Suning Xiaodian, the convenience store chain of Chinese retail giant Suning, acquired 61 convenience stores in Guangzhou from Hong Kong conglomerate Fung Group for an undisclosed sum, according to local media.
Facing intense competition in the mainland convenience-store market, the network of 61 outlets has failed to make a profit since the brand’s launch there in 2002. The Guangzhou Circle K business recorded a net loss of HK$21.4 million in 2014 before then parent Convenience Retail Asia sold the business to its 41% shareholder Fung Group the following year for HK$48 million (US$6.12 million). Since then, Fung Group has closed at least 12 stores there.
Convenience Retail Asia continues to own and operate more than 300 Circle K stores in Hong Kong, Macau and Zhuhai.
Suning Xiaodian is the Nanjing-based firm’s entry point to small-scale community shops. So far it has 6,000 outlets in over 70 cities, serving 35,000 communities and 120 million consumers. It has already bought Dia China and Carrefour last year. The acquisition of Circle K outlets was part of its efforts to expand in southern China.
The president of Suning’s consumer-goods business, Bian Nong, said Circle K’s experience in merchandising, supply chain and store management will supplement Suning’s existing operations in Guangzhou.