---
title: "Authoritative Release | 2018 China Chain Top 100 Released"
description: "The China Chain Store & Franchise Association's '2018 Industry Basic Situation and Chain Top 100 Survey' concluded, and the '2018 China Chain Top 100' list was released on May 9, 2019. In 2018, the top 100 chains achieved sales of 2.4 trillion yuan, up 7.7% year-on-year, accounting for 6.3% of total retail sales of consumer goods, up 0.3 percentage points from the previous year. The total number of stores reached 138,000, up 16.0% year-on-year. Excluding convenience store factors (including Suning Xiaodian), the growth rate was 9.1%."
author: "CCFA"
publisher: "New Distribution"
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published: "2019-05-13"
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---

# Authoritative Release | 2018 China Chain Top 100 Released

> The China Chain Store & Franchise Association's '2018 Industry Basic Situation and Chain Top 100 Survey' concluded, and the '2018 China Chain Top 100' list was released on May 9, 2019. In 2018, the top 100 chains achieved sales of 2.4 trillion yuan, up 7.7% year-on-year, accounting for 6.3% of total retail sales of consumer goods, up 0.3 percentage points from the previous year. The total number of stores reached 138,000, up 16.0% year-on-year. Excluding convenience store factors (including Suning Xiaodian), the growth rate was 9.1%.

The China Chain Store & Franchise Association's "2018 Industry Basic Situation and Chain Top 100 Survey" recently concluded, and the "2018 China Chain Top 100" list was released on May 9, 2019.

**Basic Situation**

**In 2018, the sales scale of the chain top 100 reached 2.4 trillion yuan, a year-on-year increase of 7.7%, accounting for 6.3% of total retail sales of consumer goods, up 0.3 percentage points from the previous year. The total number of stores of the top 100 chains was 138,000, a year-on-year increase of 16.0%.** Excluding convenience store factors (including Suning Xiaodian), the store growth rate of the top 100 was 9.1%, flat with the previous year.

In 2018, 18 companies including Suning, Yonghui, Easyhome, Intime, Red Star Macalline, Watsons, Meiyijia, Freshippo, Xinyulou, Kidswant, Dashenlin, FamilyMart, Pagoda, 7-11, Dazhang, Lawson, Huijia, and Jianzhijia achieved double-digit growth in both sales and stores. At the same time, 30 companies saw varying degrees of decline in sales and/or store numbers compared with the previous year.

The sales growth of the chain top 100 was partly due to the active expansion of omnichannel business. **In 2018, online sales of the top 100 grew by 55.5%, more than double the growth rate of national online retail sales of goods.** Companies such as Shihuifa, Lotus, Five Star Appliance, Yonghui, Meiyijia, Pagoda, and Sinopec Easy Joy achieved triple-digit growth. Excluding companies with a high proportion of online sales such as Suning, Gome, and Freshippo, the average online sales share of the top 100 reached 2.6%, up 0.8 percentage points from the previous year, with the supermarket format at 1.9%, up 0.6 percentage points.

While developing online business, the top 100 companies further improved operational efficiency through management optimization. **In 2018, the average labor productivity of the top 100 was 1.98 million yuan, up 3.0% year-on-year.** The average gross margin of the top 100 increased from 17.9% to 18.3%, with a median of 18.1%, flat with the previous year.

**Regional Leaders Have Mixed Fortunes,**

**Low-Tier Market Development Steady**

Regional leaders among the top 100 include two types: provincial leaders that base themselves in first- and second-tier cities or provincial capitals and expand into surrounding markets; and county-level leaders that base themselves in prefecture-level cities or counties and expand into surrounding markets. Regional leaders often develop multiple formats and hold high market share and leadership positions in local markets.

In 2018, provincial leaders saw sales and store growth of 4.2% and 5.5%, respectively, while county-level leaders saw sales and store growth of 4.9% and -0.7%, respectively, both below the average growth of the top 100.

