Beijing supermarket chain Wumart Stores plans to spend 500 million yuan on new stores and acquisitions to strengthen its position in the face of intensifying competition from foreign retailers.
The group announced yesterday net profit jumped 52.4 per cent to 164.53 million yuan last year because of improved margins resulting from greater bargaining power and economy of scale.
'We are eyeing two or three acquisition targets but there are no concrete details at the moment,' finance director Xu Ying said.
Early this month, Wumart raised $451.5 million through a share placement after agreeing to buy 75 per cent of Beijing MerryMart Chain Stores Development - Beijing's No4 supermarket chain by sales - for 370 million yuan.
Ms Xu said the company would maintain speedy expansion without sacrificing profitability.
Chairman Zhang Wenzhong said Wumart would actively seek merger and acquisition opportunities and expansion through organic growth.
The firm operates 12 hypermarkets, 47 supermarkets, 139 self-owned convenience stores, 297 franchised convenience stores and eight drug stores.