A strange phenomenon has emerged in a mainland commercial street, many stores dealing with clothing, apparel, household goods, etc. have closed down in large numbers, but at the same time restaurants, real estate agents and pharmacies keep emerging.
According to an April 23 report, in a commercial street in a mainland city, many stores doing clothing, apparel and household goods have locked doors, with A4 paper printed or handwritten “Wanted Shop for Rent” posted on the front. And with the closure of these physical stores echoed the street is full of milk tea, snacks, fried chicken, hot pot and other restaurants. In a pedestrian street less than 1 kilometer long, there are five milk tea stores and four fried chicken stores. The same as the food and beverage stores continue to open, but also full of real estate agents and pharmacies on the street.
Because the mainland real estate fever has been high, the practitioners of high commission, real estate agents should not be surprising, and pharmacies because of the high profits also attracted funds into the industry, in the first-tier cities in mature business district, has been exaggerated to every 100 meters there is a pharmacy. Many pharmacies in street-level stores basically sell only expensive and highly profitable drugs. This makes it possible for their operating income to fully cover expenses and maintain high profits every month, even though their customer volume is low.
On the mainland, residential housing prices in many cities are getting higher every year, but the investment value of stores is shrinking, especially in some second- and third-tier cities, where not only are stores no longer in demand, but even some commercial complexes are struggling, and the frequency of subletting and closing of brick-and-mortar stores operating in apparel, home furnishings, etc. is increasing.
The reason for the closure of these physical stores, first of all, because of the rise of e-commerce online shopping, and cheap, coupled with the popularity of smart phones to facilitate people’s online shopping, e-commerce to steal some offline business.
Secondly, there is an oversupply of stores. In the international standard, the normal standard of commercial area per capita between 0.8-1.2, more than 1.2 indicates that there is a surplus. According to international standards, more than half of the continent’s cities have more than 2 stores.
Then again, high prices squeeze the physical store, which is the more critical factor. A store operating costs include three major items: store rent, personnel expenses and the cost of operating the goods themselves. Among them, store rent is the biggest cost, especially in some first-tier cities of the net commercial street, a less than 20 square feet of store rent can be as high as 100,000 yuan / month, accounting for about 80% of the total cost.
Compared to the impact of e-commerce on offline brick-and-mortar stores, the high price of housing on brick-and-mortar stores has never been greater.
The article has triggered a large number of netizens around and resonate.
Netizen “black mamba” said: “I have four pharmacies within 100 meters and seven within 200 meters.”
Netizen “formerly known as XiaoWuGe||JinShiYuMa” also said, “This is really it! This economic situation is really disturbing!”
Many netizens agree that high prices have crushed brick-and-mortar stores.
The net name “unicorn goat” said, “It’s not strange at all, high housing prices have led to this in most cities.” “Feng Hua”: “High housing prices lead to high costs for the real economy.”
Netizen “rain” that this situation will create a vicious circle: “Most people rely on small businesses to support their families, the entity income is less, housing, medical care accounted for the bulk of the money, there is still free money to come out to spend?”
Some netizens also expressed their unease about this state of affairs. “DA wins” that “after the abnormal development, I wonder what the consequences will actually bring?” “False prosperity will eventually come out of the water!”
“Boss~ Serve!” said: “The real economy tends to be one-sided and similar, is not conducive to the healthy long-term development of the social economy, and even more detrimental to entrepreneurship and employment. A good business ecology, diversification of the real economy is an essential condition.”
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