Carrefour's Shuangjing and Siyuanqiao stores are the last two remaining Carrefour supermarkets in Beijing. As of June 2, 2023, the Shuangjing store's business hours were adjusted to 10:00-19:00. It's hard to imagine a supermarket on Beijing's Third Ring Road closing at 7 PM. At 9:30 AM, the yellow fence outside the Shuangjing store was not yet open, but the "Shopping Card Consultation" desk, simply assembled from two tables, was already crowded with people, mostly elderly. The author observed on site that to buy 100 yuan worth of goods at Carrefour now, you can only use 20 yuan from your shopping card, and the remaining 80 yuan must be paid in cash or via mobile payment; additionally, you must first provide your name and phone number to complete Carrefour membership real-name verification, then wait 10 working days to check the review result at the cashier. After approval, each shopping card can be used to spend 500 yuan, valid for the current month.
Carrefour Beijing Shuangjing store shopping card consultation desk
"I came from far away, aren't you making things difficult for me?" When the staff finally appeared, Aunt Zhao learned that her Carrefour membership real-name verification, completed before July 20, could only be used to spend the shopping card within July. The heavy rain in Beijing in recent days made her miss the valid consumption period, so she had to re-register and wait ten days to come back to "clear the card." Facing her growing anger, the staff pointed to the "Friendly Reminder" posted on the table and said, "It's all written here." The spending limits, changes in shopping rules, increasingly empty shelves, and occasional rumors of closure have spread the Carrefour shopping card crisis among consumers. In recent years, crises such as executive departures, supply chain disruptions, being listed as "defaulters," layoffs, and store closures have occurred one after another. This is not the only turmoil Carrefour has experienced. In 1995, Carrefour entered China, riding the wave of economic takeoff, and at its peak had 321 stores. At the end of September 2019, Suning.com completed the acquisition of 80% of Carrefour China's shares, but this mutual effort failed to restore Carrefour's former glory. According to Suning.com's financial reports, in 2022, Carrefour closed 58 stores, and after closing another 31 stores in the first quarter of 2023, Carrefour China had only 114 stores left. This large supermarket chain, once the king of sales, is experiencing its darkest hour. It's not just Carrefour; traditional supermarket chains like Walmart are also struggling to survive. However, membership-based supermarkets like Sam's Club and Hema are intensifying their "price wars," while large supermarkets in third- and fourth-tier cities like Pangdonglai have quietly created a legend in the retail industry. Are those "traditional supermarkets" that missed the internet really saying goodbye to us?
Farewell to Beijing's Last Carrefour Stores
In Chaoyang District's Yiju South Road, Zhang Lan, nearly 70 years old, comes to the third floor of Siyuanqiao Shopping Center every week, first getting a massage at the health center, then dropping by the Carrefour across the way. Fruits, vegetables, and fresh produce are the sections Zhang Lan frequents. She picked up a bag of 300g shrimp priced at 99.99 yuan; at the small supermarket near her community, the same price could buy three bags of shrimp.
Zhang Lan's tone carried a hint of helplessness, but to completely use up the balance on her shopping card, she said, "It's like this now; no matter how expensive, you have to buy it."
In Beijing's last Carrefour stores, most shelves are empty, and few products remain. At the Shuangjing store, large bottles of laundry detergent are the first choice for "clearing cards," while chicken bouillon is piled up, almost untouched. The Siyuanqiao store is in the same situation, with products scattered on shelves, and the frozen section filled with various quick-frozen foods, becoming a forgotten corner.
Most shelves at Carrefour are empty
Incomplete stock and doubled prices have become the last straw for consumers.
"It's okay if I can only use 20% of the card; as long as the goods are complete and prices are reasonable, I can spend it slowly." That was Zhang Lan's thought, but the deterioration of Carrefour's Beijing operations far exceeded her expectations.
"It wasn't until I realized they were clearing out goods that I knew I had been fooled by this illusion." Zhang Lan had firmly believed Carrefour wouldn't close, and when she saw staff organizing shelves, she still held hope that Carrefour would "make a comeback."
But when Zhang Lan learned that the Tiantongyuan store had closed, she "completely gave up," so she came to the Shuangjing store again, buying a few bowls, a teapot, and some batteries to make up the amount to clear her card.
Carrefour, once called the "Whampoa Military Academy" of retail, has lost its glory in the changing tides of the times, not only facing closure rumors but also dismal revenue figures.
