Source | Retail Circle Since around 1995, when foreign retailers entered China, for nearly 30 years, under the dual pressure of homogenized competition and online冲击, the transformation of traditional supermarkets has long ceased to be a "choice" and become a "survival issue." Since last year, adjustment and reform (调改) has become one of the directions for transformation. This year, the author visited many supermarkets across the country and found that many are moving from one homogenization to another. Nearly identical deli food processing, nearly identical bakery processing, nearly identical dining areas, and even private-label packaging are highly similar, like "white background with red lettering." The essence of this similarity will be the start of another "homogenized competition." Many supermarkets are climbing out of the traditional homogenization quagmire only to plunge into a new homogenization vortex. This kind of "same medicine, different packaging" transformation not only fails to solve the fundamental difficulties of industry development but may also accelerate elimination in the new round of competition, warranting deep reflection across the industry. Traditional Supermarkets: Multiple Shackles of the Homogenization Dilemma Before the wave of adjustment and reform, homogenization in China's supermarket industry was deeply entrenched, forming a rigid pattern of "a thousand stores with one face." This homogenization is not just similarity in a single dimension but systematic convergence across the entire chain—products, profitability, operations, and services—which is also the core reason the industry lacks flexibility and response capability when facing online e-commerce impact. Especially during the industry expansion period from 2010 to 2020, most supermarkets adopted a "scale wins" core logic, blindly replicating mature models to seize market share, further exacerbating homogenization. Product Homogenization: "Copy and Paste" on the Shelves The high overlap in product structure is the most直观 manifestation of homogenization in traditional supermarkets, even forming the peculiar phenomenon of "one shelf for all supermarkets nationwide." Research data shows that the overlap rate of core categories in national chain supermarkets exceeds 80%. Whether in chain supermarkets in first-tier cities or local stores in county markets, the core categories, brands, and even display methods on shelves are largely the same (I think everyone feels this). On cooking oil shelves, the three major brands—Arawana, Luhua, and Fulinmen—occupy over 70% of the share; in the dairy section, Yili and Mengniu products typically occupy over 60% of display space; the snack food area is monopolized by head brands like Master Kong, Uni-President, and Oreo, with niche specialty products accounting for less than 5%. This procurement logic of "I sell whatever everyone else sells" stems from supermarkets' over-reliance on national brands—head brands have mature channel systems and advertising capabilities, so supermarkets do not need to bear market education costs, and procurement risks are lower. At the same time, most supermarkets lack precise insight into regional consumer demand. More critically, the industry generally lacks awareness of cultivating differentiated products. To reduce procurement costs, small and medium supermarkets often directly copy the product lists of large chains, even replicating display positions. The high homogenization of products directly leads consumers to feel "it's the same wherever you shop," making price the only competitive lever, ultimately falling into a vicious cycle of "price cuts—profit shrinkage—service downgrade." Profit Model Homogenization: Path Dependence on "Slotting Fees" Against the backdrop of undifferentiated products, the profit models of traditional supermarkets are also highly convergent, generally falling into path dependence on "slotting fees," a model even called the "survival rule" in the industry. Slotting fees include entry fees, display fees, barcode fees, holiday promotion fees, DM flyer fees, and more than ten other types. In some supermarkets, slotting fee income accounts for as much as 40%-50%, far exceeding the profit contribution from product purchase-sale price differences. For example, in a regional chain supermarket, a new brand wanting to enter its system must pay an entry fee of 50,000 to 200,000 yuan, with an additional 10,000 to 30,000 yuan per month for prime display positions. The essence of this profit model is shifting operational pressure onto suppliers rather than achieving profit growth through optimizing supply chains, improving operational efficiency, and tapping consumer value. Under this logic, the core KPI of supermarket procurement departments is not "selecting quality products" but "negotiating higher slotting fees," causing quality but low-paying niche and innovative products to struggle to get shelf space, while homogenized products with strong payment capability occupy prime display positions for long periods, forming a vicious cycle of "bad money driving out good." More seriously, the slotting fee model directly distorts product pricing—suppliers must raise product prices to cover slotting costs, ultimately borne by consumers, putting traditional supermarkets at a disadvantage in price competition with online platforms. When all supermarkets adopt this profit model, it not only fails to create differentiated competitive advantages but also weakens the industry's ability to respond to consumer