Retailers Wary in Expanding Stores in 2016
Retailers in China are in a conservative mood towards any store expansion in the next 12 months. Based on a report by UBS Investment Research around 94 percent of retailers monitored have a moderate attitude in expansion, which is higher than 85 percent in 2015 and 72 percent in 2014. All surveyed stores or 67 percent said that they have plans for expansion by less than 10 percent for 2016 and only 6percent said that their store will have a 10 to 12 percent expansion in the next 12 months.
Any ambitious plans are coming from department stores that have set plans five years in advance and if they do open more branches, it will be extremely hard to attract the right brands to come in. as plans to expand stores are seen for this year around 22 percent of retailers re closing down stores that are non productive. Sportswear, clothing and textiles will see distribution channels efficiency to be enhanced that will help increase the listed companies share prices. Although industries such as shoes, department stores, skincare, supermarket and cosmetics will se distribution channels efficiency to decline..
2016 will also see the end of the copycat year and companies that spend on innovation and coming up with new products will get to achieve success, while low price and over designed products will not flourish. Chinese consumers are traveling overseas frequently and will gather enough knowledge of products on a global perspective, furthermore comments on products are found easily in the internet where consumers find better quality products.