The economic growth slows down, the interests of the stores and the interests of the merchants are getting bigger and bigger. One wants to increase rents to maintain high operating costs and healthy cash flow. One is to tighten the belts for profit, and to be more sensitive to rent increases. .
Tenants: bad business, spending continues to outweigh revenue
In the 325 National Road Lecong and Longjiang Road sections, a large number of Furniture stores, furniture brand headquarters and exhibition centers are gathered. It is one of the well-known furniture production and trade distribution centers in the industry. It is called “Shili Furniture Galleryâ€.
On the two sides of the national road of about ten kilometers, it now gathers Louvre Museum Home Expo City, Red Star Macalline, Southern Furniture City, Dynasty Furniture City, Shunlian Furniture City, Tuanyi Furniture City, Nanhua Furniture City, Fujiwara Furniture City. And a number of different home furnishing stores, including Dongheng Furniture City, thousands of large and small furniture merchants here to gold.
However, the iron-selling store, the flowing merchants. The increasingly difficult business, the smaller and smaller passenger traffic, and the singular rents have finally brought the contradiction between merchants and stores to the surface.
On January 6, 2015, Lecong several merchants in the furniture city launched a large-scale event of “stopping the protest and demanding rent reduction and retreatâ€. At that time, Lecong’s lowest-grade furniture stores, rents were also from dozens of 2004. Yuan Yiping rose to around 100 yuan / square meter, and the first-line store rents ranged from three to four hundred thousand yuan. From 2015 to 2018, store rents are still rising.
Why are merchants very sensitive to rent? The reason is that since 2007, it has been affected by the big environment. The business is not as good as before. The regular peak season is even lighter than the previous off-season. The monthly turnover is from more than 1 million to hundreds of thousands to tens of thousands. Many merchants have closed their stores, and more old merchants are also carrying forward their weights. They can't bear to give up their main business for many years. They can only take other income subsidies to maintain the normal operation of the store.
Marketplace: high operating costs, tight cash flow
For the home market, the increase in rent is also for survival and development:
1 In order to comply with the development of the times, attracting people's traffic and gathering popularity, the store has carried out a large number of hardware and software upgrades in operation, and the operating costs remain high;
2 In the case of a downturn in the economic environment, the investment in the early stage of the store is large, and it is necessary to withdraw funds to keep the cash flow;
3 stores have their own market order to maintain, if a store arbitrarily cut prices, it will cause dissatisfaction with peers, is considered to disrupt the market, will be resisted, compared to the vicious competition of price reduction, the same category, the same grade store or choose "Group operations", collectively raise prices and jointly profit;
4 Market factors determine that the rent will rise regularly. Facade rental contract is usually signed a three-year, while rental store usually price was up three to five years will be a year of a rose, according to the actual situation when appropriate to renew the rent increase is normal. Even if you don't renew your visa, there will be new tenants to rent. In the period of rising prices, it is normal for rents to rise.
In terms of the stores on the “Shili Furniture Galleryâ€, they have basically been upgraded to build their own brands, in an effort to attract merchants at home and abroad in the context of the rise of national furniture distribution centers, and basically every upgrade means Capital investment and continuous operating costs, the so-called "wool out of the sheep", rising rent seems to be reasonable.
It’s just that “there is no hundred days of red flowersâ€. With the advent of the world economic cycle, all walks of life, as one of the small molecules, are naturally affected by the trend. In an era of oversupply in the market, it takes more wisdom and effort to get high-quality growth in business. Even in the prime market, it can't rely on store drainage, but also need to take the initiative, bring traffic and fans. .
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