demand, failing to keep up with consumption upgrade trends. Decoration and Operations Homogenization: Undifferentiated Consumption Scenes The decoration style and operational models of traditional supermarkets have long been "one face for a thousand people," lacking personalized consumption scenes. In terms of decoration, almost all stores use a standardized layout of "harsh white lighting + metal shelves + category zoning," with highly uniform divisions of fresh food, groceries, and daily necessities. Apart from different signs and logos, consumers find it hard to visually distinguish between different supermarket brands. Even worse, many supermarkets have identical restrooms—smelly and unattended. The core demand of this decoration style is "maximizing space utilization" rather than "enhancing consumption experience," resulting in stores lacking warmth and memorable points. In terms of operational models, most supermarkets adopt a "large and comprehensive" format, pursuing maximum SKU count. A 10,000-square-meter supermarket often displays 30,000 to 50,000 SKUs but lacks deep development of core categories. Services are also lackluster; most supermarkets only provide basic cashier and return/exchange services. Sales assistants are mostly promotional staff dispatched by manufacturers, only responsible for promoting their own products, lacking guidance for overall consumer needs; value-added services like community interaction and customized services are almost nonexistent. This operational logic of "heavy sales, light experience" and "heavy scale, light quality" makes supermarkets mere "product stacking grounds" rather than "carriers of consumption experience," failing to meet consumers' growing emotional and experiential needs. Online e-commerce seized on this shortcoming, quickly capturing market share with "convenience + personalized recommendations," gradually eroding the traffic advantage of traditional supermarkets, which became the direct trigger for industry transformation. Adjustment and Reform: Falling from "Old Homogenization" into the "New Homogenization" Trap At the beginning of this year, when Retail Circle released its 2024 top ten keywords, "adjustment and reform" ranked first. When head supermarkets like Yonghui, Bubugao, and Wumart achieved performance recovery through adjustment and reform, the combination of "deli food processing + private label + staff wages + decoration upgrade" was hailed as the "bible" for transformation, and supermarkets nationwide quickly followed suit. Data from a retail consulting agency shows that among newly opened or adjusted supermarkets in 2024, over 90% set up deli food processing areas and bakery counters, over 75% launched private labels, and 80% adopted a "log-style + warm lighting" decoration style. However, this blind imitation lacking core substance has not truly solved the industry's fundamental problems; instead, it has quickly plunged the industry into a new homogenization dilemma, with the dividends of adjustment being rapidly diluted within just one to two years. Many supermarkets find that after investing millions in adjustment, customer traffic improves in the short term but returns to normal after three to six months, and profits even decline due to increased operating costs. This phenomenon of "peak after adjustment" is gradually becoming the industry norm. Current supermarket adjustments show obvious "path dependence," with almost all stores applying the same "new template," causing the "thousand stores, one face" phenomenon to resurface. In category adjustments, deli food processing areas uniformly set up windows for braised foods, cold dishes, and noodles; bakeries focus on basic items like bread, cakes, and cream puffs; even dish names and prices are highly similar. Some industry insiders have even emerged as "matchmakers" for deli food processing, "copying the entire supply chain" and exporting it to enterprises lacking supply chain development capabilities, further expanding the homogenization of deli food processing. Of course, we also see many innovative enterprises that have upgraded their deli food processing areas, such as Zheng Zhaofeng in Tangshan, Hebei, which has developed many private-label deli foods, and Chengshan Farm in Xi'an, which has developed differentiated deli stalls. Besides deli food processing, private labels are also a hard-hit area. Private label development itself is a means to break homogenization, but it is now falling into the "homogenization trap." On one hand, many supermarkets develop private labels for the sake of having private labels. Previously, everyone sold "Nongfu Spring, Coca-Cola, Genki Forest, and Guozishule," but now it has become OEM labeling from the same factory or a few factories. The shelves look full, but the manufacturers behind them are all the same. On the other hand, during visits, the author found that many enterprises' private label development even has identical "packaging." A simple "white background with red lettering" style has become the standard packaging for many supermarkets' private labels. Although it has a "big brand shadow," it inevitably causes some "aesthetic fatigue." In surveys, some supermarket owners admitted that private labels, due to poor sales, eventually became a burden of near-expiry and shrinkage, and using private labels as "gifts" has become a common way to dispose of near-expiry private label products. Some enterprises without private label development capabilities blindly purchase private label products from