---
title: "Hard Discount Trend Emerges, Mom-and-Pop Stores in a Panic"
description: "Recent market research reveals that hard discount stores, combining low prices with a community-based model, are rapidly capturing the southern market. Snack-focused hard discounters like Snacks Busy and Snacks Youming are expanding at an accelerated pace, while hard discount supermarket chains such as Tiaoma and Discount Niu are also competing fiercely, causing distress for local terminal stores. For example, a cup of Tangdaren instant noodles sells for 6 yuan in traditional distribution stores but only 4.9 yuan here; a 550ml bottle of Nongfu Spring water sells for 2 yuan in traditional stores but at half price here. Historically, various retail formats in communities, such as chain convenience stores and mom-and-pop shops, have coexisted with competition but maintained a balance. However, the arrival of community hard discount stores has disrupted this equilibrium."
author: "赵胜男"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-08-17"
language: "en"
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---

# Hard Discount Trend Emerges, Mom-and-Pop Stores in a Panic

> Recent market research reveals that hard discount stores, combining low prices with a community-based model, are rapidly capturing the southern market. Snack-focused hard discounters like Snacks Busy and Snacks Youming are expanding at an accelerated pace, while hard discount supermarket chains such as Tiaoma and Discount Niu are also competing fiercely, causing distress for local terminal stores. For example, a cup of Tangdaren instant noodles sells for 6 yuan in traditional distribution stores but only 4.9 yuan here; a 550ml bottle of Nongfu Spring water sells for 2 yuan in traditional stores but at half price here. Historically, various retail formats in communities, such as chain convenience stores and mom-and-pop shops, have coexisted with competition but maintained a balance. However, the arrival of community hard discount stores has disrupted this equilibrium.

Recently, during market research, I observed that hard discount stores, characterized by low prices and a community focus, are rapidly capturing the southern market. Snack hard discounters like Snacks Busy and Snacks Youming seem to have hit the accelerator, while hard discount supermarket chains such as Tiaoma and Discount Niu are also competing fiercely, causing significant distress for local terminal stores.

**A cup of Tangdaren instant noodles sells for 6 yuan in traditional distribution stores, but here it's only 4.9 yuan; a 550ml bottle of Nongfu Spring water sells for 2 yuan in traditional stores, but here it's half price.**

Historically, various retail formats within communities, such as chain convenience stores and mom-and-pop shops, have competed but coexisted peacefully, maintaining a balance. However, an uninvited guest—community hard discount—has shattered this tranquility.

Among these, snack hard discounters, also known as bulk snack stores, have the densest national coverage and the greatest impact.

**Overwhelming**

Bulk snack stores are strategically located in communities and commercial areas, primarily as community stores. They sell major branded products at retail prices that match or even undercut the wholesale prices of traditional distribution stores, and most stores offer an additional 20% discount on membership days.

**The balance of traffic is tipping toward bulk snack stores, making it difficult for chain convenience stores and even supermarkets to compete.** Some supermarkets have chosen to collaborate with distributors to lower the prices of traffic-driving items to match those of bulk snack stores, but this only results in losses.

Compared to chain stores, terminal mom-and-pop shops operate independently without strong financial backing, making their operations particularly challenging.

According to distributors serving small stores in multiple regions, **those small stores adjacent to bulk snack stores and hard discount supermarket chains are hit hardest, with sales continuously declining, some even halving. Many small stores struggle to survive and eventually face closure, while those still operating are barely hanging on.**

**How Can They Offer Such Low Prices?**

Community-based bulk snack stores are sweeping through East China, Central China, and Southwest China. **As of the end of 2022, there were approximately 13,000 bulk snack stores nationwide.**

Through comparisons of certain products, I found that their prices are lower than those in convenience stores, small mom-and-pop shops, and large supermarkets.

Branded packaged snacks are generally 15-20% cheaper than other channels, while branded beverages are 20-40% cheaper.

**How can they achieve such low prices?**

Today, bulk snack stores have entered a phase of rapid development, and the industry appears thriving. However, looking back at their nascent stage, the "low-price journey" was extremely difficult. Almost no major brands were willing to cooperate, fearing market price disruption and questioning sustainability.

Therefore, in the initial phase, bulk snack stores primarily sold white-label products, with a small proportion of branded items. White-label products are manufactured by small factories, lacking brand premium, thus priced low; the few branded items were obtained through special channels like cross-regional selling, leading to unstable supply.

