French hypermarket chain Carrefour is expanding into the crowded but money-making Neihu district of Taipei with its 35th outlet formally being inaugurated today, a move which analysts said will further stimulate retail revenues in this area.
"This [Neihu store] will be our biggest outlet in Taiwan with a size of 10,000 ping [33,000m2] to combine the hypermarket area with 70 designer brand stores and famous restaurants," Lillian Lee (
To compete head-to-head with close rival RT-Mart (大潤發), Carrefour offers nearly 1,200 parking spaces and aims to outperform RT-Mart's single-store annual sales of between NT$3 billion and NT$4 billion, according to Lee.
Neihu has become a distinctive and complete retailer-concentrated zone with RT-Mart, Costco, Tsann Kuen (燦坤), B&Q and furniture outlets together creating a market amounting to NT$20 billion (US$625 million) a year.
Costco's Neihu outlet reported sales of NT$4 billion last year, snatching the championship prize in the nation's 80-strong hypermarket sector. RT-Mart's two stores in the district contributed to a total revenue of NT$7 billion in the same period.
But Carrefour's joining in the competitive battlefield is not expected to create a crowding-out effect, said Mavis Chu (朱秀芬), a manager of international real-estate agency CB Richard Ellis Ltd.
Instead, the higher concentration of hypermarkets will further boost the area's retail performance, as other players will be stimulated to adjust their product mix, improve services and plan store refits to secure their customer base, she said.
"This district can be accessed easily from the downtown and northern parts of Taipei through the many expressways, making it a convenient mega-shopping venue on weekends as well as weekdays," Chu said.
In the face of the looming competition, RT-Mart has invested NT$50 million to refit its two stores in Neihu by expanding food courts and introducing new services, including a 7-Eleven store and a post office, to complement its existing services.
"We're optimistic about Carrefour's moving into Neihu as their different appeal and features can help lure more consumers into the area," said Margery Ho (何默真), RT-Mart's public relations official.
RT-Mart reported a two-digit growth in sales in the first half of the year, she said, but declined to offer the exact figure.
Smaller rivals Far Eastern Geant (愛買吉安) and Tesco have also renovated
their stores near Neihu.
By the year-end, Carrefour and Far Eastern Geant will again engage in close
combat by opening stores in the nearby Dazhi district, which houses the
world's second-largest rooftop Ferris wheel on top of the Miramar
Entertainment Park (美麗華百樂園).
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