Locally, in Beijing the smaller mom-and-pop retail shops as well as national chains are being forced out by high rents, as rental agreements expire and the minimum increases are at least 100 percent. Mix in shifting consumer behavior, particularly the popularity of online shopping, and it is a brutal environment for the least efficient retailers.
A reporter for the Beijing Evening News heads to Xinjiekou Beida Street to see the impact on the ground.
Yesterday afternoon, just the beginning of autumn (Liqiu August 7-22) of Beijing is still hot. From Jishuitan subway station out along Xinjiekou North Main Street South a rough count shows about ten small stores at least half with the words “sale”, “clearance” and even more than one “contract expiration” two or three family has to pull the shutter doors, completely closed shop closed state. The old familiar clothes shop has been replaced by a shop selling steamed buns and meat patties. A clothing store retreated from higher rental shops along the street to the alley inside, to attract customers it has a “Grand Sale” promotion red sign hanging.
Contact by telephone sublease front of the store, correspondent to turn to a store owner. He told reporters that although the lease is to expire in April next year, but because of the difficult business environment, ready to move up, “mainly rents are too high.” The owner said, Xinjiekou traffic here also, but his rented storefront upper and lower rent would more than 1.5 million yuan a year, an average of 129,000 yuan a month, plus the prior renovation costs, operation stress is too great. Now the shop is handbags sale, sell a single inexpensive earn more than twenty yuan, the most expensive also more than fifty yuan. Even under the most expensive 50 yuan terms, without considering other costs, the shop must to sell 2580 each month to pay the rent. The boss said, in order to share the rent pressure, a lot of shops in this street are sharing the rent two- and three-ways.
Chain stores are feeling the pressure as well:
In fact, more than street shops closed tide appears, district located in Daphne, Metersbonwe, Ning [ -0.73% ] , Jeanswest and other brand shoes and apparel shops are also rapidly reduced stores. According to Daphne released the first half of 2016, a profit warning report shows only the first half of this year, Daphne net off store 450, including 400 direct sales stores and 50 franchise stores. Once all the rage Metersbonwe business situation is not optimistic about 2013 sales stores and franchise also has nearly 5000, the end of 2015 has been remaining 3700, store sales decreased by about a quarter. Jeanswest in the past 4 years has closed 1012 stores, at the end of 2015 had only 2249 retail stores.