Fri, May 11, 2007 - Page 12 News List

Wellcome bets on `Express Fresh' model

By Jackie Lin  /  STAFF REPORTER

Wellcome Taiwan Co (惠康百貨), which runs Wellcome supermarkets (頂好超市) and the high-end brand Jason's Market Place, is testing a new store format to combat fierce competition and changing consumer patterns.

With most of its Wellcome stores categorized as standard, or medium-sized, stores, the firm is developing a smaller design, called "Express Fresh," requiring only around 80 ping (264m2).

While each standard store requires around 2,000 households to support its business, the new "convenient value supermarket," as the firm describes it, only requires 800 to 1,200 households.

"The innovation is necessary as hypermarkets and convenience stores continue with their aggressive expansion, squeezing the supermarket sector's survival space," chief executive officer Howard Tsai (蔡裕人) said on the sidelines of a press conference yesterday held to celebrate the Hong Kong company's 20th anniversary in Taiwan.

"The public's consumption patterns have also changed as the birth rate has dramatically dropped and small families become the mainstream," he said.

Aimed at providing consumers with convenient locations to purchase fresh foodstuffs and daily necessities, Wellcome Taiwan started brewing the Express Fresh concept in September last year and the first outlet was opened in Sindian (新店) in Taipei County in April.

It is expected to open the 7th store of this kind today, bringing its total number of stores to 188 nationwide, including 179 Wellcome stores, five Jason's Market Place stores and four Wellcome Gourmet stores.

Tsai said the new format has proved a cost-effective model that performs well, especially as acquiring larger locales gets increasingly difficult.

The Express Fresh model on average generates sales of between NT$4.5 million (US$135,200) and NT$5 million a month, compared with NT$7 million seen in standard stores, he said.

But the cost, including rent, personnel and hardware, is only half that of mid-sized outlets, he said.

By the end of the year, the firm hopes to add another 40 to 50 stores of the Express Fresh model, although it may also expand standard-sized supermarkets.

Wellcome Taiwan, founded in 1987 by Hong Kong's Dairy Farm Co (牛奶公司), posted sales of NT$14 billion last year when it ran 168 supermarkets.

When the retail market was affected by the consumer credit abuse storm last year, Wellcome Taiwan saw the performance of its stores dwindle as shopper traffic slowed.

Ministry of Economic Affairs statistics showed the supermarket sector

recorded revenues of NT$88.5 billion last year, up by 1.93 percent from the

previous year.

The sector is headed by Pxmart (全聯社), the nation's biggest “hard

discounter” better known as Chuan Lian Center (全聯福利中心), with over 300

stores.

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