The snack retail sector is experiencing the typical internet playbook—aggressive store openings, cash-burning expansion, and mergers and acquisitions. In some regions, many snack stores have begun competing to "seize territory" and "capture customers." During a recent market visit in Shandong, the author discovered two snack stores engaged in a price war, truly pushing competition to new heights.

24-Hour Operation, 55% Discount Price War

"Enemies always meet on a narrow road"—the two snack stores are on the same street, separated by a few restaurants and a community supermarket. One is located at the southern corner, while the other sits in a street-facing shop on the north side.

The author first visited the corner store. On the street-facing windows, the store had posted a prominent "55% off" discount poster.

According to current site-selection logic for snack stores, corner locations are always the prime spots. First, they offer large floor space; second, they provide more street-facing exposure, visible from both streets.

To the right of the entrance, empty cardboard boxes from restocking were piled up, while the left side was stacked with boxes of beverages and beer for sale.

Inside, the checkout line snaked in an S-shape, weaving through the bulk-food shelves. On the open space to the right, shopping baskets filled with snacks were scattered on the floor; a staff member said these were left by customers who couldn't wait to check out.

The shelves were sparsely stocked, with bestsellers mostly empty. A staff member restocking nearby said, "These items are out of stock; it'll take a day or two for new shipments to arrive."

During the conversation, the author noticed the staff member had severe dark circles under her eyes, as if she hadn't rested properly in a long time. When asked what time the store closed, she revealed that for the past month, they had been open 24 hours a day, never closing.

"Many customers wait by the delivery trucks in the early morning and buy directly by the case. It's usually past midnight before the store empties out."

Besides regular consumers stocking up, there were even small shop owners coming to buy inventory.

"Many of these items aren't discounted," a customer complained.

Although the price war started with 55% discounts, not everything in the store was 55% off. To maintain gross margins, items with tags reading "This product is not eligible for discount" were excluded from the promotion.

The other snack store was relatively smaller but equally packed. The store manager stood by the checkout counter near the entrance; while waiting to pay, the author struck up a conversation with him.

When asked when the promotion would end, the manager smiled wryly and said, "We'll probably stop when the store next door stops its promotion."

Compared to the first store's walls covered with 55% off posters, the second store's banner had a "55% off" sticker pasted over the original "88% off" from its opening. Clearly, this snack store was forced into the price war.

The two snack stores are locked in fierce battle, consumers are happily stocking up, but the surrounding businesses are "suffering terribly."

The Suffering Community Supermarket and Convenience Store

Between the snack stores is a community supermarket, and directly across the street is a local chain convenience store. The snack store price war has undoubtedly hit these two the hardest.

"They've been running promotions since they opened and never stopped. Opening events, member days, and in the last month, they've been doing 55% off. Apart from these vegetables, nothing else sells for me," the supermarket owner complained.

This supermarket isn't large; its sign reads "Group Purchase Wholesale Supermarket," clearly a remnant of the previous community group-buying wave.

Despite its size, it also has a snack section and bulk-food area. Compared to the empty shelves at the snack stores, this supermarket's standard product shelves and bulk areas are fully stocked.

"The price war on both sides is so intense—why haven't you considered joining?" the author asked.

The owner smiled wryly and said, "Fighting them isn't a long-term solution. They have brand support (snack store systems) behind them; we don't. This kind of 'hurting the enemy 800 to lose 1,000 ourselves' isn't something we can do."

Across the street, there's also a convenience store, equally deserted.

Compared to the bustling snack stores across the way, the state of these two stores perfectly illustrates the saying—"Convenience stores can't sell, snack stores don't make money."

The author chatted with a convenience store clerk, who said, "Since those two snack stores opened, we've been struggling. Apart from cigarettes and prepared food, nothing else sells. Last month, we ran a spend-and-reduce promotion, but it didn't help; foot traffic is still pitifully low."

Crucially, the snack stores, like convenience stores, are open 24 hours a day.

"In the month they opened, they kept regular hours and just ran discounts and events. In the last month or two, it's escalated—they're now open 24 hours, lit up all night. It's too competitive," the convenience store clerk said.

To see what happens at the snack stores in the early morning, the author returned at 3 a.m.

No new stock had arrived; two staff members were squatting on the floor, sorting through items from the abandoned shopping baskets, reclassifying and restocking them.

Compared to the brightly lit snack stores, the convenience store indeed seemed "dim."

Convenience store prices are roughly 44%–85% higher than snack stores, and under this intense price war, prices could rise another 10%–15%. Already at a disadvantage, convenience stores are even more at a loss.

Snack stores have grown thanks to price advantages, but this kind of mutual price-cutting is likely an extreme case.

Relying solely on low prices is unsustainable, and the snack store industry is well aware of this, so everyone is seeking alternative paths.

Head-to-Head Battle at the Top; Other Players Seek "Alternative Routes"

Currently, the snack retail sector presents a "two giants, many strong players" landscape.

As of June this year, Mingming Henmang's national store count surpassed 10,000, making it the first snack chain to reach the 10,000-store milestone; Wanchen Group's Haoxianglai ranked second with 6,638 stores.

The leading snack stores are accelerating and competing fiercely; to avoid being left behind, other players are exploring different strategies.

  • At the end of September, Snack Youming officially announced its entry into the "wholesale supermarket" format, opening 189 stores simultaneously during the National Day holiday;
  • Snack Youxuan's brand Huizhen Wholesale Supermarket opened;
  • Qiahuopuzi is transforming into a discount supermarket by expanding categories like grains, oils, rice, and flour;
  • On October 28, Three Squirrels acquired Ai Snacks and Ai Discount, embracing a listed company to break the "two giants" deadlock;
  • Ai Snacks Hard Discount Supermarket opened franchising.
  • ......

A price war they "can't win" and subsidies they "can't match" make it even harder for other players in the snack sector. Mid-tier players are being forced to transform and find new ways to survive.

As one segment "dismembering" traditional hypermarkets, hard discount snack stores occupy a relatively awkward position.

In traditional hypermarkets, snacks have never been a high-frequency purchase. Even with today's snack stores, consumers rarely repurchase more than twice a month; most only stock up when there are promotions.

Supermarkets have far higher purchase frequency and category diversity than snack stores. Daily necessities are mostly essential, and consumers have a stronger demand for value.

Since hard discount snack stores began their expansion, there has been much skepticism. But regardless, they have carved out a place in the retail industry.

The current problem with snack stores is that while they've solved supply chain efficiency, product differentiation remains weak.

Therefore, for some snack players, multi-category operations might be a viable path. However, achieving extreme cost-effectiveness in other categories will be a major challenge.

There are already pioneers on this path. For example, Leerle, founded in 2011, now has over 7,200 stores. In 2023 alone, Leerle opened more than 1,000 new stores, with annual sales exceeding 40 billion yuan, and the highest single-store annual revenue reaching 1.176 billion yuan.

Going forward, two points are worth watching in the snack discount store sector:

First, how leading chain systems leverage vertical integration of the industry chain to drive product differentiation.

Second, how regional systems transitioning from vertical categories to multi-category discount and wholesale supermarkets will compete.

The snack store war is far from over; the second half is just beginning. We will continue to follow and report promptly.