Tue, Feb 04, 2014 - Page 6 News List

Retailers post continued sales increases: ministry

HAPPY SHOPPERS:Data showed that department stores led the nation’s retail sales last year, followed by convenience stores, hypermarkets and supermarkets

By Kevin Chen  /  Staff reporter

Taiwanese retailers continued posting sales increases last year, with total sales exceeding NT$1 trillion (US$32.92 billion) for a second straight year, according to government data released on Wednesday last week.

Retail sales of general merchandise — including those sold at department stores, supermarkets, hypermarkets and convenience stores — is a closely watched gauge of household consumer confidence.

While analysts have cautioned that retail sales data may not be a good indicator of private consumption in GDP as big-budget items such as cars do not enter the retail sales data, slowing growth in total retail sales suggests that private consumption had been losing steam over the course of last year.

According to recent government data, retail sales increased slightly across all businesses last year. However, the businesses’ combined sales grew only by 2.91 percent over the entire year to NT$1.06 trillion, which is slower than the 5.05 percent growth registered in 2012, when total sales reached NT$1.028 trillion, the Ministry of Economic Affairs said in a statement on its Web site.

The data reflect a disappointing consumer purchase amid a sluggish economy.

Under the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) preliminary estimate released on Tuesday last week, GDP expanded by 2.19 percent last year, with private consumption edging up just 1.77 percent from the previous year.

The ministry’s tallies show that department stores led the nation’s retail sales last year at NT$288.6 billion, accounting for 27.3 percent of the total, followed by convenience stores’ 26.1 percent, hypermarkets’ 16.3 percent and 15 percent for supermarkets.

Operators of department stores saw their sales grow 3.1 percent year-on-year last year, decelerating from the 3.6 percent increase in 2012 and 7.6 percent growth in 2011.

“Department stores had reported less than 4 percent sales growth in the last two years because of the impact of online shopping and the increase in virtual stores,” the ministry said in a statement.

Operators of supermarket chains, including Pxmart Co (全聯), Wellcome Taiwan Co (惠康), Simple Mart (美廉社) and Matsusei Taiwan (松青), last year saw their combined sales rise 4.5 percent to NT$158.4 billion from 2012, as they were developing new store formats and adopting community-focused approaches.

However, hypermarket chains including Carrefour Taiwan (家樂福), RT-Mart International Ltd (大潤發) and Far Eastern A-Mart Co (遠東愛買) increased their sales by 0.5 percent year-on-year to NT$172.2 billion last year, affected by competition from supermarkets as well as Taiwan’s demographic changes in terms of an increase in small families with fewer people per household, the ministry said.

As for major convenience store chains such as President Chain Store Corp (統一), Taiwan FamilyMart Co (全家) and Hi-Life International Co (萊爾富), total sales grew by an annual rate of 3.1 percent last year to NT$276.1 billion, helped by the adoption of large store formats and the offering of more value-added services like online shopping and transportation ticket sales, the ministry said.

However, the 3.1 percent rise lagged behind the 8.8 percent increase in 2012 and the 6.7 percent expansion in 2011 given the saturation of the convenience store market, wherein operators have become less aggressive about outlet expansion, but paid more attention to same-store sales and gross margin improvements, according to the ministry’s data.

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