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Wal-Mart, Carrefour Spur Local Logistics Alliance
Shanxi-based supermarket chain Meet All partnered with 10 local chains to establish Meet All Logistics Company Ltd. in Taiyuan on January 8 to lower costs and compete with encroaching foreign supermarkets, reports China Business News. According to the report, French retailer Carrefour decided to enter Shanxi on January 6 and Wal-Mart (NYSE:WMT) has grabbed 10-20% of the local market and put one local chain out of business since opening one store in Taiyuan, Shanxi's capital.
The 11 local chains are expected to invest RMB 700-800 million, RMB 200 million initially, to build the company by year end. Meet All will hold 51% stake in the new business; the 10 other stores will split remaining stake evenly.
The logistics center can reduce cost by 50% and we intend to open logistics branches in other Shanxi cities including Changzhi and Datong going forward, said Meet All chairman and president Chu Dequn. Meet All annual sales growth stayed constant at 25% in 2008, while profit growth slowed to under 10% as compared to 20% in 2007, according to the report. The 11 chains have a total of 100 stores and annual revenue of RMB 8 billion.
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