Can the home store change and seek a good strategy to save rent?

As 2012 came to an end, the real estate market picked up slightly, but the home distribution industry, which was lagging behind due to regulatory policies, is still wandering in confusion. On October 15, the National Building Material Home Furnishing Index (BHI) jointly released by the Department of Circulation of the Ministry of Commerce and the China Building Materials Circulation Association showed that the BHI data for September was 116.58, a year-on-year decrease of 4.75%. The cumulative sales of building materials home furnishing stores above designated size from January to September were 879.2 billion yuan, a year-on-year decrease of 6.57%. The home market in central cities and first- and second-tier cities is particularly affected.

Faced with the continued downturn in the industry, Guangzhou home furnishing stores are "connected" and cannot be optimistic. In the first half of the year, despite the unclear expectations of the home furnishing market, the big players in the home furnishing industry have not stopped expanding. On April 29, 120,000 square meters of Ouyada Home Furnishing Guangzhou Huangshi Store opened, almost at the same time, Oriental International Building Materials Center, located in the golden section of Keyun Road, announced the formal foreign investment; May 1st, Guangzhou North Tianjian Home Decoration Plaza "Cabinet Pavilion" "He was born. Coupled with the newly opened Red Star Macalline Tianhe Store, Space Aesthetics Museum in the urban area at the end of last year, and Panyu Home Furnishing in Panyu, Guangzhou has added hundreds of thousands of square meters of home furnishing stores in just one year.

In the second half of 2012, with the withdrawal and rectification of the Red Star Macalline Pazhou store, as well as the quiet rise of various furniture factory wholesale cities and online home shopping malls, Guangzhou home stores began to form a new pattern, with little news of opening. Store expansion has entered a period of stagnation. In this market situation, home stores either directly compromised the rent reduction, or turned to the department store format, or turned into a factory wholesale city, and they all sought to save the market. Among them, it is particularly entangled in the issue of rent. Some stores are "unilaterally compromised", and some stores are "heating together". What is going on?

Unilateral compromise VS Bao Tuan heating home store changes to seek a good strategy to save the market

Square Voice: Rent reduction in stores is king or will become a major trend


Under the impact of the cold market in 2012, some home furnishing enterprises have been shut down, and sales of building materials stores have experienced a significant decline. Merchants entering new stores have been "lived like years", and even rental costs have accounted for more than half of the total store operating costs. . If the shopping mall can properly reduce rents, it will help ease the business pressure of the merchants and avoid the vacancy of the shops due to the difficulty of renewal of the merchants. Under this situation, the rent reduction of the store has become the only way to balance the interests of the three parties of the store, factory and dealer. In this regard, the relevant person in charge of Good Luck Home Plaza believes that property-style home shopping malls must change the attitude of landlords and spend difficulties with merchants.

In the past two years, Haoyunlai Home Plaza in Baiyun District has twice launched rent reduction tools, becoming a typical representative of rent reduction in Guangzhou home stores. It is understood that as early as May last year, under the condition that the rents of most stores were untouchable, Lucky came to take the initiative to launch a 30% discount on shop rents, and it was as low as 40% in January this year. The rent on the first floor of the mall is reduced to 48 yuan / square, and the rent on the third floor is as low as 21 yuan / square, and no management fee is charged. The rent level is much lower than other stores in the same district.

Industry veterans believe that rent is the most important operating cost for merchants. Many merchants have reduced their expenses in the face of the economic winter. However, if the rent, which accounts for the largest part of the cost, has not been adjusted, it will be difficult to get through. As for home furnishing stores, since they are commercial real estate in essence, it is undeniable that rent collection is an important means to maintain their survival. However, when the market is not optimistic, the conflict of interest between home furnishing stores and merchants must be intensified. A new balance can be reached through rent adjustment. For this reason, at the end of this year and in 2013, the reduction in the rent of home stores should be a major trend in the development of the industry.

