In fact, Chairman Kao Ching-yuan (高清愿) of Uni-President Enterprises said that President should invest in businesses that will change the lifestyle or the way people live in Taiwan. The introduction of convenience chain stores to Taiwan by President some 20 years ago has greatly changed people's lives here. And it is the same reason that we hope the new delivery services will change people's habits regarding giving gifts and purchasing goods. After several months of operation, we saw stable growth in the delivery-services business with the fleet of trucks expanding from 73 to 500.
TT: Experts say companies' weaknesses are exposed and they are more prone to mistakes during a slowdown. What are your thoughts?
Hsieh: It's easy to tell what shape a company is in when the economy slides. Customers can also easily distinguish which companies have better service. Most people think that President Chain Store is making money through investments in individual [convenience chain] stores when in fact we are profiting from our management know-how.
However, companies in Taiwan like to chase trends. They tend to rush to offer products or services that imitate the competition, with the result being that companies have no real competitive advantage. These companies don't survive for long because they are focused on quick money-making and don't invest in personnel training and a business strategy.
TT: Speaking of business strategy, how has President Chain Store responded to the economic downturn?
Hsieh: With demand down, we need to rethink our entire strategy, including store locations and operational costs. Indeed we have closed some unprofitable stores that were either located in bad locations or with unfeasible rental costs. We were cautious when launching new stores in the past and are even more so now because we don't want to misinterpret current market conditions.
We still plan to open new stores every month this year, but we are not going to focus on new store openings to lead sales growth. While some store closures were related to the downturn, some were also associated with the new schedule of employees taking two days-off every week. Since Taiwan adopted the two day-off system last year, our shop sales in commercial areas in major cities around Taiwan have been falling, down between 20 percent and 30 percent. Yet sales in the suburban areas or near tourist attractions were higher than before. We're still adjusting our business strategy as far as store locations go while we continue to close some stores, including those damaged by the heavy floodwaters brought on by Typhoon Nari in September.
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