"Don't worry too much about money. It will be much better next year." Chen Zhiwen paused and said.
"That's good. I'm planning to go to New York after Christmas to select a location. If I can't keep up with the funds, I'll hold off for a while," Pierce said.
"No, the store opening plan on the east coast is proceeding as normal." Chen Zhiwen said.
This year may be the most difficult year for the operations of so many of his companies. The main reasons are Hutchison's acquisition, privatization and its huge debt problem. When Hong Kong real estate prices rise next year and Hutchison Whampoa loses weight, other companies' Financial pressure will be relaxed.
Red Bull will also begin to strategically capture the European market next year, and Wal-Mart's stock will continue to rise, which will allow this year's mortgage debt ratio to begin to ease and release some credit loans.
Other types of investments are considered small investments. Even if they cost more, they won’t cost much. In other words, the main focus next year must be Costco’s expansion, especially the expansion plan on the East Coast. You need to know , the main wealth and economy of the United States are on the East Coast.
"Actually, it's better to slow down a bit. We are expanding too fast. Even if you have no problem with the funds, my staffing may not be able to keep up." After hesitating for a moment, Pierce said.
"Didn't we spend a lot of money on talent expansion and training before? Can't we keep up with our expansion speed?" Chen Zhiwen asked with a frown. As early as a year ago, Pierce said that the quantity and quality of the company's team would not be able to keep up. Therefore, he specially allocated two million US dollars to hire a large number of experienced people from his supermarket counterparts, from the most ordinary salespersons to middle-level managers to branch executives, as long as they have experience and ability. To this end, the current more than a dozen Costco stores on the West Coast have been deliberately maintained with operating personnel far exceeding actual needs. This is to ensure that when a new store opens, enough people can be mobilized to go there. Another one can also start from here. Select future store managers, branch executives, etc. among the batch of people.
"It's a waste, this is the West Coast, and the East Coast needs to train a new group of talents. In addition, considering the supply chain problem, it is not necessarily possible for items from suppliers on the West Coast to be sent to the East Coast. It’s a good deal, so we also need to select the right suppliers on the East Coast, and this time may be about the same as cultivating relevant talents,” Pierce said.
"So, are you planning to slowly expand on the east coast?" Chen Zhiwen also understood what Pierce meant.
The east and west coasts of the United States are far apart. If only nearby cities, or even nearby states, are called by the company or given more benefits, many people will naturally be willing to go to the new store, and this may also be their opportunity.
But if you go to the east coast, thousands of kilometers away, this will make many people hesitate. Maybe you can find a group of people who are willing to go, but the number will definitely not be as high as building branches on the west coast, so you need to focus on the east coast as well. , slowly expand, and at the same time cultivate relevant talents locally.
As for suppliers, it is true that some suppliers here may not be suitable for the east coast. Fortunately, trading companies in Hong Kong will not be greatly affected. They just need to change the port to land, because the distance has become longer. It may only cost more freight, but many industries in the United States use trucks for transportation. Even if there are trains, multiple transportations are required. In addition, there is no way to unify transportation, and logistics costs will seriously increase.
"Yes, now that I have the foundation on the West Coast, give me a year and I will open about 3-4 Costcos on the East Coast. I also need to sum up the experience there. Maybe it will be different from the West Coast. If everything goes well If so, we can start building more branches in the year after next." Pierce analyzed.
"Okay, you said so. Of course I agree." Chen Zhiwen nodded and said. Expanding too fast is indeed not good for the company's future. Since there is a shortage of talents due to the distance between the east and west coasts, it might as well stop. For a period of time, Costco can sort out its problems, find its shortcomings, cultivate more talents, find more suitable suppliers, etc.
Although the funds Chen Zhiwen gave to Costco in the past two years were not very large, compared to ordinary supermarket chains, it was enough. Compared with the early development of Wal-Mart, which took ten years to expand, it was still heavily in debt. The investment that should be spent had to be postponed due to funding problems. It was not until a large amount of funds were obtained after the listing that things improved. Although Costco is a warehouse supermarket, the nature of its operations is similar. Chen Zhiwen's support in all aspects is equivalent to letting Costco I skipped the most difficult years in the past and never had to worry about financial problems.
"Mainly on the east coast. I have never operated there. Many people's shopping habits may be different from those on the west coast. It is better to be cautious. However, the west coast can still continue to expand. We must first win A few nearby states, making the entire West Coast our turf,” Pierce said with a laugh.
"Of course that's good, but don't worry too much. In the short term, no one will invest in our industry." Chen Zhiwen said with a smile.
