---
title: "Can Snack Discount Stores 'Revolutionize' Convenience Stores?"
description: "Snack discount stores, as a force to be reckoned with, are growing rapidly and causing concern among traditional 'small but refined' formats like convenience stores. With chains like Snack Busy surpassing 3,000 stores, the anxiety deepens, but the future may see integration rather than outright replacement."
author: "阳子"
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published: "2023-07-04"
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# Can Snack Discount Stores 'Revolutionize' Convenience Stores?

> Snack discount stores, as a force to be reckoned with, are growing rapidly and causing concern among traditional 'small but refined' formats like convenience stores. With chains like Snack Busy surpassing 3,000 stores, the anxiety deepens, but the future may see integration rather than outright replacement.

Snack discount stores, as a force to be reckoned with, are growing rapidly and causing concern among traditional 'small but refined' formats like convenience stores. With the news that Snack Busy has surpassed 3,000 stores, this concern has deepened.
Indeed, looking at the current development trend, specialized stores represented by Snack Busy, Snack Youming, and Zhao Yiming Snacks are on the rise, accelerating their expansion:
On one hand, the number of stores and the pace of expansion have significantly increased; on the other hand, publicity moves such as announcing brand ambassadors have elevated brand awareness to new heights. Additionally, with multiple rounds of large-scale financing and other favorable factors, the 'wind' of snack discount stores is blowing further afield.
However, what triggers panic in convenience stores and other formats is not just the rise of new trends, but the fact that snack discount stores, which currently average 1,500 SKUs, are no longer limited to snacks. Many brands have expanded their boundaries to include daily necessities, instant foods, dairy products, and more. At the same time, snack discount stores leverage their community proximity advantage to meet consumers' immediate purchase needs.
From these points, snack discount stores and convenience stores seem to have a high degree of overlap in SKU composition and addressing user pain points, which inevitably raises concerns and doubts among industry insiders.
So, is the snack discount store a 'revolution' or an 'integration' for convenience stores?
**The Snack Discount Industry Is Advancing with Unstoppable Momentum**
Since 2020, traditional offline formats such as supermarkets and convenience stores have suffered significant customer loss, with market share further divided. At that time, affected by the pandemic, community stores within a 15-minute living circle became the main consumption venues. Most snack discount stores, located in these areas, leveraged their proximity advantage to absorb the market share lost by supermarkets and convenience stores.
Beyond the macro environment, another important reason for the rapid rise of the snack discount format is its three core competitiveness: **high cost-performance, low operating costs, and high operational efficiency**.
In recent years, consumers' consumption structures and concepts have become more mature, rational, and restrained, making them more price-sensitive. Taking Dove chocolate as an example, the price for 43g x 3 bars is about 17.7 yuan at Snack Busy, 24.9 yuan at premium snack collection stores, about 30.9 yuan at Lawson convenience stores, and 23.1 yuan at Yonghui Superstores. This shows that snack discount stores have a significant price advantage.
I have previously analyzed that the final retail price of snack discount stores is set at about 70% of that in supermarkets and specialty stores, mainly because brands adopt large-scale procurement and a zero-account-period model with cash on delivery, directly cooperating with upstream manufacturers. By bypassing intermediate distributor channels, they further reduce redundant operating costs such as **entry fees, display fees, and barcode fees**, thereby using more efficient and high-quality product selections to increase store visits, benefiting consumers while ensuring efficient turnover.
Looking at the entire snack discount industry, **the common approach is to accelerate store expansion after running a successful single-store model to improve profitability indicators.** After all, given the current market landscape, the industry is still in a rapid growth phase. Previously, Zhongtai Securities estimated that the future store space in the industry is conservatively 60,000-70,000 stores. Whoever can capture a larger market share is expected to become a leading brand.
I have learned that recently, Snack Busy just announced that its store count has surpassed 3,000. Overall, this brand added 1,000 new stores in the first half of the year, expanding at an average rate of 6 new stores per day. If this growth rate continues, by the end of 2023, Snack Busy's national store count could reach around 4,000.
Looking at the entire industry, Snack Youming, which is in the same track as Snack Busy, currently has over 1,500 stores, with an expansion rate of more than 200 stores per month. Another major player, Zhao Yiming Snacks, has reached 1,600 stores nationwide, with an average monthly expansion of over 300 stores.
