According reports from local media, Tiens Group has closed its only supermarket in Beijing — the outlet operated under the brand name of BannerStore.
A representative from the leasing department of Beijing Ocean International Mansion said that BannerStore had only one outlet in Beijing, which lead to inconvenience in distribution and management as well as high logistics costs. In addition, the labor costs of the store were higher than general supermarkets. These factors contributed to the difficulties BannerStore had in making a profit in Beijing.
In fact, apart from the Beijing store, some of BannerStore's franchise stores started to close earlier this year. BannerStore's first global flagship store, which was opened in Tianjin in February 2007, was closed earlier this year, and its only store in Harbin also ceased trading around the time when the Beijing store was closed.
This contrasts with Tiens Group's strong determination to enter the retail industry. In December 2006, the group announced that it would invest USD250 million to establish the BannerStore Retailing International Investment Group to explore relevant businesses in China. In February 2007, the company opened its first global flagship store in Tianjin and announced it would actively develop the Tianjin market while expanding to major cities in North China and Northeast China.
Li Jinyuan, president of Tiens Group, had said that the company planned to open 400 outlets in China within three years and set up 1,000 directly-managed supermarkets by 2009. By 2010, BannerStore would have 4,000 supermarkets around the world by direct management and franchise.
So far, although BannerStore says on its official website that it has more than 500 stores in 105 countries, including the United States, Britain, Germany, Russia, and Indonesia, it has few stores in China. Statistics on the website shows that the company only owns three BannerStore supermarkets and 32 BannerExpress convenience stores in China.