well-known companies, and some of these products also become a disaster area for near-expiry goods. Besides the high similarity and homogenization of deli food processing and private labels, decoration design is also a minefield of homogenization. A design company once stated that many supermarkets "copied" its design patent for a well-known chain and would pursue legal liability. A wave of decoration plagiarism is spreading in supermarket adjustments. Some wealthy retail enterprises even claim to "one-to-one copy" a well-known company, which is somewhat lamentable. Most supermarket adjustments remain at the level of "surface imitation," lacking the core capabilities to support differentiated development. This is the key reason for the new homogenization and the root of the "peak after adjustment" phenomenon. The lack of core capabilities is reflected in three levels: product R&D, supply chain, and service experience. In R&D, areas like deli food and bakery require high product innovation capability, but over 70% of small and medium supermarkets have not established independent R&D teams; instead, they directly copy head brands' product lists or even purchase semi-finished products from the same suppliers for simple processing. Private label development also lacks market research and technical investment, often being "OEM labeling," or even entrusting third-party companies to design packaging and find factories, with the enterprise only responsible for sales, resulting in uncompetitive products. This kind of "pseudo-innovation" adjustment not only fails to create competitive barriers but also increases operating costs through decoration investment, equipment procurement, and staff training, further compressing profit margins. Many supermarkets see their profit margins drop by 1-2 percentage points after adjustment. The competitive logic of traditional supermarkets is "price wars," and the new homogenization after adjustment has plunged the industry into a new dilemma of "homogenized involution," with competition intensifying. When all supermarkets focus on deli food, bakery, and private labels, and products, quality, and prices are highly similar, consumers' choice criteria return to price, forcing supermarkets to compete for traffic through price cuts and promotions, repeating the mistake of "low-price competition." Adjustment and Reform Is a Direction, Not Blind Copying Supermarket transformation has never been a simple "copy and paste" game but a systematic project of "precise insight + independent innovation." The author has seen many supermarkets gain new life through "adjustment and reform," which is commendable, but we have also seen many supermarkets fall into another homogenized competition trap due to improper methods, impure purposes, and wrong thinking, which is highly worthy of our vigilance. From the traditional "thousand stores, one face" to the new "thousand stores, one face" after adjustment, the industry's lessons profoundly prove that following trends and imitating can only gain short-term traffic; only differentiated innovation can win long-term survival. China's supermarket industry has entered the era of "stock competition," and we must avoid moving from one "homogenization" to another "homogenized" competition. For supermarket enterprises, the key to breaking the homogenization dilemma is to return to the essence of retail—centering on consumers and finding their own core advantages. Large chain enterprises can leverage scale advantages to deepen independent innovation and build full-chain competitiveness; regional brands should focus on local characteristics and become "guardians of local life"; community supermarkets need to deepen convenience services and become "residents' life stewards." At the same time, the industry needs to establish a concept of "diverse symbiosis," avoid blind trend-following, and encourage differentiated exploration. Looking across the country, besides the excellent Pangdonglai, Zheng Zhaofeng in Tangshan, Hebei, Happy Farm in Shenyang, Northeast, Yas in Yichang, Hubei, Tao Xiaopang, Huayu Baijia, and Xianfeng Life in Zhengzhou, Henan, and Farmer Liu Xiansheng in Yuncheng, Shanxi, and Chengshan Farm in Xi'an, Shaanxi, all have completed their own characteristic and differentiated development through learning. Of course, among foreign retailers, Sam's Club under Walmart and Germany's ALDI are still models for us to learn from. Let's see what they are learning in this round of development and what kind of localization they are adapting to. Sam's Club, through its online instant retail model with 500 "front warehouses and cloud warehouses," achieved nearly 50 billion yuan in incremental business in 2024, which is worth our consideration. ALDI, through "private labels," quickly established its corporate positioning and image, becoming the representative of "warm, affordable, and quality" supermarkets in Yu Donglai's mind, which is also worth our consideration. In the future, competition in the supermarket industry will no longer be "scale competition" or "price competition" but "characteristic competition," "value competition," and "trust competition." Only by truly basing on local conditions, focusing on demand, and strengthening innovation can the industry achieve a hundred flowers blooming, allowing supermarkets to return from "product stacking grounds" to "life service stations" and always occupy a place in the consumer market. We must still be vigilant that supermarkets do not move from one homogenization to another.