While it is not very popular in China, stores should create more partnerships to better serve restaurant-goers and bring benefits to both food suppliers and store owners, said Ge Geping, chairwoman of the China Chain-Store & Franchise Association.

Ge said about 70 to 80 per cent of restaurants and hotels currently buy raw food materials and condiments from wholesale markets, some of which are suffering from bad marketing and loopholes in management.

"We should change this situation so that most raw food material will come from even safer market channels," Ge said.

Ge spoke at a one-day seminar on the future of warehouse retail stores in China. The seminar was organized by the Commerce Committee of the Beijing Municipal Government.

Warehouse retail stores are often located in suburban areas and provide lower prices and bulk buying. They are often at least 10,000 square metres in size.

In line with China's commitments to the World Trade Organization, the current retailing policy encourages both domestic and foreign investors to gradually expand this type of retail model across the nation, she continued.

China's first warehouse retail store opened in South China's Guangzhou in 1993 and China now has about 1,000 such stores, statistics show.

"But many of them are not very competitive," said Ma Ning, assistant director of the Commerce Committee of the Beijing Municipal Government.

"Strictly speaking, they are not warehouse stores because most of them only cover 2,000 to 3,000 square metres."

Beijing currently has 58 such stores but only four are 10,000 square metres or larger, Ma said.

Experts say foreign warehouse retailers in China such as the US-based Wal-Mart, France's Carrefour, Germany's Metro and the Netherlands' Macro, has helped set excellent examples for domestic retailers and policy-makers.

At yesterday's seminar, Macro, the creator of the warehouse store model and the first foreign retailing giant allowed into the Chinese market in 1996, announced that its branch stores will reach at least 30 across the country.

(China Daily November 21, 2002)