Pxmart (全聯社), the nation's biggest "hard discounter" better known as Chuan Lian center (全聯福利中心), has mapped out an aggressive expansion plan to challenge supermarkets, with some hypermarkets also likely to feel the pinch.
The hard discount chain, aiming to open up to 320 stores nationwide by the end of the year to achieve annual sales of NT$30 billion (US$903.6 million), is putting its new business model of including fresh foodstuffs among the product mix to the test.
It currently offers fresh food products in more than 20 outlets, including the five Sunmade supermarkets (
"To better serve consumers, we think it's important to offer a complete product mix," he said.
Fresh food is a powerful tool to boost customer traffic. The chain has seen fresh food contributing to around 15 percent of revenues in the 20-strong stores, with one on Taipei's Nanjing E. Road even reporting 30 percent of fresh food sales, chairman Lin Ming-hsiung (林敏雄) said.
"That store has an advantage of being located in an area with a high population of office workers and no traditional markets nearby," Lin explained.
This would become the principle on which the firm bases decisions regarding which stores it will introduce fresh food to. Its initial plan will be to stock fresh produce in downtown stores where busy white-collar workers may find it convenient to shop.
Taking a different approach from hypermarkets where the maxim is "the bigger the better," most Pxmart outlets are between 150 ping (495m2) and 200 ping and situated in inconspicuous areas, especially in second-tier counties and townships, because "we couldn't afford to extra expenditures like high rents and we want to offer the best prices to consumers," Tsai said.
Its major focus now is to extend its tentacles into urban areas and islets like Kinmen, with a mid-term goal of opening 500 stores by 2010, which Tsai said might be achieved ahead of schedule.
Many attribute Pxmart's fast expansion to its successful policy of offering hypermarket-level prices on a supermarket-like scale.
Pxmart was formerly a low-priced grocery chain the government had set up for military personnel, government officials and teachers to buy daily necessities, and special cards were required for entry.
In late 1998, it was taken over by Yuan Li Construction Co (
The firm's boss, Lin Ming-hsiung, also chairman of Hwatai Bank (華泰銀行), decided to maintain the retailer's status as a discounter that serves as "the community's good neighbor," manifested on its proximity to local neighborhoods and bare-bones interiors and store signs.
Compared with rivals which have been busy cooperating with credit card issuers, Pxmart bucks the trend and only accepts cash.
Tsai said banks usually charge handling fees of between 3 percent and 5 percent for card transactions. One time, Pxmart's information section came back with exciting news, saying that some banks agreed to slash down the handling fee to only 1.8 percent.
Their sense of achievement was quickly deflated when Lin simply waved his hand, saying, "That's not a good idea. We'd just hand over every penny we earn to the banks."
This shows how minimal the gross margin is, said Richard Yang (楊瑞昌), special assistant to the chairman, adding that their products are on average 10 to 15 percent cheaper than those at hypermarkets.
Its growth has attracted rivals' attention. In August, the nation's largest hypermarket chain Carrefour for the first time claimed that it will challenge Pxmart after it has 80 mega-sized stores in operation by 2010.
Carrefour spokesman Allan Tien (田中玉) said that by that time, the retail giant will start opening smaller stores right next to Pxmart's for cut-throat rivalry.
Faced with Carrefour's confrontation, Lin said they are not afraid of competition as each retailer has its own prowess.
"We provide the lowest prices anytime, quality products and convenience. Taiwan's hypermarkets and supermarkets all have foreign capital behind them. People should support rarities like us, a 100-percent Taiwanese company," Lin said.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS