Despite recent slow sales growth, market leaders are opening new supermarkets in areas where no warehouse stores are located. As a whole, warehouse stores are larger stores carrying a diversified range of products at cut-rate prices. While supermarkets carry a small range of non-food products, warehouse stores carry a much broader range of casual clothing, household consumer goods, automotive accessories and other products in addition to products normally purchased in a U.S. supermarket. There are about 50 department stores located throughout Taiwan but concentrated in the large cities. Such arrangements help department stores avoid risk and enable replacement of concessionaires recording poor sales.
Concessionaires are responsible for decorating and staffing their sales areas.
Although the department stores do purchase some merchandise on their own account, most of their sales are through the concessionaires. To compete against the lower priced bulk quantity selections available in warehouse stores, Taiwan department stores carry high-quality, upscale and expensive merchandise. This trend should continue. The introduction of computerized systems to track sales should help department stores in buying and inventory control to alleviate problems associated with the lack of merchandise selection. Because Taiwan consumers are very aware of customer service and atmosphere when shopping, department stores will continue to focus on distinguishing themselves through special design, decor, fashion shows, art exhibitions, VIP cards, in-store child care and food courts to attract their target market.