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Park'N Shop Tries Again

Undeterred by the massive loses it raked up during its first go-round in Shanghai, Park'N Shop says it plans to open a Carrefour-sized super store in the city complete with restaurants and entertainment facilities.

The chain store, which is owned by Hong Kong's Hutchinson Whampoa Ltd., once had 21 outlets in the city, but poor sales and growing losses forced them to close 20 stores, with the only remaining market located in the Westgate Mall on Nanjing Road.

"We are going to open mega stores instead of supermarkets in mainland cities," said Iwan Evans, an executive with the group that manages Park'N Shop. "Apparently, we have to avoid the fierce competition among supermarkets and seek a better way out."

The new strategy is based on consumer surveys that found a growing number of local residents prefer to shop at larger markets like Carrefour that sell sporting goods, home appliances and clothes as well as traditional fare such as meat and produce, said Maggie Li, a spokeswoman with Park'N Shop.

The company is still searching for a site to build its new store.

Park'N Shop's first store on the Chinese mainland was opened in Shenzhen in 1984. The popular Hong Kong chain came to Shanghai in 1994 and invested 46 million yuan for a 70 percent stake in a joint venture with Shanghai Julu Food Group.

The company hit its peak locally in the late 1990s when it had 21 outlets in Shanghai, but they were running in the red. Company officials won't say how much money they lost before shutting down 20 of its stores in 2000.

"Mainland customers are not used to buying vegetables and other imported goods with relatively higher prices at our stores, which caused the losses," said Li. "So we withdrew and tried to adjust our strategy according to market conditions in mainland cities."

Park'N Shop opened four mega stores in Guangdong Province during the past year. And Evans said the company will open eight new mega stores on the mainland by the end of this year.

( eastday.com September 20, 2002)

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