In terms of operations, provincial leaders saw sales per square meter decline by 5.6% and labor productivity decline by 3.4%. Gross margin was 19.2%, slightly down from the previous year. County-level leaders performed significantly better than provincial leaders, with both sales per square meter and labor productivity improving, up 2.2% and 7.5%, respectively. Gross margin was 15.2%, up 0.3 percentage points from the previous year.

Provincial leaders often have state-owned backgrounds, with department stores as the main format. In recent years, they have faced competition from foreign and cross-regional retailers as well as diversion from online retail. As the market enters a period of low-speed development, mechanism innovation and format transformation and restructuring appear more urgent.

County-level leaders have flexible mechanisms and fit consumer demand, with less intense online and offline competition, but the market is relatively small, with limited consumer population and purchasing power. Some companies with good management foundations and strong strength are exploring expansionary growth.

**Hypermarket Growth Weakens,**

**International Brands Innovate for Change**

As the main format in FMCG retail, hypermarkets generally face the dilemma of declining sales per square meter and weakening profitability, with sluggish growth.

**In 2018, top 100 companies mainly operating hypermarkets saw average sales growth of 2.5% and average store growth of 3.6%, both significantly lower than the average growth of the top 100.** At the same time, operating costs of hypermarkets continued to rise, with total employee compensation up 13.0% and rent up 10.6%, with cost as a share of sales at a relatively high level among all formats.

In 2018, hypermarket sales per square meter fell by an average of 8.0%, but labor productivity increased by 4.9% and gross margin increased by 0.5 percentage points to 21.5%. Through management optimization, reducing staff and increasing efficiency, hypermarkets are seeking counter-trend growth.

International retail brands in the top 100 mainly operate hypermarkets. Statistics from some international brands show that in 2018, foreign hypermarkets saw average sales per square meter decline by 4.0%, labor productivity increase by 5.5%, and gross margin reach 23.2%, better than the average of top 100 hypermarkets.

International retail brands have spared no effort in introducing omnichannel retail. In 2018, online retail sales of foreign top 100 companies grew by 61.4%, 5.9 percentage points higher than the average of the top 100. Walmart expanded JD Daojia to more than 250 stores, and its online sales on a promotional day increased fivefold compared with the same day the previous year; Carrefour cooperated with Tencent to develop online business; AEON established a retail digital R&D institution in China; Ito Yokado launched Ito Mall; IKEA cooperated with WeChat to launch "IKEA Flash Store," covering online business in 149 cities; and Sun Art Retail introduced Alibaba's Taoxianda project, with cumulative online orders exceeding 45 million.

In terms of capital cooperation, international retail brands have also shown a positive attitude. Sun Art introduced Alibaba, Carrefour introduced Tencent, and Metro proposed a capital introduction plan. Yonghui acquired ParknShop, and Liqun acquired Lotte. The past two years have been the most active period for capital cooperation between foreign retail enterprises and local companies.

**Department Stores Struggle to Break Through,**

**Convenience Stores Advance Rapidly**

**Among the top 100 companies with declining sales and store numbers in 2018, department store operators accounted for half.** In 2018, the total sales of top 100 department stores increased by 3.5% year-on-year, store numbers increased by 3.9%, and online sales increased by 46.1%, all below the average of the top 100. Gross margin was 17.4%, down 0.2 percentage points from the previous year. **Although overall performance was mediocre, some department store companies still showed good development momentum. Taking Xinyulou as an example, in 2018, its sales and store numbers increased by 17.3% and 13.8%, respectively, setting a benchmark for department store companies that focus on third- and fourth-tier markets and adopt a buyout operation model.**

Among the various formats in the chain top 100, convenience stores led in growth. **In 2018, convenience store top 100 companies saw sales scale increase by 21.1% year-on-year, store numbers increase by 18.0%, with 11,944 new stores added, accounting for 62.5% of the total new stores of the top 100.**

Franchising is the main way for convenience stores to expand. In 2018, franchise stores accounted for more than two-thirds of new stores added by the top 100, with an average payback period of 23.3 months, slightly shorter than the previous year. Mobile internet technology provides effective tools for daily management of convenience stores. In 2018, mobile management tools for store operations and employees were widely used.

Source: China Chain Store & Franchise Association (ID: CCFA2013)

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