**During the pandemic, foot traffic in traditional channels declined, and snack specialty stores quickly captured traffic with advantages like low unit prices, wide variety, pleasant environment, and proximity.**

As they attracted more consumers, the number of stores increased, significantly impacting sales of snacks and beverages in surrounding ordinary stores. Various channels began to view this new format with caution, and major brands had to take notice.

Since then, bulk snack stores have gained some bargaining power. Gradually, major brands began to embrace this new channel. **According to public information from multiple bulk snack brands, direct sourcing from upstream supply chains accounts for 90%, and eliminating middlemen has effectively controlled the premium of major brands.**

Consumers pay 20-60% less premium for the same products.

Public financial reports show that brands that have embraced this channel have seen considerable revenue growth recently. For example, Ganyuan Foods, which cooperates with multiple snack channels including Snacks Busy, Snacks Youming, Zhao Yiming, and Laoban Daren, expects its first-half revenue to increase by 31.58% to 35.17% year-on-year.

As bulk snack stores have grown in scale, many major brands have adjusted policies since last year, introducing channel-exclusive specifications to minimize harm to other channels.

**Even with specification differentiation, the seed of "lower prices" has already been deeply planted in consumers' minds.**

Chain stores, with their wide product range and financial backing, can withstand the competition, albeit with difficulty, but mom-and-pop shops lack the capacity to compete.

For instance, chain convenience stores have significant fresh food traffic, and while snack stores have some impact, it's not life-threatening. In contrast, street-side mom-and-pop shops, if small in size, typically sell categories like tobacco, alcohol, beverages, and packaged food. Now, snack stores are siphoning off beverage and snack sales, which cannot be ignored.

**Furthermore, bulk snack stores have advantages like "wide variety, pleasant environment, proximity, and scale effects," while mom-and-pop shops' strengths of "close to consumers and serving as relationship hubs" are somewhat inferior.**

**Where Are the Survival Opportunities?**

In simple terms, the development of bulk snack stores directly targets mom-and-pop shops.

In Chengdu, when I asked a fruit-selling aunt where to buy snacks, she unhesitatingly recommended a nearby snack store, mentioning she often buys 8.8 yuan bulk bread and biscuits there. Curious, I asked, "There are many small shops nearby; why do you think the snack store is better?"

The aunt smiled and said, "The snack store specializes in snacks, unlike other small shops. It has a wide variety and low prices. When my kids don't have time for breakfast before school, they basically buy small bread there—it's very convenient."

**Clearly, once chain snack stores reach scale, their positioning and advantages are communicated to local consumers.**

Street-side mom-and-pop shops adjacent to snack stores are most affected. On one side, there's a bright, clean store with a full range of snacks; on the other, a cluttered store with incomplete categories. It's obvious which one consumers will choose.

Declining sales and closures are not surprising. Stores that manage to hold on often have tobacco and alcohol sales to sustain their livelihoods. This is the charm of Chinese mom-and-pop shops—their tenacious vitality.

**Are there other survival opportunities for mom-and-pop shops?**

Currently, snack stores are mainly concentrated in the south, so northern mom-and-pop shops haven't yet felt the chill. According to multiple distributors, **many southern mom-and-pop shops have begun to try breakthroughs.**

Bulk snack stores primarily sell bulk food. Some mom-and-pop shops imitate snack store displays, renovate their stores, and set aside a central area for bulk shelves. Others add a small fresh produce section, choosing common household items like garlic and scallions. Besides selling, they use these to upgrade services—for example, giving away scallions or garlic when customers purchase higher-margin products.

**Based on years of customer relationships with nearby residents, combined with store renovations and new services, these measures can recover a significant amount of sales.**

In addition to new attempts, the location of mom-and-pop shops is also a crucial opportunity. There's a saying: **In residential areas, every 300 households can support one small shop.**

Mom-and-pop shops deeply embedded in communities are less affected by external threats than street-side stores, so moving deeper into residential areas is also a survival opportunity.

#### **Final Thoughts**

**China's consumer market is vast, and every new channel's rise brings pain to the existing market, with the strong continuously devouring the weak.**

The impact of bulk snack stores on mom-and-pop shops is an inevitable trend. However, mom-and-pop shops, often hailed as the "foundation of Chinese commerce," have the advantage of flexibility. As long as they **maintain a sense of crisis, gradually improve, and actively respond to new channel developments, they can secure a place to survive.**


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