Research on the leverage effect of the retail chains in China

Abstract

With the development of market economy in China and the rising incomes of people, the level of consumption is continuously upgrading. Meanwhile, the chain retailing industry which is closely linked to people’s daily life is developing rapidly. All these factors lead to the transformation of economic structure of China. Since the foreign retail enterprises, like wal-mart, Carrefour, and Metro, entering into China, the local chain retailing industry in China is facing more severe pressure due to the competition. In this situation, this paper will compare and analyze the differences between local retail chains and foreign retailing enterprises using the financial and operating leverage indicators .This paper will also put forward some feasible suggestions.