What has Carrefour experienced in the past decade?
From 1995 to 2007, in the first decade-plus of Carrefour's entry into China, it seized a high position among supermarkets like RT-Mart, Metro, and Walmart.
However, at this time, Carrefour, which had taken the top spot in foreign retail, made a series of wrong decisions that intensified conflicts with suppliers, led to the departure of core talent, and inappropriate expansion, planting the seeds for its later decline.
In 2010, Master Kong cut off supplies to Carrefour, starting a tug-of-war in the supplier-retailer relationship, which was just a microcosm of the contradictions between Carrefour and its suppliers.
From early competition in fresh produce, unlike Yonghui, which opened up fresh procurement channels, or Walmart, which set up national distribution centers, Carrefour uniquely chose to "lie flat." Later, when e-commerce rose, Carrefour's neglect of its supply chain system prevented it from seizing new opportunities.
Public information shows: In 2017 and 2018, Carrefour China's net profits were -1.099 billion yuan and -578 million yuan, respectively. At the end of 2018, Carrefour China had assets worth 11.5 billion yuan and liabilities of 13.8 billion yuan. In 2019, Suning.com spent 4.8 billion yuan to acquire 80% of Carrefour China's shares, and the Carrefour Group officially withdrew from the mainland China market.
At the beginning of 2023, Carrefour China's COO Zhang Qizhe resigned, many stores nationwide were closed, and issues such as layoffs and unpaid compensation were exposed. All this seemed to have already written the prelude to Carrefour's farewell to the Chinese market.
Turning the clock back to 1995, near the China International Exhibition Center, Carrefour's Chuangyijia store opened in Beijing, its first store in mainland China.
At that time, "food stamps" had just exited China's historical stage. In Carrefour's hypermarket, the clean environment, enthusiastic salespeople, and ultra-low prices each brought a great impact to people.
Times have changed. In today's Carrefour hypermarket, selecting goods is not done at neatly arranged counters, but by picking through scattered corners and rummaging through shelves closest to the cashier.
A large supermarket chain like Carrefour has thus exited without dignity, amid chaos and regret.
Inside Carrefour Beijing Siyuanqiao store
Regarding whether the last two Carrefour stores in Beijing will close, a staff member at the Shuangjing store said, "We'll close when everything is sold out." But a cashier at the Siyuanqiao store said they had not yet received notice.
When a Meituan rider hurried to the Siyuanqiao store, he was told by staff at the only open checkout channel, "We're out of stock; we can't deliver." The rider looked bewildered; he and the consumer behind the phone screen clearly didn't know Carrefour had become like this.
Traditional supermarkets, waiting for the instant retail trend
In 2015, China's hypermarket format experienced its first "negative growth," and perhaps the gears of fate had already begun to turn then. The wave of closures and transformations of traditional supermarkets has lasted nearly a decade.
Carrefour is not the only troubled hypermarket; Walmart, Aeon, RT-Mart, and others are also mired in difficulties. Carrefour's current situation is more like a microcosm of the entire traditional supermarket industry. Public data shows that in the past three years, Walmart has closed more than 60 stores in China, and Yonghui Superstores has closed nearly 400 stores.
In these years when various new consumption models have emerged, traditional supermarkets have also been struggling to save themselves and explore new growth spaces.
First, the rise of e-commerce completely changed the retail industry, and traditional supermarkets faced the issue of online-offline integration. Initially, most hypermarkets chose to cooperate with mature e-commerce platforms, such as Walmart joining forces with JD.com, Metro entering Tmall Global, and RT-Mart connecting with Gome Online.
However, e-commerce transformation did not become a cure for hypermarkets. Large offline physical supermarkets attacking online channels inherently has a contradictory nature. The more prosperous online sales are, the weaker offline physical stores become. Moreover, the actual costs of offline supermarkets, such as rent, labor, and utilities, have become a "drag" on transformation, making store closures inevitable.
According to data from the 2022 China Online Retail Market Development Report, online retail sales in 2022 were 13.7853 trillion yuan, accounting for 29.8% of total retail sales of consumer goods, with offline retail accounting for over 70%. Even though online retail growth is higher than the overall level, offline remains the main battlefield for national consumption.
Second, paid membership has become a new battlefield in the retail industry, with major players joining in, starting a new round of competition for middle-class consumers.