In addition to the above emerging brand representatives, **traditional supermarket channels are also entering the snack discount format.** Recently, Wuhan's leading supermarket chain Zhongbai Warehouse Supermarket and Shandong's local supermarket leader Jiajiayue Supermarket have opened their own snack discount stores, accelerating their capture of the snack track dividend.
Another force closely watching the snack discount format is the old players with years of experience in leisure snack specialty operations, such as Liangpin Shop and Three Squirrels. As of now, Liangpin Shop's own bulk-sale brand 'Snack Player' has opened 5 stores in Wuhan, with store efficiency 50% better than Liangpin Shop. Recently, Three Squirrels also announced the simultaneous opening of its first 10 national snack stores, mainly in Anhui and Jiangsu.
I believe that while new forces are advancing together, traditional supermarkets, leisure snack brands, and other channels have also sensed the keen changes in the snack discount format and are beginning to compete for layout. Thanks to core supply chain advantages and full-category development capabilities, the latter may have stronger expansion advantages.
**Convenience Stores Face Hidden Worries**
With the promotion of the above players and capital, the snack discount industry is extremely 'fierce,' and there are even voices within the industry that it can 'replace' the convenience store format. In my view, this idea is not entirely unfounded.
On one hand, after years of channel evolution and industry iteration, snack discount stores have evolved from fragmentation to centralization and higher quality. For example, in-store product selection has gradually shifted to high-frequency combinations, incorporating products with higher consumption frequency such as beverages, dairy products, instant foods, and daily necessities, leading to higher customer visit frequency and longer purchase times.
A senior executive from a snack discount format said, **'Currently, 35% of the SKUs in our snack stores highly overlap with convenience stores, and we have a price advantage. For example, a bottle of mineral water sells for 2 yuan in convenience stores, but less than 1 yuan in snack discount stores. Consumers naturally prefer the latter, and after entering the store, it effectively drives sales of other products, causing a significant impact on the revenue of nearby convenience stores.'**
On the other hand, 80% of snack discount stores are located near communities, with an area of about 100-120 square meters, and they penetrate deeply into cities at all levels, with strong downward expansion capability, even covering townships. In terms of user characteristics, snack discount stores target different age groups such as family users, singles, and the elderly to ensure stable customer traffic, while also meeting consumers' immediate, spontaneous, and diverse purchase needs through geographical advantages.
As is well known, the rise of convenience stores was driven by the inconvenience of hypermarkets due to long distances, large store areas, and fixed product packaging, which led to poor shopping experiences. Therefore, the convenience store format, which solved the pain points of that time, met consumers' emergency needs, and operated efficiently, became a hot trend and aggressively captured market share from hypermarkets, causing frequent crises in old channels.
Up to now, **although convenience stores have not replaced hypermarkets, under the influence of their own drawbacks and the overall environment, hypermarkets seem to have become 'yesterday's flowers.'** According to CCFA's '2022 China Chain TOP100' list data, in the past year, over 50% of traditional hypermarket stores shrank and revenue declined. In contrast, more than half of convenience store companies accelerated store expansion, achieving double growth in both store count and sales.
From the above points, the current snack discount format seems to have certain similarities with the convenience store format that rose strongly before, and now convenience stores have evolved into the role of hypermarkets. Moreover, convenience stores and hypermarkets have completely different core competitiveness, while snack discount stores and convenience stores have high overlap in user groups, product composition, and store layout.
In addition, to create product features distinct from other track players, some snack discount brands have begun to consider adding categories that better meet people's livelihood needs, such as fresh produce and prepared dishes.
I believe this thinking stems from the general sense of crisis in the retail industry: the above-mentioned snack discount industry practitioners said, **'The snack discount format, like all retail formats, has a certain periodicity. It must self-iterate and update in time to go further and last longer.'**
Therefore, under the combined forces of rapid store expansion for national layout, capital financing empowerment, and the format's own pursuit of innovation, some voices in the industry believe that more diversified, convenient, and personalized snack discount stores 'replacing' convenience stores is not impossible.
**Not a Complete 'Revolution,' Future May See Integration**
However, in my view, only enterprises are eliminated, not formats. Therefore, **although snack discount stores have an impact on convenience stores, it is not a complete 'revolution,' nor will they be replaced. In the future, the two may present themselves to consumers in another form of integration.**
First, even if the two have many commonalities, there are still certain segmentation differences.
