IGA ADDS 35 CHINA UNITS TO ASIA BASE

JENNIFER L. BALJKO

CHICAGO -- IGA here has broadened its Asian base with an additional 35 stores in China.

The stores, ranging from 1,000 to 6,000 square feet, opened early this month throughout China's Southern provinces, spokesman Kevin Burkum told SN. Though smaller than traditional U.S. supermarkets, the stores -- combined with the 27 IGA units already operating in the area -- are expected to generate annual sales totaling $100 million, up from last year's $9 million, according to IGA.

"The stores generate tremendous volume because of the amount of foot traffic they see and the population density surrounding the stores," Burkum explained.

IGA, a voluntary network of independent operators, is building up its presence in the Chinese market with various partners. To open the new stores, the alliance teamed up with leading Chinese chain retailers and wholesalers, such as China Resources Corp., Your Ground Chain Store, Meijia Supermarket Corp. and Tien Mei.

Under the arrangement, IGA will offer its food distribution expertise and employee training programs. The retailers will pay IGA a licensing fee and use the IGA logo on their signs.

The 35 new stores are part of IGA's larger expansion plan for China. The alliance reported that it plans to open about 100 more stores within the next three years.

IGA said it has not insisted on a minimum size for its China stores, since some locations must be small because they serve congested urban areas with scant available retail space.

The tight store space in such locations is maximized through modern shelf management and product merchandising techniques, IGA explained. It also noted that its Chinese retailers recently completed their first promotion involving coupon booklets -- a new concept for Chinese consumers.

Besides locations in China, IGA stores are in Japan, Indonesia, Singapore, Malaysia and Korea. Globally, IGA has 3,600 stores in 22 nations, with total sales of $16.8 billion annually.

Another big international supermarket operator -- Ahold, Zaandam, the Netherlands -- announced in October that it has entered a joint-venture agreement to open 15 units under the Tops banner in the Shanghai area next year.