In fact, the first foreign retail giant to start membership in China was Walmart. In 1996, Walmart opened its first membership store in China, Shenzhen Sam's Club. But in the following decade, the hypermarket format was the most popular, and warehouse membership supermarkets didn't make much of a splash.
Now, Sam's Club has finally waited for the windfall of new middle-class consumption upgrades, and at the same time, it faces the crazy involution of membership supermarkets.
According to QuestMobile's "2022 New Middle-Class Report," as of July 2022, the proportion of new middle-class people online rose to 13.7%, with a user scale of 163 million, a year-on-year increase of 15.6%. The relatively financially free new middle class is more willing to pay for high-quality products, becoming the main force of consumption upgrades.
Compared to ordinary hypermarkets, membership supermarkets like Sam's Club first create a paid membership threshold, then promote the slogan "Dedicated to serving members, providing high-quality products for elite life." Sam's Club not only gives the middle class a symbol of identity but, more importantly, offers the advantage of fewer but better categories.
According to public data, hypermarkets typically have 20,000 SKUs, ordinary supermarkets have 10,000, while Sam's Club has only 4,000. Streamlining SKUs actually provides consumers with more vertical choices and helps reduce supply chain pressure, thus continuously offering high-quality products.
Sam's Club store (Image from Walmart China official website)
The crowdedness of the membership store track can be glimpsed from the price war between Hema and Sam's Club over a durian cake. When traditional hypermarkets are collapsing, winning the hearts of the middle class with high-quality products is indeed a viable path, but it cannot be the only way to save traditional supermarkets.
Carrefour also attempted to transform into membership stores. In October 2021, Carrefour's first membership store opened on Chengshan Road in Shanghai, officially entering the membership competition.
However, at the beginning of its opening, Carrefour apologized for a large number of out-of-stock items after its competitors imposed "choose one of two" rules on suppliers. In April 2023, Carrefour quietly closed this first membership supermarket. The membership store, once seen as a lifeline by Carrefour, ultimately failed to save it.
Do we still need traditional supermarkets?
Looking back, do we really no longer need "civilian supermarkets" like Carrefour?
Traditional supermarkets have many elderly consumers who trust the quality of supermarkets more than farmers' markets. For this generation, if they can catch a discount and buy something a bit cheaper, it's a "happy" thing for them.
Zhang Lan's husband doesn't eat meat, only fish, so Zhang Lan and her husband pay special attention to the fish in supermarkets. They originally thought the fish at RT-Mart was the best, but after her husband spent over fifty yuan to buy six small fish of unclear species a few days ago, Zhang Lan was disappointed with RT-Mart again.
As a regular customer, Zhang Lan can clearly feel that the quality of goods in traditional hypermarkets is declining.
Zhang Lan lives near Anhuaqiao on North Third Ring Middle Road, next to Anhua Commercial Building, which houses Hualian Life Supermarket. "After dinner, we go for a stroll in the mall; if there's something suitable, we buy it; if not, we just get some fresh air." But since Anhua Commercial Building stopped operating, she hasn't set foot in a store or bought a piece of clothing: "First, because I've lost the spirit; second, because the department stores are all gone."
Retired elderly people shopping together in supermarkets and malls, to some extent, constitutes their lifestyle. Now the exit of traditional supermarkets leaves them with nowhere to go. While giants are scrambling to harvest the middle class, they have forgotten these people who need civilian shopping venues.
But this also indirectly shows that Carrefour supermarkets, once the "middle-class symbol" twenty years ago, are facing the problem of aging users: the change in young people's consumption habits has turned the pastime of supermarket shopping into a thing of the past.
They rarely compare prices between offline large supermarkets and online supermarkets; they care more about whether delivery to home is possible and time-saving. The way of stocking up has changed, and surrounded by instant retail and 24-hour convenience stores, young people are less likely to choose large supermarkets for just one or two items.
Those middle-aged and elderly people who are proficient in using smartphones are also "fleeing" traditional supermarkets. For example, the emergence of community group buying, because it eliminates huge costs like rent, utilities, and labor, has wiped out the low-price advantage brought by the supply chains of large supermarkets. Consumers seeking value have decisively embraced community group buying.
"If community group buying continues for another year or two, I say supermarkets over 500 square meters basically have no future." In 2020, Ye Guofu, founder and CEO of Miniso, made this prediction.
It seemed unlikely at the time, because even in 2020, Carrefour was profitable. But the tide of the times is fierce, and no enterprise can ultimately resist the direction of the current.