The Retail Industry Is Facing Multiple Pressures.

The average rent cost of sample businesses in department stores and shopping malls increased by 10.4% over last year, up from last year.

The increase in rent costs is mainly due to the increase in business area. The ratio of rental cost to sales actually dropped by 0.2% in 2014. The cost of water and electricity decreased by 5.8% compared with last year, and the proportion of sales accounted for 0.8% basically unchanged.

Labor costs increased by 7.7% over 2013.

Although the growth rate eased (less than 18% last year), its share in sales was 2.9% last year.

DDT China and China Chain Operation Association jointly issued the annual report "China retail force 2015" (hereinafter referred to as "report"), showing that the cost of labor saving is not up to the increase of rent expenditure.

The report shows that labor costs are still the first big expense of supermarkets and large supermarkets, accounting for 54.4%.

Followed by rent and hydropower, accounting for 31.1% and 14.5% respectively.

In terms of the growth rate, the artificial cost of these three expenses decreased by 0.1 percentage points, the rent increased by 0.7 percentage points, and the water and electricity charges dropped by 0.6 percentage points, reflecting the efforts of enterprises to save money at high cost.

In addition, rent is the primary cost of professional shops, accounting for 57.6%, followed by labor and hydropower.

Labor, rent and hydropower three charges are rising, the largest increase of artificial growth of 10.1%.

The published business data also confirm this problem.

The report released by Yong Wang Group last month showed that staff costs increased by 6.7% in the first half of the year, and rent cost increased by 2.9%, accounting for 12.2% and 11.6% of revenue respectively.

By contrast, the growth of expenses in convenience stores is higher than that in other formats.

In 2014, the number and business area of convenience store sample businesses increased by 6% and 2.9% respectively, and sales increased by 5.3%.

The report thinks that high growth mainly comes from the expansion of stores and the improvement of business efficiency.

But the cost of rent and water and electricity has also risen sharply.

The rent increased by 15.9% over the same period, much higher than that of the previous year.

The growth rate of manpower, water and electricity increased by 7.6% and 6.7% respectively, and the increase was similar to that of sales.

The average rent cost of sample businesses in department stores and shopping malls increased by 10.4% over last year, up from last year.

The increase in rent costs is mainly due to the increase in business area. The ratio of rental cost to sales actually dropped by 0.2% in 2014. The cost of water and electricity decreased by 5.8% compared with last year, and the proportion of sales accounted for 0.8% basically unchanged.

Labor costs increased by 7.7% over 2013.

Although the growth rate eased (less than 18% last year), its share in sales was 2.9% last year.

The report points out that physical retail businesses face multiple pressures, slowing economic growth, upgrading consumption, new formats, and the rise of Internet and mobile shopping.

It has brought huge impact, and the rising operating cost has further reduced the profit margins of enterprises.

In contrast, convenience stores have low investment costs, short maturity cycles, coupled with the characteristics of space, time, service convenience and close to consumers, so that they will continue to grow rapidly in the coming years, continue to deepen farming in mature markets and gradually develop a blank market.