Rent income seems much easier than the hard-earned money from operations. Auchan has gone the furthest in subleasing, taking 10,000-20,000 square meters per store, retaining part for its supermarket, and subleasing the rest, earning handsomely annually. Yonghui has followed closely in recent years, expanding its external rental areas to balance costs. Carrefour has intensified its efforts by allocating all in-store home appliance areas to Gome, making subleasing more prevalent. Whether new retail or traditional retail, everyone is seeking monetization paths. All investments are made in hopes of returns, preferably short-term. The retail industry attracts capital mainly due to its replicability and cash flow advantages. Early retail relied on quasi-financial attributes to rapidly open stores, sell quickly, and grab cash, but that no longer works. Rapid store expansion was initially limited by property factors; later, consumer habits made standardization unable to cater to different customer groups, leading to single-store ceilings. After the standardized replication game failed, retail tried to prove profitability to capital by increasing gross margins. A typical example is Auchan. After listing, Auchan continuously raised gross margins, but single-store sales moved inversely. High margins led to low sales, eventually resulting in the company essentially selling itself. Proving profitability by raising gross margins is usually the stupidest model. Most disruptors break through with low margins, while advocates of high margins are vilified as exploiters. Auchan tried to prove itself by raising margins, but scared off investors, who fled. In recent years, Auchan's expansion has slowed because opening stores became a burden; larger scale didn't bring benefits, leading Auchan to reflect. More stores, even if not generating front-end revenue, should at least provide bargaining power for the back-end supply chain. But Auchan's scale hasn't shown supply chain dividends, meaning its size hasn't improved its supply chain bargaining power. Yonghui faces the same issue. Is the relationship between store scale and supply chain bargaining power a false proposition? If it is, why are so many companies still doing centralized procurement and deepening supply chains? If not, why can't Auchan, Yonghui, and others prove their bargaining power despite growing scale? The larger the purchase volume, the lower the price. Many companies are forced to accept higher costs due to small purchase volumes. This led to various collective models to enhance bargaining power and compete with giants. When a company is small, store scaling helps most in improving supply chain bargaining power. When a company grows from a chick to an ostrich, on one hand, suppliers don't want a monopoly and won't offer excessive support; on the other hand, suppliers have limited optimization directions. If the channel can't help suppliers reduce costs, there's no room to cut. At that point, whether you're a big ostrich or a small ostrich makes no difference to suppliers. Many regional giants find that adding three or five or thirty or fifty stores doesn't matter much. Relying on drinking and smooth talk doesn't work. Unless the ostrich becomes an elephant, where every step causes an earthquake, only then will bargaining power return to the channel. How far is the path from ostrich to elephant? Most regional giants are essentially giants in one or a few cities. For example, Yonghui, even in its home base Fujian, only leads in Fuzhou's urban area, not even in counties under Fuzhou. Most regional giants haven't solidified their markets; they're just the largest in their provinces. There's still huge room to truly solidify their regions. Hema Fresh, when still a chick, set an elephant-sized framework and constantly reinforced to the outside that Hema is elephant-level, aiming to view the market from an elephant's height. A few months ago, it told suppliers: either drink and eat meat together, or go cool off. The supermarket industry, facing the single-store ceiling, gross margin ceiling, and supply chain ceiling, began to rethink its life. The birth of new retail was an expectation during the industry's downturn, hoping someone could help escape difficulties. As for what new retail is, how to operate, and how to monetize, everyone is still exploring. The market once had high expectations for new retail, especially with the birth of Super Species, thinking it found a monetization path. This path is essentially high gross margin + subleasing. Selling high-margin products increases profits, and subleasing earns rent. Logically, it seems right: sell higher-end products for more margin, but how to attract enough consumers to monetize? Sublease rents are double the original rent. If you can't bring customer traffic to subtenants, why would they pay a premium? And you can't even get commission points. Super Species, as an internet sensation, did have some traffic short-term, but how to continuously satisfy high-margin products' need for traffic quality and subtenants' need for traffic volume? Super Species couldn't solve these issues and basically fell into its own trap. Whether it's new retail's so-called empowerment or artificial intelligence, the gap between ideals and reality on the channel side is huge. IT technology's core lies in algorithms and machines. In simple environments like warehouses, it can be flashy, easy to quantify, and path-analyze. The channel's core lies in people. It requires developers to have rich offline operations experience and strong adaptability to tame machines. An event may have a thousand responses; machines need not only sufficient stored data but also continuous database probing and external data analysis to find the best response. Current big data is in the data collection stage, only capable of simple arithmetic, far from monetization. Subleasing appears to be the fastest monetization path. Subleasing is essentially selling your existing traffic. The stronger the supermarket's traffic generation and quality, the higher the sublease premium. Rent is easier money than operations, so why didn't supermarkets use large areas for subleasing before? Because they couldn't support too large external rental areas; once expanded, a batch of tenants failed, nearly bankrupting the supermarket. Auchan once tried to infinitely expand its external rental area, but it became deserted, leading to reflection. When a supermarket's traffic generation falls below the survival coefficient of tenants, it's prone to collapse. Shopping centers predict the introduction of supermarkets to calculate rent, giving different rent policies based on each supermarket's traffic. Auchan can support a larger sublease area than other supermarkets because its traffic generation is far higher. If an ordinary store wanted the same external rental area as Auchan, it would need to set up a separate department store company; managing it under the supermarket would basically collapse. Supermarket subtenants are purely traffic buyers, and they lack traffic generation capabilities, needing immediate monetization. When the supermarket can't meet their needs, they leave quickly. In subleasing, the relationship between traffic and sublease size is clear: Auchan > Yonghui > ordinary stores. Any expansion beyond your traffic generation capability is irresponsible. Of course, some areas have huge traffic that can compensate, like industrial zones with dense crowds after work. Supermarket subleasing mainly involves external rental areas, but now internal rental areas are emerging. Internal areas were previously untouched because supermarkets need overall operations. For example, supermarket home appliances are mainly mid-to-low-end, with strong customer compatibility. Once shifted to mid-to-high-end, customer exclusion may occur, causing traffic decline. Internal rental area customer conflicts not only affect the supermarket but also reduce traffic conversion for external areas. If the supermarket doesn't plan to optimize its overall customer base, a single action's effect remains to be seen. Subleasing brings quick money, but it won't become the supermarket's main business, mainly because supermarkets lack the capability to support too large subleasing operations. Each supermarket has its sublease area ceiling. External areas can be used for balance, but internal areas still need caution. Source: Lianshang.com Information (ID: lingshouzixun) -END-