Anti-party attitude: rent reduction is not conducive to the development of the store can not save the overall situation of the market

From the perspective of the Guangzhou market, the active rent reduction of home stores is still in the stage of "little play". For the market tool of "rent reduction", some home stores said that they should use caution. Some people in the industry believe that the unilateral compromise of the household store to implement rent reduction will not solve the substantive problem. "Rent reduction is only a short-term helpless move. In a situation where the market is not optimistic, the lone army will be defeated. To survive the winter, you must hold a group to warm up. The store (owner), merchant (tenant), and manufacturer (supply side) support each other. Understand each other and jointly benefit consumers. "Said Huang Zushen, Director of Operations at Hongshuwan Furniture Expo Center.

"As a furniture mall , we are increasing marketing and marketing efforts, at the same time, we are using some funds to benefit consumers; the factory allows dealers under the premise of capital preservation-our mall joint merchants to communicate with the manufacturers; the factory makes profits and distributes The merchant lowered the profit point, and directly benefited our customers. "Huang Zu told the SouFun reporter with great joy," The way of holding a group to warm up has not only won praise from customers, but also has been recognized by many merchants. Before the contract expires, our mall has already Achieving 100% contract renewal. ”Similar to Hongshuwan Furniture ’s“ Holding Groups for Heating ”, Guangzhou Jinhaima and Xiangjiang Furniture transformed into brand factory wholesale cities, and direct cooperation with brand factories also achieved good results.

However, the premise of "holding together for heating" is not to rush down the rent because of changes in the market environment. With proper rent and adequate cash flow to support brand operation and market promotion, the home store can only be operated normally, otherwise it would be "a clever woman can't cook without rice". Therefore, when the market is bleak, the rent is cut down suddenly, and the marketing and promotion money is used to make up for the lack of the market, but it is even more unfavorable for the long-term development of stores and merchants. "To solve the current difficulties, we must rely on broadening the sales channels and changing the" sitting business "into a" business ". If the merchants simply rely on rent reduction, it will only make the business worse and worse, and finally everyone will have no food to eat."

Home stores focus on "Changzhijiu" The future market is still promising

Generally speaking, as an important channel for the retail of household products, household stores account for a large proportion of the total retail sales of household products. But in recent years, traditional store operations have been constrained by factors such as the sluggish status quo and high rents.

In October of this year, the Red Star Macalline Pazhou Store was withdrawn from the market, and nine merchants jointly sued the related companies in order to recover the direct economic losses caused by the withdrawal and part of the cost of the initial investment. At this point, the withdrawal event reached its climax, but it was far from the end. According to people familiar with the matter, although the Red Star Macalline Pazhou store had significantly reduced rents in the second half of 2011, it was difficult to conceal the losses caused by the downturn in the home market. Many brand dealers could not sustain it, and it was difficult to pay rent and withdrew. People, or simply do not even need the goods, making the operation of the mall unsustainable. This shows that the rents used to support the operation of the store are not the only decisive factor for the normal operation of the store.

Huang Zushen told Soufun reporters that the newly opened or rectified stores in Guangzhou in the past three to four years have actually struggled to operate. "Most newly-entered home furnishing stores in the city are unacceptable, and rents are too expensive; some local home furnishing stores that do not have the influence of the brand have a lack of management and face various problems. There are only a few of them. An old store brand that has grown up locally and is recognized by consumers is relatively moist. This part of the store management team is stable, all aspects of marketing are done in place, and consumers feel it is real when they come. "

A veteran believes that the slump in the home furnishing industry is firstly affected by the downturn in the property market, but the decline in consumer confidence and the plummeting popularity of the shopping malls are as harmful to the home furnishing industry as the property market regulation. How to save consumer confidence is a difficult problem facing the home industry. Since the first half of 2012, the Guangzhou home furnishing market has entered into a change. Various furniture factory wholesale cities and online home shopping malls have emerged. Online and offline activities in the store have been synchronized. Various signs indicate that the future market is still promising.

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