---
title: "Is Opening a Physical Snack Store Still Profitable in 2021?"
description: "Physical snack stores remain a dominant sales channel, accounting for over 70% of the leisure snack market. Despite the presence of leading brands, the market is highly fragmented, offering opportunities for new entrants. This article examines the business model of 'Snack Busy', a chain focusing on affordable snacks in central China, and discusses its profitability, regional characteristics, and the evolving consumer habits that favor cost-effectiveness."
author: "赵小米"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-09-14"
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---

# Is Opening a Physical Snack Store Still Profitable in 2021?

> Physical snack stores remain a dominant sales channel, accounting for over 70% of the leisure snack market. Despite the presence of leading brands, the market is highly fragmented, offering opportunities for new entrants. This article examines the business model of 'Snack Busy', a chain focusing on affordable snacks in central China, and discusses its profitability, regional characteristics, and the evolving consumer habits that favor cost-effectiveness.

**Click to read the original article for details**
Source: Future Consumption APP (ID: lslb168) Author: Zhao Xiaomi
Physical snack stores are not a novel concept.
In the overall leisure snack market, offline channels still account for over 70% of sales. Previously, snack chain brands like Lai Yifen, Liangpin Shop, and Beicao Wei have successively expanded to thousands of stores; Three Squirrels, which started online, also began focusing on offline channels in 2018.
Even with leading brands, in the leisure snack market with a total scale exceeding one trillion yuan in 2020, the combined revenue of top players accounts for less than 5% of the market share.
It is evident that the leisure snack market remains highly fragmented. This implies that in the snack track, there is still room for the next company with a valuation exceeding ten billion yuan to emerge.
This year, the Changsha-based snack chain brand "Snack Busy" has become a target for capital. In May, Snack Busy completed a 240 million yuan Series A funding round, with investors including well-known institutions such as Sequoia Capital China, Gaorong Capital, and Qicheng Capital.
Compared to brands like Liangpin Shop and Three Squirrels, which focus on consumption upgrading and target first- and second-tier cities, Snack Busy emphasizes "affordable snacks for the general public," mainly expanding in several central China provinces. It has opened nearly 600 stores in Hunan Province, with store sizes around 100 square meters and average daily sales per store exceeding 13,000 yuan.
In contrast, in recent years, some snack brands with higher premiums have seen declining performance, and some stores have closed due to poor management.
In 2021, is the snack collection store still a good business?
**Affordable Snacks, Small Profits but Quick Turnover**
In Changsha, walking into a Snack Busy store is like entering the snack section of a traditional large supermarket. Affordable snacks from our childhood, such as spicy strips, dried tofu, fish paste, braised food, and dried fruit, can all be found here.
The first impression of products in Snack Busy stores is that they are cheap. Over half of the snacks are sold in bulk small packages, weighed and sold in a wholesale manner. Most bulk items cost less than one yuan each.
Compared to snack selection stores like Three Squirrels and Liangpin Shop, which focus on private brands, Snack Busy offers a wide variety of products from different manufacturers, such as Weilong and Yanjin Shop, intentionally creating a "dazzling" user experience.
For example, for the same type of dried tofu, Snack Busy displays five kinds from different manufacturers.
It can be seen that Snack Busy, as a pure offline affordable snack collection store, operates on a small-profit, high-volume business model.
Founder Yan Zhou showed 36Kr-Future Consumption the sales situation from the previous day on the backend system: with 600 stores, total revenue was 8.18 million yuan, and the average transaction value was 28 yuan. This means that on that Monday, a working day, Snack Busy's average daily sales per store still exceeded 13,600 yuan.
This daily sales figure is at the upper level among small retail formats in new first-tier cities like Changsha.
Compared to convenience stores, Japanese-style convenience stores in new first- and second-tier cities have average daily sales of over 10,000 yuan; compared to Three Squirrels and Liangpin Shop, the former has stated that the ideal daily sales per store in Northeast China can exceed 6,000 yuan, while the latter has not disclosed offline store daily sales figures, but multiple interviews with store managers indicate daily sales in the thousands of yuan range.
The reason for achieving daily sales of over 10,000 yuan, according to founder Yan Zhou, is that the products and prices in Snack Busy stores better match the daily snack needs of the general public.
However, correspondingly, the gross profit for franchisees from the bulk affordable leisure snacks in Snack Busy is not high. Yan Zhou revealed that the gross profit for franchise stores is 18%. Using public information for comparison, Japanese-style convenience stores, Three Squirrels, and Liangpin Shop all have gross profits exceeding 30%.
A Snack Busy store requires hiring 5 staff members, each with a monthly salary of about 4,000 yuan, totaling 20,000 yuan in labor costs; a store of about 100 square meters has a monthly rent of approximately 15,000 yuan; electricity costs 5,000 yuan, bringing the total monthly cost to about 40,000 yuan.
Based on the above daily sales of 13,600 yuan, monthly sales are 400,000 yuan, and with an 18% gross profit, the profit is about 73,000 yuan. This leaves a net profit of 30,000 yuan per month for the store.
For residents of second- and third-tier cities in Hunan, this monthly income is quite high. Most franchisees, after opening their first store, continue to open a second and third, with the largest franchisee opening over 10 stores. Snack Busy also tends to choose familiar partners, and this partnership is somewhat like franchising.
