Chinese retailer Lianhua Supermarket Holdings has reported lower half-year profits amid a drop in same-store sales.
Lianhua, which has over 5,000 stores across the country, booked a 15.3% fall in net profit to CNY331.7m (US$52.2m) for the six months to the end of June. Operating profit was down 15% at CNY417.3m.
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The retailer said its turnover increased 3.9% to CNY14.58bn but admitted its same-store sales declined 1.7% amid “fierce competition” and a slowdown in the Chinese economy.
Lianhua said China’s GDP increased 7.8% in the first half of 2012 but “fell below 8% for the first time in three years”.
As well as the increased competition, Lianhua said the Chinese government had introduced measures to improve food safety, “rationalise the relationship between retailers and suppliers” and “strengthen management and discipline in the retail chain market”.
It added: “China’s chain retailers were under more pressure in the first half of 2012, and the growth in sales and profits was sluggish.”
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