Chapter 447

Chapter 447: Closing shops, big sales!

January was basically the twelfth lunar month.

The tendency of Chinese people during the twelfth lunar month was they were like drained of energy and just waited for the New Year.

Then after the Spring Festival, the Chinese New Year was finally over after the fiftieth of the first Lunar Month.

During that time, most people’s minds were filled with what they should do during the New Year.

What was there to do at New Year?

A very important thing was to prepare the New Year’s products.

Many factories or companies related to the New Year’s product could achieve one-third of their annual sales in one month just before the Spring Festival.

The same was true for companies that were in sales such as supermarkets.

Even supermarkets that usually didn’t do well would still be crowded with people during the twelfth lunar month and they didn’t even have to open air conditioners.

What if at that time there were supermarkets that were about to close down so they were making sales?

Then it was even more amazing!

Everyone would be squeezing in!

It was how things went.

Since the Yongxing Supermarkets’ 32 supermarkets all over Zhejiang, except the 5 in Lin’an, announced the decision to close down the stores and suspend their business, their stores were filled with staff by 7 am.

The staff had to restock the products multiple times at 7 am.

The products were also very cheap.

For example, the apples at the entrance, the market sold it at 5 yuan a catty while they sold it for 4 yuan a catty and 7 yuan for two catties.

The Gannan navel orange nearby was 6 yuan for the catty usually but there it was 5 yuan per catty and 20 yuan for 5 catty.

Both of those products were bought by signing large-volume contracts with the producers and the supermarkets could get a 15% profit margin even at that price.

The prerequisite was that tens of millions of catties word of products had to be consumed.

So there was a long queue of people at the entrance of every supermarket as people would go there to buy apples or navel oranges even if they didn’t shop for anything else.

As for vegetables, the Chinese cabbage was at 20 cents per catty, celery, lotus root, pumpkin, etc… were all so cheap that people were willing to buy a few more catties.

The pork, chicken, duck and geese were also fresh and cheap, it was about 20% cheaper than the usual market and the weight was quite adequate also.

The grandpas and grandmas usually dragged their small carts to shop in the markets and returned fully loaded.

And they rushed to grab those discounted products when the supermarkets opened at 9 am.

The commonly used homely products such as firewood, rice, oil and salt, a roll of paper bought and one gifted, candies, melon seeds snack… everything was marked with a 50% off or 30% discount, they all put it in their shopping cart.

Even knowing they couldn’t wear the T-shirts, vests, shorts, autumn coats, thin sweaters, etc… They were still selling the ’10 yuan each’, ’99 for the coat’, ‘pure wool sweater at 199’ and so on. The people couldn’t control themselves under that attraction.

In short, the people lost themselves amidst the ‘money losing discount’, ‘unstocking’, ‘big sales’ banners and lively music, they desperately stuffed products to their carts.

The elderly and middle aged people came during the day while the young people came during the night and bought more things.

For example, beers, beef jerky, nuts etc… they would unknowingly buy up to two or three hundred yuan.

They couldn’t hold on when they saw the price tag of ‘12yuan for 12 beers’.

On the first day, the turnover rate for the 32 supermarkets was more than 37 million!

This almost scared Zhang Duocai to death.

Having Yongxing Supermarkets for so many years, the best turnovers at their peak was 170 million yuan in a year for a single store and it was in Lin’an.

It was already considered very good.

Last year, their best was only 80 million while their worst was 40 million in other places. Their average was 150k turnover in a day so they really couldn’t sustain it.

But it was better now.

With the strategy given by Chen Huan, Yongxing Supermarket made big purchases in advance and used the large quantity to lower the prices before carrying a big discount.

Like that, their daily sales reached 37 million, which was an average of 1.16 million per stores, based on that number it would be 400 million in a year for each store!

How crazy was that?

It was even higher than a single store of Wal-Mart and Carrefour together.

Of course the profit there was very low.

With a turnover of 37 million yuan, the overall gross profit margin was 12% so a gross profit of 4.5 million Yuan.

Taking expenditure such as taxes, 3 million would be left at the end.

But 3 million was also great, wouldn’t it be a net profit of 90 million at the end of the month?

Although 90 million was nothing to Zhang Duocai’s 30 billion wealth, this was the last sales before closing the stores!

The rent and labor costs would usually cost more than a hundred of million.

Now they wouldn’t lose any money but make money on the contrary, which was a great improvement.

Moreover, there was another reason for that.

The current enthusiastic purchase was done due to the special time period that was the Spring Festival when everyone had a strong urge to consume.

If the time period was changed, a closing store discount would be popular but not that popular.

The estimated profit of 90 million was a conviction to trust Chen Huan more for Zhang Duocai, which was more important than the money.

At this moment, the 5 stores of Yongxing Supermarkets in Lin’an didn’t follow the 32 others stores as they closed at the end of December for renovation.

All the original structure was broken down and replaced by the new model designed by Chen Huan.

The Zhang Family’s operating team was also starting to contact various suppliers while the other staff would be getting familiar with the new model.

Such as training the shop assistants and so on.

Their schedule was tight as they should open at the Chinese New Year on February 8th.

It only gave them 45 days from closing down the shops to reopening.

The decoration wasn’t a big deal as it was just increasing the money to accelerate the work. The most important point was to change the business thought process.

Zhang Duocai became the main lecturer after hearing much and seeing much from Chen Huan.

He showed beautiful pictures, computer drawings etc… that he had spent a lot of money to make to his employees and taught them himself in the planning room.

This was a test for Boss Zhang who hadn’t been in the front line for many years.

But Zhang Duocai was filled with energy and his long lost enthusiasm for entrepreneurship.

Boss Zhang was filled with motivation as if he just started!