Hsu Chung-jen (徐重仁), who oversaw the rise of 7-Eleven convenience stores in Taiwan, is likely to change the nation’s retail landscape in his new role as president of Pxmart Co (全聯實業), the country’s largest supermarket chain, according to industry insiders.
At a Jan. 6 press conference introducing him as Pxmart’s new president, Hsu said he intended to lead a “second retail revolution” in Taiwan and turn Pxmart into a world-class supermarket that will have 1,000 stores by 2017 and annual sales of more than NT$200 billion (US$6.64 billion) by 2020.
Pxmart had sales of NT$70 billion last year and has 700 stores nationwide.
The company’s addition of new stores will not only affect convenience chainstores, but also put pressure on big-box retailers such as Carrefour Taiwan (家樂福) and RT-Mart International Ltd (大潤發), said Tim Chuang (莊金龍), chief executive officer of local hypermarket operator Far Eastern A-Mart Co (遠東愛買).
Chuang said Pxmart’s expansion over the past few years has already had an impact on two other major supermarket chains — Wellcome Taiwan Co (惠康) and Matsusei Taiwan (松青).
Carrefour Taiwan’s public relations manager Margery Ho (何默真) would not say if Hsu’s return to the retail world would affect the company’s business.
However, she said it would be worth watching to see how Hsu will stabilize Pxmart’s profitability in the discount market in which it operates and the new face Pxmart is to bring to the community grocery market currently shared with supermarkets and convenience stores.
Ho said Carrefour, which has annual sales of NT$60 billion from 62 hypermarkets and seven convenience stores, has expansion plans of its own. It will invest NT$10 billion in new stores by 2016, with 10 planned to open this year, she said.
The public relations office of RT-Mart, another major hypermarket, said the company did not expect to be affected by Hsu’s appointment because of the big difference between hypermarkets and Pxmart in their price points and clientele.
However, it said that Hsu’s arrival at Pxmart could affect convenience stores because with his background he is likely to introduce some of the strategies they use, such as getting new products into stores quickly.
Hsu’s past accomplishments as head of President Chain Store Corp (統一超商), which operates the 7-Eleven chain as well as other retail brands such as Starbucks and Cold Stone Creamery, have earned him the title of Taiwan’s “godfather of retailing.”
Under Hsu’s leadership, Pxmart prepared 70,000 lucky bags for sale at NT$100 over the Lunar New Year holiday, with prizes including a Toyota RAV4 sport-utility vehicle worth about NT$1 million, gift vouchers, cash and massage chairs.