Let's look at the segmentation differences: most snack discount stores operate from around 10 a.m. to 9 p.m., while convenience stores have more flexible operating hours, which can be adjusted according to store type, but most are 24-hour, covering consumers' all-day shopping needs.
**From the user group perspective**, the target customer base of the snack discount format has more vertical needs, namely leisure experiences centered on room-temperature snacks. Although different categories have been added later, this user mindset is deeply rooted. Therefore, to some extent, an overly refined and precise format can also be a constraint for later transformation and upgrading.
**From the store type and layout perspective**, snack discount stores have a very single store format and are concentrated around communities. Convenience stores, on the other hand, can be divided into community, office building, airport, shopping center, and other types. Different stores make more precise, differentiated, and distinctive product selections based on the business district and surrounding user characteristics. For example, community stores increase the proportion of 'regular fresh food + prepared dishes,' while office building stores incorporate 'ready-to-drink + coffee' categories.
**From the SKU composition perspective**, in recent years, convenience stores have been gradually expanding their product boundaries. In addition to the original fast food, daily distribution food, and processed food, they have added a large number of private brand snacks, co-branded products, and more. Furthermore, since the rise of convenience stores, they have not been limited to single commodity services but have added more life functions, such as utility bill payment, photocopying, ATM services, and other segmented services, consolidating their competitiveness with humanized advantages. In this regard, **the snack discount format focuses on 'leisure,' and it seems unable to cater to deeper emotional needs.**
Second, convenience stores have not rested on their past glory but are striving to transform towards **professionalization, segmentation, and scenario-based experiences.** For example, Lawson has accelerated innovation and integration in recent years, selecting popular anime and game IPs loved by young people to create themed stores, changing the traditional old layout, and attracting more Gen Z consumers with a more novel, distinctive, and interesting image.
At the product update level, each category in the store must launch new products every week, with an average of 12%-15% of products changed monthly, and 130%-150% of products replaced within a year. With such extreme self-drive, Lawson has become the fastest-growing brand among Japanese convenience store chains in China, adding 1,175 net new stores in the past year.
Taking Lawson as an example, looking at the entire format, after years of deep cultivation and iteration, **convenience stores have already established a more stable, smooth, and solid supply chain advantage, ensuring high-frequency information exchange between stores and upstream production ends, ensuring rapid delivery of fresh food products, and providing users with continuously innovative high-quality products.**
At the same time, I noticed that when instant retail first emerged, the core advantages of the convenience store format were impacted. However, the latter responded quickly, promptly boarding this 'new elevator.' Taking 7-Eleven, Lawson, and FamilyMart as examples, many well-known convenience store brands have joined major food delivery platforms, effectively improving store operational efficiency through a 1+1>2 emerging integration method, and using this as a new engine to win more incremental space.
Finally, in terms of the current development landscape, the user mindset and market size of the convenience store format are difficult for the snack discount format to match. KPMG's '2023 China Convenience Store Development Report' points out that in 2022, the national convenience store market reached 383.4 billion yuan, with a year-on-year growth rate of 9.76%, and a store scale of 300,000 stores, of which brand chain stores numbered 187,000, with a growth rate of about 14.2%.
It can be said that in the past few years, **convenience stores have been a rare growth format in offline retail, and they are no longer limited to high-tier markets. More and more brands have adopted the same downward franchise strategy as the snack discount format.** I noticed that Lawson recently entered Dandong, Liaoning, opening 13 stores, accelerating its deep cultivation of second- and third-tier cities through flexible models such as regional authorization, close franchise, and master franchise.
Therefore, compared with the future store space of only 60,000-70,000 for the snack discount format, the convenience store format has an incomparable scale advantage.
But we must clearly recognize that **the retail industry will not be dominated by a single format, because no format can meet all the needs of all user segments.** In the future, different formats that are more professional, segmented, and precise will complement each other to better promote the healthy and positive development of the entire industry.
As Wu Minyi, chairman of Xinjiayi Convenience Store, expressed, **'Doing retail ultimately requires returning to the basics. While convenience stores think about what to do to meet consumers' high-frequency and high-timeliness needs, it is enough to do the basic categories well and understand the industry chain thoroughly in a professional store format.'**
Returning to the impact of snack discount stores on convenience stores, the former, full of vitality, is still evolving, and its influence should not be underestimated. The latter need not worry too much; focusing on their own path and seeking positive integration at certain points in time may be the most appropriate response.


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