Photo: Xinhua

The COVID-19 pandemic has struck another business in China as OurHours, a domestic 24-hour chain convenience store and a rival to 7-Eleven, announced on Monday that it will close all its shops in Beijing by end of this month.

OurHours, which at its peak operated the largest shop fleet in the Chinese capital, also announced that it will close a large number of stores in the nearby Tianjin Municipality. 

Shanhai Lantu, the company that owns the chain's business, said on Monday that the pullout by May 20 was due to the outbreak having forced it to cut its retail business, but denied rumors that the closures were due to a broken cash chain, according to domestic news portal bjnews.com.cn.

OurHours operated 350 stores in Beijing in 2017, but has seen its number of shops dwindle to some 200. Per its announcement on Monday, it is selling its stocks at a discount and urging customers to refund their membership cards before May 21.

Chen Yuefeng, an industry observer with new media platform lingshouke, said the closures were probably down to the company's inability to operate successfully in Beijing, where operational costs are exorbitantly high due to soaring rents and cutthroat competition from rivals. 

The coronavirus outbreak has also disrupted supply chains and wiped out operating incomes for convenience stores. Chen estimated convenience stores, one of the sectors hardest hit by the pandemic, have only seen business return to 60-80 percent of previous figures. During the height of China's lockdowns, convenience stores in business districts saw almost no income.

Chen said that given the scale of OurHours, over 1,000 jobs are at risk due to its exit from Beijing, but actual losses could be smaller as many franchise stores may not cease operations and will instead change their company logos.  

China is steadily promoting the development of convenience stores and developing its night economy, with Beijing eyeing 3,000 stores by 2020. During the epidemic, some convenience stores located in residential areas were of great help to citizens under lockdowns.

Shanhai Lantu has been the owner of OurHours for less than a year. In an asset sale in February 2019, Japanese convenience store Lawson acquired nearly 100 OurHours branches in East China and the southwestern city of Chongqing. Shanhai Lantu acquired OurHours stores in Beijing and Tianjin.