While Cheapmart has had a successful history in the United States and most West European nations, the company has faced some issues in Germany and Japan due to compliance issues with local legislation.
Cheapmart is known for providing low cost retail products and is popular with millions of consumers as a cheap alternative for day-to-day groceries. The company sources a major chunk of its products mostly from cheap producers especially in the Far East and South East Asia and relies immensely on sound management for providing quality products at the cheapest prices to its customers. The ability of ‘Cheapmart’ to offer products at highly competitive prices can be attributed directly to its rapid growth as well as a highly efficient logistics system that the company has established with suppliers across the globe enabling it to secure cheap and fresh goods. Cheapmart is also a source of employment with the local communities where it operates.
The Account history for Cheapmart has been sourced from its Annual report that provides information on various financial parameters such as Assets (A), Liabilities (D), Total shareholder Equity (E), Earnings before Interest and Taxes (EBIT) and the Interest payment (I). The overall financial performance of the company in terms of these variables during the financial year 2009 has been stated below.
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From an overall perspective, Cheapmart operates under three market conditions namely good, average and bad. The prospects of sales depend on per-capita consumer spending and the average consumption of a customer in kilos per year (since Cheapmart is primarily a grocery chain).
Financial risk: Alan Hippe, CEO of Continental, noted that the total