yet Yonghui failed to grow further in the past few quarters. Despite its continued expansion in the north region, Yonghui didn’t maintain its position in the south, its home region, where it faces growing competition from RT-Mart and Tesco.

With its rapid geographic expansion, Yonghui reached 4.6 percent families in urban China in the first quarter of 2013, while last year they only served 3.9 percent families. Yet the retailer also reported 5.5 percent growth in spend per family in the latest quarter compared to last year, suggesting that retailer’s ability to attract consumer spending wasn’t diluted by the expansion of its customer base.