The adjustment of the hypermarket format is still ongoing. Recently, Walmart has reported store closures in Shanghai, Fuzhou, Tianjin, and other places. On June 12, Walmart closed three stores in a single day: Fuzhou Lianxin, Wuliting, and Tianjin Heping Road. According to Lianshang.com, in the past three months, Walmart has closed 11 stores in total. Specifically, two in March (Shenzhen Nanxin and Shaoxing Keqiao), two in April (Tongliao Heping Road and Nanjing Shuiximen Street), three in May (Tangshan Xinhua East Road, Wuhu Zhongshan North Road, and Zunyi Spring Fort), and four in June so far (Shanghai Baoshan 128 Memorial Road and the three closed today). ▲ Walmart's store closures in the first half of this year, as compiled by Lianshang.com based on media reports. Regarding these closures, Walmart stated that the purpose is to further optimize its layout. However, industry analysts say that for merchants, the indicator to measure store performance is relative profitability rather than absolute rental data. Store closures largely indicate a decline in Walmart's performance, and the hypermarket format is currently under significant pressure. In fact, over the past several years, Walmart has been continuously adjusting by closing stores. According to Lianshang.com, Walmart closed 5 stores in China in 2012, 15 in 2013, 17 in 2014, 1 in 2015, 13 in 2016, and as many as 24 in 2017. ▲ Notice of closure for Walmart's Zunyi Spring Fort store. In addition to its own operational planning, external factors such as market competition are also key to strategic adjustments. Hu Chuncai, general manager of Shanghai Shangyi Consulting, previously told Lianshang.com that from an industry-wide perspective, the hypermarket format is on a declining track. On one hand, e-commerce has taken away a large share of high-margin products, potentially reducing the overall gross profit supporting hypermarkets by 30-40%. On the other hand, hypermarkets have been in China for 20 years, and many store leases (typically 15-20 years) are expiring, facing rent increases from property owners. Stores that were once profitable may have to close. These two core factors are important reasons for the large number of hypermarket closures. Of course, store closures are not necessarily a bad thing. They are part of the adjustment of the overall business ecosystem. In China, the hypermarket format currently accounts for a high proportion of 70-80%, whereas in Japan, the convenience store format is the most dominant. Beth Bech, Walmart's global executive vice president and chief administrative officer of international, previously explained closures in an interview: "When Walmart develops in a place, we always look at the next 30 years of development, including the development of the local business district, population growth, road infrastructure, and overall market development. We make predictions based on this, but over time, these predictions may not fully reflect reality, and some stores may not serve local customers well. In such cases, we choose to close some stores. For the healthy development of retail, it is important to manage the store portfolio and ensure the overall health of the stores." While closing stores, Walmart is also actively opening new ones. In 2017, Walmart opened 31 new stores in China, including 27 hypermarkets and 4 Sam's Club stores, entering cities such as Yingcheng in Hubei, Emeishan in Sichuan, Duyun in Guizhou, and Puning in Guangdong for the first time. In 2017, Sam's Club expanded to 16 cities with 19 stores, entering Nanjing, Changsha, and Nanchang for the first time. In addition, Walmart has launched compact hypermarkets, with 5 stores currently in Kunming, Wuhan, and Chengdu. It is understood that this model will be promoted nationwide in the future. In terms of format innovation, Walmart recently launched its first smart community supermarket, "Hi Select," in Shenzhen. This is Walmart's third format in China, following hypermarkets and Sam's Club. It is planned to open about 5 more Hi Select stores in Shenzhen, Guangzhou, and Dongguan by the end of this year. The second Hi Select, located in Futian District, Shenzhen, is scheduled to open in August this year. -END-