"Brother Feng, the rapid expansion period of our supermarket has passed. Now we are mainly expanding in cities below the third tier. Our expenses have dropped a lot. We will have a large cash balance soon." Fu Guangwei said with a happy face.
After investing for so long, I can finally see dividends.
Although there were dividends before, they were very small. Because the expansion pace of Taihua Supermarket is too fast and fierce, and the supermarket does not rent the space, but buys or builds it by itself, the cost is much higher.
From a long-term perspective, buying or building one yourself is cost-effective, but it puts great pressure on supermarket funds.
Fortunately, they were able to get enough loans from the bank. Even without the Taihua Supermarket Group, they could get a large loan in their name.
Therefore, after operating for so many years, Taihua Supermarket has always been in a high-debt mode, but no bank will worry about them repaying the loan.
Not to mention that a company as big as Taihua Supermarket is here, let’s talk about those shareholders, who is not a rich man, who would default on their debts? Even any one of them can pay off the loan.
After so many years of rapid expansion, Taihua Supermarket Group has finally occupied all first- and second-tier cities, and the vast majority of third-tier cities. However, cities below fourth-tier and lower tiers are occupied by many local supermarket groups.
They now have two ways. One is to open near them and squeeze out the other party with a strong brand and more favorable prices. This method will injure the enemy by a thousand, and cause a loss of eight hundred to oneself, and will also reduce one's own profits. And after squeezing the other party out, if you raise prices, you will also lose some consumers.
The second simple way is to merge with those small supermarket groups and then expand at their original locations. The places chosen by those small supermarkets are also in good locations.
You can even retain the brands of those small supermarkets and run multiple brands together.
Also note that you cannot be accused of monopoly. It doesn't matter if you have a monopoly in fact, but if you use your monopoly position to squeeze out competitors, the fine will not be light.
Therefore, Taihua Supermarket plans to adopt the third method, which is to open at least one large supermarket in those third- and fourth-tier cities, not necessarily a super hypermarket.
Rely on the advantages of the brand, slowly attract customers, and do not do excessive promotions.
Just because the membership card and shopping card of Taihua Supermarket can be used nationwide, it is beyond the reach of other supermarkets.
Many people work hard in big cities, but their parents still live in small cities. The company issues a shopping card, and you can take it back to your parents.
And the bigger the brand, the higher the credibility, and others will think that your products are better and fresher. This is indeed the case. Taihua Supermarket’s fresh food has always been the industry standard.
Having its own picking garden, own transportation, and multiple deliveries every day can not only provide customers with fresher products, but also reduce the loss rate.
Taihua Supermarket is developing better and better, but problems have also arisen, but they are sweet troubles.
"Brother Feng, we have so much cash balance. Should we all share the dividends or do something as a partnership?"
Dividends are great. After investing for so long, I can finally see big profits. With the money, you can invest in something else.
Well, Fu Guangwei has long been interested in a luxury yacht, and this time he had the money to buy it.
"It's okay to share dividends, or to do something as a partnership. Have you asked other people for their opinions?" Feng Yu turned to look at Fu Guangzheng. It seemed that the two brothers had discussed this matter.
Fu Guangzheng nodded: "I have discussed it with the Li brothers, and they also want to ask you what you mean first."
"If I say I have no objection, what are your plans?" Feng Yu asked.
"Our cash share will exceed 30% this year, which is too high. My idea is to pay dividends, and we will pay dividends quarterly in the future, and then everyone will use the money to invest in other things, such as investing in stocks. That's good." Fu Guangzheng said.
Now that he has the help of his father-in-law, and the financial industry is picking up, and the stock market has entered a bull market, of course he wants to take advantage of the opportunity to make more money.
But the Li brothers don't think so. They themselves have relatively little financial investment, and their family loves industry. Now they don't need funds. They are also worried about how to invest the dividend money and what to invest.
Let's invest in real estate, which is what their family is best at. There seems to be a little lack of funds, and recently the mainland is regulating the real estate market. Many people say that real estate has gone cold.
So the Li brothers wanted to see what Feng Yu planned to invest in, and they wondered if they could take a share. They also have rich network resources and are willing to hand over power to people designated by Feng Yu. Anyway, Feng Yu has not cheated them once in these years.
"Distribute the dividends. It's good for everyone to invest in the stock market or anything else. But I have one request. Within one year, I want our Taihua Supermarket to continue to expand rapidly."
Fu Guangzheng frowned: "Why? This is not cost-effective at all and will increase our expenses a lot."
"Our Taihua Supermarket's financial model at this time will soon be restricted. I heard rumors from above that they are discussing that the payment period for retailers' goods should not exceed 60 days, because there have been too many lawsuits over the past two years regarding debts. It's over." Feng Yu was also a little helpless. Fortunately, Taihua Supermarket's period of rapid expansion was almost over and there was no delay.
Fu Guangwei found that his job was even more difficult. In the past, they settled every quarter, and some even settled every half a year, so that they had sufficient floating cash on their books.
Many of their new stores were opened with this money as revolving investment.
And if this limit is extended to sixty days, then their floating cash will be much lower. Fortunately, they don't need to expand so crazily. It is much cheaper to invest in a supermarket in third- and fourth-tier cities.
"By the way, there seem to be some restrictions, that is, entry fees are not allowed from suppliers, and fees are not allowed for any reason such as festivals, store celebrations, new store openings, etc." Feng Yu said after thinking for a while.
This time Fu Guangwei almost turned into a bitter man. Why did things completely change not long after he took office
If after he takes office, the supermarket's expansion slows down and profit growth and turnover growth decline severely, he, the chairman, will have no shame in continuing to do so.
Feng Yu had never thought before that the superiors would impose such restrictions. Fortunately, Lao Zhang notified him in advance and asked him to pay attention and not to be named.
In fact, this regulation is basically aimed at large retail companies such as Taihua Supermarket Group. It is obviously a proposal made by the supplier representatives during the meeting, and the above people still think it is feasible.
The ones that suffered the most damage here, second only to Taihua Supermarket, were probably Inter Milan and Su Nian.
"Make changes early. This is the last time we can have more floating cash. Within half a year, the settlement period must be controlled within two months. If this is not possible, the dividend distribution will be slowed down."
… (To be continued.)