Dairy Farm International Holdings' convenience store operator 7-Eleven will slow its expansion plans in southern China due to stronger than expected competition and soaring rents. The company had indicated it planned to open at least 70 outlets this year as part of a US$20 million expansion plan. Its joint venture which secured an operating licence from Beijing last year, has opened about 26 outlets this year. This bring its stores to 94. David Tso Kun, chief executive of 7-Eleven Hong Kong and southern China, said the company had underestimated competition from hypermarkets, supermarkets and small stores. 'We have too many rivals in the market,' he said as the company celebrated the 75th anniversary of worldwide operations by offering three new online services to drum up business in Hong Kong. Mainland retailers were also forced to offer discount sales to boost consumer spending amid China's deflation, he said. Despite the week-long labour holiday in May, retail sales in China remained sluggish. Meanwhile, retail rents in Shenzhen and Guangzhou, especially in prime locations, were unreasonably high so the number of stores to be opened this year would be less than planned. Mr Tso said mainland consumers generally saw supermarkets as their primary purchasing outlets. 'Mainlanders are still confused by the differentiation between convenience stores and other retailers.' The company, at present, could only target a small group of customers who preferred to pay a premium for 24-hour services. However, it was still optimistic about the market and had made a heavy commitment to the business, including a logistics system to enhance efficiency. Yesterday, the company unveiled partnerships to provide an e-currency pre-pay service, online book sales and an online photo processing service.