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Lotte to sell its mainland supermarkets by year-end

By Wang Zhuoqiong | China Daily | Updated: 2017-10-13 08:11
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South Korean conglomerate Lotte Group said on Thursday that it expects to sell its Lotte Mart stores in China by the end of this year.

The company has received interest from several buyers for its China stores and was evaluating the proposals, according to a Reuters report.

"We are in detailed talks with some of those companies," Lim Byung-yun, an executive vice-president at Lotte Corp, the group's newly launched holding company, said at a news conference.

The size of the deal is expected to be small at a couple of hundred million dollars, a banking source said, declining to be identified as the talks were confidential. Goldman Sachs has been picked to manage the sale, according to Reuters.

Jason Yu, general manager of Kantar Worldpanel China, a research firm, said the likely buyers would be from North or East China. "I do not know who they are, but some local players are still looking for store expansions in Beijing or Jiangsu and the stores are at good locations," he said. Yu had earlier said that Lotte Mart has been facing competition from Chinese retailers and e-commerce giants. Because of its limited presence, it could not build economies of scale or create an efficient supply chain, he said.

Hypermarkets, supermarkets, and convenience stores in China grew by 3.5 percent in the second quarter of the year, according to Kantar's latest report. Sun Art Group, Auchan and RT-Mart, which are among the country's top 10 retailers, saw their market share grow or stabilize in the second quarter compared to the previous year, as they set up more stores to expand their footprint and pursued multichannel strategies to cope with changing consumer demand.

Among international retailers, Carrefour saw its market share recover on a quarterly basis as it opened 30 small format neighborhood stores under the name "Easy Carrefour" to appeal to younger shoppers who want convenience and a relevant mix of merchandise.

Local retailers continued to outpace their global counterparts with Wu-Mart's market share rising from 1.7 percent to 2.0 percent year-on-year.

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