--- title: "“I've Run a 16-Year-Old Store in Beijing, and This Year Is Harder Than Last Year”" description: "Wang Dong, who has run a community supermarket in Beijing for nearly 16 years, reflects on the bittersweet journey of retail, facing rising rents, falling sales, and changing consumer habits. He expanded and then contracted his store, and now also runs a new store in a third-tier city, but profits remain thin as costs rise." author: "晴山" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2024-06-29" categories: "Retail Formats" language: "en" canonical: "https://xinjignxiao.com/en/articles/i-ve-run-a-16-year-old-store-in-beijing-and-this-year-is-harder-than-las-cf2328af/" markdown: "https://xinjignxiao.com/en/articles/i-ve-run-a-16-year-old-store-in-beijing-and-this-year-is-harder-than-las-cf2328af.md" original_source: "https://mp.weixin.qq.com/s/Pd1QTbLUNbmfDy_-2aZhAA" translation: "https://xinjignxiao.com/zh/articles/%E6%88%91%E5%9C%A8%E5%8C%97%E4%BA%AC%E5%BC%80%E4%BA%8616%E5%B9%B4%E8%80%81%E5%BA%97-%E4%BB%8A%E5%B9%B4%E6%AF%94%E5%8E%BB%E5%B9%B4%E6%9B%B4%E9%9A%BE-cf2328af.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/i-ve-run-a-16-year-old-store-in-beijing-and-this-year-is-harder-than-las-cf2328af/" citation: "晴山. ““I've Run a 16-Year-Old Store in Beijing, and This Year Is Harder Than Last Year”.” New Distribution, 2024-06-29. https://xinjignxiao.com/en/articles/i-ve-run-a-16-year-old-store-in-beijing-and-this-year-is-harder-than-las-cf2328af/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # “I've Run a 16-Year-Old Store in Beijing, and This Year Is Harder Than Last Year” > Wang Dong, who has run a community supermarket in Beijing for nearly 16 years, reflects on the bittersweet journey of retail, facing rising rents, falling sales, and changing consumer habits. He expanded and then contracted his store, and now also runs a new store in a third-tier city, but profits remain thin as costs rise. Bittersweet: “Those inside the walls want out, and those outside want in.” Wang Dong, who has run a supermarket for nearly 16 years, sighs that running a store is increasingly challenging. Those in the industry complain of hardship, but outsiders are always eager to try. Sixteen years ago, at age 26, Wang Dong opened his first community supermarket in Beijing. “More precisely, it was a tobacco and alcohol supermarket at the time, because there were no fresh food categories; alcohol, cigarettes, and FMCG products accounted for a larger share.” As time passed, Wang Dong became a veteran retailer. “Over the years, it's been bittersweet. Overall, the store has been continuously transforming with the times.” Wang Dong's supermarket is located near the Fifth Ring Road in northwest Beijing, covering about 120 square meters, with a monthly rent of 60,000 yuan. When he opened the store, most of the money was invested by his parents. He bought the shelves himself from the market, hung up the sign, and then started stocking goods. “At that time, the channels were simple. As soon as the sign was up, delivery vehicles came to us.” With no experience at the start, he stepped on many pitfalls. “Once, a customer came to the store and said the batteries they bought were counterfeit. After careful checks, we confirmed they were indeed fake. We had stocked over 400 yuan worth, and the supplier denied it, so we had to bear the loss ourselves.” Besides the early pitfalls, the business was also very tough. “Although many people want to open their own stores and be their own boss, many can't handle the daily grind of keeping the store, let alone when it's not profitable,” Wang Dong said. “When I first opened, I got up at six every morning and closed at eleven or twelve at night. I hardly went out all year, guarding the store every day, with almost no personal time. But it was tiring yet happy, because business was brisk during festivals, and I could make money. At that time, I felt it was worth the fatigue.” Because business was good, he accumulated some large clients who would come to pick up goods during festivals, as well as orders from some institutions. So he expanded by renting the adjacent store, adding fresh food categories, bringing the area to about 240 square meters. Rent doubled, and he hired three or four assistants. “Besides the cost of stocking up, rent, labor, and utilities also increased. Although expenses were high, I could still make money then,” Wang Dong said. But within a few years after expansion, everything changed. Around 2019, rents rose, daily turnover began to plummet, and foot traffic dropped significantly. “Daily turnover was around 8,000 yuan, and foot traffic fell to about 200 people. Then the pandemic hit, making things even harder,” Wang Dong said. “In the second half of 2020, I reduced the store back to 120 square meters, keeping only one assistant. I retained fresh food categories. Fresh food attracts customers but also has high spoilage. In recent years, cigarettes have mainly supported turnover. With many small fresh food stores emerging, the impact was significant. Last year, I removed fresh food, renovated, and focused on being a tobacco and alcohol supermarket. I also partitioned off a third of the store and rented it out to ease the pressure,” Wang Dong said helplessly. Despite the pressure in Beijing, in 2021 he and a friend rented a shop in a new district of a third-tier city in Shandong to run a community supermarket. According to Wang Dong, the new store is in the ground floor of a new residential complex, surrounded by newly built residential areas, with about four or five communities, an occupancy rate above 90%. The store is 100 square meters with an annual rent of 120,000 yuan. “There are many construction sites nearby, so many workers. Average daily turnover is about 4,000 yuan. About 150 meters away, there is a primary and secondary school that will open in the second half of this year,” Wang Dong said. “Currently, my friend and one assistant are running the store. Since rent is not low, we dare not hire more people.” “Now daily turnover is 4,000 