**Regional Specialty Business**
Snack Busy is a business with strong regional characteristics. At this stage, this store model is more suitable for central China regions such as Hunan, Hubei, and Jiangxi.
First, in cities like Changsha, housing prices and labor costs are relatively low compared to per capita consumption capacity. The strong consumption desire in food and daily life is also the reason why Changsha has given birth to several internet-famous restaurant brands.
In first-tier cities like Beijing and Shanghai, there are high labor costs and rents. With Snack Busy's current model of small profits and quick turnover, with low product premiums, it remains questionable whether it can succeed in these cities.
On the contrary, Yan Zhou told 36Kr-Future Consumption: "In lower-tier markets such as counties and towns, stores actually perform better." This is also one of the reasons for Snack Busy's rapid development in central China. Besides Hunan, which is basically covered, Snack Busy's target markets also include Jiangxi and Hubei.
Second, snack consumption habits vary by region. In fact, snack collection stores, which are rarely seen in northern cities, are not new in central China. Yan Zhou counted that when Snack Busy was founded in 2017, there were over 2,700 snack collection stores in Changsha alone, with 7 chain brands having more than 100 stores.
Therefore, consumers in Hunan and other places have a level of acceptance and habit formation for buying snacks offline that consumers in other regions cannot imagine.
Take Beijing as an example: the main channels for buying snacks are convenience stores and large supermarkets, but the snacks there are mostly high-margin and expensive. If you want to buy cheaper ones, you can only go to near-expiry food stores; if you want more down-to-earth snacks, you have to shop online.
In central China like Hunan, buying snacks is more like a daily family consumption scenario. Not only during festivals, but also on ordinary days, young people, children, and the elderly are all consumers of Snack Busy, which keeps the per-store sales stable.
"Consumers in Changsha don't even think about buying snacks at convenience stores," Yan Zhou said. This may also be the main reason why convenience stores in Changsha are still mainly Furong Xingsheng and Meiyijia, with few Japanese-style convenience stores.
At the same time, taste preferences for snacks also vary by region. The product categories in Snack Busy stores across different regions and store types have very small differences; it can be said that the same template is replicated in all stores, with over 80% of products remaining unchanged in the short term.
A large part of Snack Busy's products attract consumers with the spicy flavor of cooked foods. But the acceptance of spiciness varies by region. A flavor popular in Hunan may not be well-received in Northeast China.
So one of the reasons Snack Busy chose Jiangxi as its first expansion province is that Jiangxi's dietary tastes are similar to Hunan's.
In this regard, Yan Zhou believes that the offline leisure snack market in just the three central provinces of Hunan, Jiangxi, and Hubei has enough room for imagination.
A conservative estimate is that when Snack Busy reaches around 1,000 stores per province, it approaches saturation. Then, by thoroughly penetrating the three central provinces, Snack Busy's total store count could reach 3,000.
**Evolution of Consumption Habits**
If the rise of Three Squirrels and Liangpin Shop was an opportunity brought by consumption upgrading, then Snack Busy's current favor with capital is due to young people's consumption views returning to rationality and cost-effectiveness.
In China's leisure snack market, the upstream product barriers are not high.
Taking the second-generation snack brands represented by Three Squirrels and Liangpin Shop as examples, most of their products come from domestic OEM factories. With youthful packaging and more standardized food production and safety indicators, they have built awareness among young white-collar workers in first-tier cities in a market that previously had categories but no brands.
The premium these second-generation brands generate on the consumer side mainly comes from brand packaging, channel scale, and celebrity endorsements. In terms of the food itself, some products use higher-quality raw materials, such as beef jerky and dried fruit, but in taste development, they still converge, with no substantial innovation.
Some netizens have summarized "factory affordable alternative snacks," where buying directly from OEM factory online stores costs more than half the price of brand stores, but the taste is extremely similar.
The reason is also that the upstream industry of leisure snacks is sufficiently developed, and the top factories and most popular tastes across the country have long reached a consensus in the industry.
For example, the leading spicy strip brand is Weilong, the dried tofu factory in the Sichuan-Chongqing region is Haobashi, and the Hunan dried tofu factory is Jinzai. It is not easy to develop unique tastes that surpass these professional factories in long-shelf-life snacks.
But in recent years, young people's consumption habits have changed. On the one hand, compared to blindly following brands, "cost-effectiveness" has become more important to consumers in first- and second-tier cities. People have begun to not shy away from finding lower-priced channels while ensuring quality.
On the other hand, consumers in lower-tier cities and county towns are experiencing an upgrade from mom-and-pop stores to guaranteed chain brand stores.
The evolution of consumption habits has given chain brands like Snack Busy a great opportunity. In 2017, when Snack Busy opened its first store in Changsha, brands like Liangpin Shop had already opened hundreds of stores in central China. But due to differences in positioning, the two did not directly compete.
Young people's preferences for leisure snacks are constantly changing. For example, in recent years, healthy snacks with low oil, low fat, low sugar, and low salt have become popular, and some new brands have emerged.
For chain brands like Snack Busy, which mainly rely on franchising and are essentially 2B supply, how to continuously gain insights into changing consumer needs is the determining factor for their long-term development.
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