Auchan to double stores in China

French supermarket group Auchan SA, which currently runs 17 stores in China, will add as many as eight outlets this year and 10 next year, with plans to double the number of its stores in China in two years.

Auchan on average opened two stores a year in the past eight years. Its China sales jumped 32 percent to 6.2 billion yuan (€596.9 million) in 2006. "We're ready to grow much faster," said the company's spokesman Zheng Jichang in China. "We'll aggressively expand in east China where people have high incomes," Jichang added.

Auchan is currently behind French rival Carrefour and US retailer Wal-Mart in expanding in the world's fourth-largest economy, where retail sales grew about 10% annually in the past decade. Carrefour plans to open 20 hypermarkets per year in China; and Wal-Mart operates 73 stores in 36 cities in China and in February agreed to buy 35% of Trust-Mart, the owner of 101 supermarkets in the country.

Auchan also competes with local retailers such as Bailian Group Co. Ltd., which is also stepping up consolidation in an industry the government fully deregulated in 2005.

China's retail sales are expected to expand 14% this year to 8.7 trillion yuan (€837.6 billion), accelerating from a 13.7% increase in 2006, the Commerce Ministry forecast in a report published in June. Foreign retailers operating in China posted an average net margin of 3.7% in 2006, according to the China General Chamber of Commerce.

(Source: Reuters)