In its original history, Costco was the first warehouse-type supermarket in a broad sense, established in 1976, and the second was Sam's Club under Wal-Mart, established in 1983. During this period, except for the discerning Sam Walton, a potential star that no one else has discovered.
Although Sam Walton discovered Costco earlier, Chen Zhiwen, as the major shareholder of Wal-Mart, also roughly knows Wal-Mart's financial situation. All funds are tightly used for Wal-Mart's expansion, and there is no room for entry. In the unfamiliar field of warehouse supermarkets, no matter how optimistic Walton is about this market, he has no ability to develop it. Besides, even though he is optimistic about the market, there is no guarantee that it will exceed the current development speed of Wal-Mart.
Maybe it will be possible to wait another six or seven years until Wal-Mart has developed enough funds, but at that time Costco will naturally gain a foothold in its own field. When all the megacities in the United States are occupied by Costco At that time, after acquiring a large number of local city members, it would be very difficult for anyone to defeat Costco in the same field.
Let’s not talk about whether the cost can be compared with Costco. The proportion of people in a city who are willing to spend money to buy membership is not very high. And they have been developed as members by Costco, and their shopping habits have been changed. Training, other supermarkets of the same type want to steal people? Even in the Internet age, it is difficult to do this.
But there is another possibility, because Costco is developing very fast now. Although the financial situation has not been disclosed, it may attract some people's attention. But if non-professionals want to beat Costco, which is already on track, then The possibility is better to wait a few years before challenging your own Walmart.
"Then I can also experience the dominance of Celtic Supermarket." Pierce said with a smile.
Chen Zhiwen nodded and said: "Yes, sooner or later, we will become one of the overlords of the US retail business. However, due to the limitations of warehouse supermarkets, we cannot build so many in total scale. Can’t compare to ordinary supermarkets.”
"It's great to be one of them, I'm very satisfied," Pierce said.
Chen Zhiwen shrugged and said, "No, no one will. Everyone has something to pursue. When we get to that position, we will pursue more."
"Hahaha, maybe, but that was also your era, boss. My biggest pursuit is to open Costco in every big city in the United States." Pierce said with a smile.
"Then you will also become a super rich man in the United States." Chen Zhiwen said with a smile. When he bought Fedmart from Pierce's team and hired them back to become Costco's management, he promised that the entire team would get a certain share of the stock. Now, as more than two years have passed, Costco is developing smoothly, and the Pierce team has obtained 4% of the shares as promised.
However, in order to develop, Chen Zhiwen needs to inject capital multiple times, which will dilute their share ratio. As of today, the entire Pierce team still has 2.69% of the shares. Although it does not seem like much, if Costco is listed in the future, these shares can be Easily converted into tons of USD cash.
"Choosing to follow you, boss, may be the most correct path in my life." Pierce said with a smile. Following Chen Zhiwen, not only did he gain huge wealth, but he also controlled a star supermarket with such great potential, which for countless people , is unimaginable.
"The most correct choice for each other." Chen Zhiwen nodded and said. Without Pierce's team, even if Chen Zhiwen is based in the United States, he will not be able to build Costco. If this is the case, he can only focus on acquiring Wal-Mart stocks, or acquiring shares in supermarkets in Europe.
Unfortunately, several future retail giants in Europe developed earlier than Wal-Mart and are larger than Wal-Mart. However, their future potential is far less than Wal-Mart. Therefore, when there was insufficient funds at the time, they would naturally not choose them. But now that my own funds are They are relatively precious, and I would not choose to spend them on them. Maybe I will consider this matter after 80 years.
Pierce continued: "Eric, for the development plan on the East Coast, I plan to build a branch in New York first. The area should be large enough, even bigger than the one in Los Angeles. Let the New York branch become our Costco store name. Storefront.”
"Okay, you can handle this kind of thing yourself. New York's economy is much stronger than that of Los Angeles. It is also suitable for building a large supermarket. There are more parking spaces and so on. Now there are more funds, more people, and more experience than before. If there are more, we need to prepare a larger branch." Chen Zhiwen naturally agreed with this idea.
"Then when the architectural drawings come out, I will send them to you by air." Pierce nodded and said.
When Costco expanded in the past, it was always based on convenience. Sometimes it would just take a fancy to a warehouse, buy it directly, and then renovate it. This is different now. They are basically self-made and have a unified architectural style.
"How far is the new logistics center from here?" Chen Zhiwen asked.
"It's not very far, almost 20 miles, but it was just bought there and it's still a wasteland. Eric, do you want to take a look?" Pierce asked.
"Let's go and have a look. It's okay anyway." Chen Zhiwen said with a smile.
(End of chapter)