yuan. After deducting rent, utilities, property fees, and other costs, we're left with only about 300-400 yuan in profit,” Wang Dong said. The store also handles packages for two courier companies, about 100 packages a day. “It's for attracting customers, so they come to pick up packages and hopefully buy something.” “We are also adjusting categories, compressing daily chemical products because they sell slowly. After compression, we added some stationery categories. We'll try selling them when the school opens next semester to see the effect,” Wang Dong said. He and his friend had eyed the school and wanted to secure the location early. “Last year, rent increased by 2%. Now, most of the money earned here goes to the landlord,” Wang Dong said helplessly. Wang Dong's supermarket's experience of rising rents, falling sales, and declining foot traffic is not an isolated case for physical stores but a microcosm of the challenges traditional supermarkets generally face. Traditional supermarkets and hypermarkets are entering a contraction phase. In recent years, Walmart, Carrefour, RT-Mart, China Resources Vanguard, and Hema Fresh have all reported store closures. Public data shows that from 2020 to 2022, Walmart closed over 60 stores in China, and this year alone, it has closed more than 12. RT-Mart also experienced large-scale closures in the past year. According to financial reports, the company closed 20 hypermarkets during the reporting period. With large-scale closures, Sun Art Retail's employee count dropped significantly, from 107,785 at the end of March 2023 to 86,226, saving over 500 million yuan in employee expenses. However, for individual operators like Wang Dong, facing such drastic industry changes and new consumption patterns, he once seized the dividends of the era, but in this rapidly changing time, he is undergoing a difficult challenge. “This year is harder than last year” “The second half of the year is approaching, but there is no expected recovery; instead, the environment is more difficult,” many retail insiders say. One retailer said that in the past two years, it is clear that most supermarket companies are changing. First, they are innovating business formats by upgrading existing stores and formats to attract and retain consumers. Under performance pressure, major supermarket companies are adjusting their development strategies, shifting from pursuing scale to focusing on operational quality and profitability. On one hand, they are more cautious about opening new stores, even not opening at all; on the other hand, they are optimizing existing stores, closing long-term loss-making stores to stop losses in time. Second, supermarkets across the country are focusing on rounds of deep self-rescue, constantly becoming “new.” Leveraging their supply chain advantages, they are deepening categories. For example, Yonghui has opened “store-in-store” models, changing product displays and store layouts, planning more convenient product zones, including local specialty areas, new product incubation areas, and discount areas. Furthermore, large supermarket chains are shouting “low prices,” not just to respond to price wars, but also to optimize supply chains in the face of new economic cycles and consumption environments. Perhaps price wars can bring short-term foot traffic and “recovery” to supermarkets, but to have long-term staying power, they must rely on strength and return to operations. In this regard, industry insiders suggest: first, adjust product structure to improve overall gross margin; second, strengthen refined management, optimize some stores, reduce costs and increase efficiency; third, build private domain traffic and develop business income beyond offline stores, such as online platforms and external sales agencies, which can offset rent and labor costs and open new channels. In fact, the entry of new brands is also reflecting the reshuffling and upgrading of the traditional supermarket industry, and the undeniable fact that everything goes through a life cycle. Of course, this is closely related to the traditional supermarket business model. The essence of traditional supermarket business is managing shelves, not customers, because the core logic is to charge suppliers entry fees, display fees, and festival fees, with various surcharges accounting for up to 40% of product costs, ultimately passed on to consumers. Moreover, the old store model cannot compete with the experience offered by new retail formats, nor with the “ultimate” low prices of discount supermarkets like Sam's Club or Costco, whose advantages are beyond the reach of many supermarkets. In this era of major transformation, finding your own position and way to survive is most important. After all, survival is the ultimate truth. **From August 20-22, 2024, the “2024 6th China FMCG Conference” with the theme “Crossing the Shrinking Era,” along with the “3rd China FMCG Hard Discount Conference” and the “3rd China FMCG Distributor Conference,” will be grandly held in Shanghai.** At this conference, all roles in the FMCG industry chain will gather, allowing you to see industry trends at a glance, understand hot track directions, penetrate industry resources, and precisely connect with leading brand owners, head retail platforms, and excellent merchants with over 100 million in sales nationwide, providing you with precise decision-making, efficient cooperation opportunities, and on-site learning of exclusive methodologies from FMCG giants! Keynote speeches, roundtable dialogues, report interpretations, closed-door salons, and networking dinners—this thousand-person event has something for you! **🔺Scan the code for ticket inquiries🔺** **Recommended reading** --- ## Citation metadata - Publisher: New Distribution - Author: 晴山 - Published: 2024-06-29 - Canonical: https://xinjignxiao.com/en/articles/i-ve-run-a-16-year-old-store-in-beijing-and-this-year-is-harder-than-las-cf2328af/ - Original source: https://mp.weixin.qq.com/s/Pd1QTbLUNbmfDy_-2aZhAA ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671