Opening a Store Is Easy, Keeping It Open Is Hard: Are Snack Collection Stores a Trend or a Bubble?

In 2023, snack collection stores are making continuous strides. In the first half of the year alone, brands such as "Zhao Yiming Snacks" and "Snack Youming" have won favor from capital. In May, "Linshi Mofa" announced it had secured nearly 10 million yuan in angel round financing, and "Snack Youming" announced a B+ round. Beyond capital market attention, these snack collection store brands are expanding at a pace reminiscent of "Mixue Bingcheng" in the snack industry, especially in lower-tier markets where they aggressively acquire territory through franchisees. However, as more snack collection stores enter the fray, slogans like "affordable," "thin margins," and "full category" have become clichés, making it increasingly difficult to stand out. Whether independent merchants or franchisees backed by chain brands, it seems to be a mixed bag of fortunes. Snack Stores "Battle It Out," Winning Over Young People's Stomachs? "Are snack stores this competitive now? I stock up on snacks here every time!" "A paradise for broke girls, a must-have for foodies, delicious and affordable, a hidden gem snack store" "Trendy snack store, cheaper than Pinduoduo, absolutely amazing"... Want to know where today's young people buy snacks? Scroll through social media and short-video platforms for store reviews and recommendations, and you'll see snack collection stores constantly being mentioned. Look around communities or streets, and you'll see more and more snack discount stores with signs like "Snack Factory," "Snack Youming," "Snack Knows You," "Mouth Snack," and "Snack Busy." In many second- and third-tier cities, especially county towns, it's common to find several snack collection stores on a single street. "Last year, only one store opened outside my residential complex, but in the past six months, two more have opened, all different brands, with two of them adjacent," said Yue Jing, who lives in a prefecture-level city in southwest China. Previously, she would buy snacks at local supermarkets or convenience stores near home. "Convenience stores are small with limited snacks, while supermarkets have more variety but aren't price-competitive and are farther from the community." Yue Jing's first impression of snack collection stores wasn't at her doorstep but when she wandered into one while shopping in the city center to buy a bottle of water. "My first reaction was the low prices—for example, a bottle of mineral water that usually costs 2 yuan was 1.5 yuan. A quick browse showed a wide range of products, from puffed snacks to biscuits and spicy strips. However, many brands were unfamiliar." Later, Yue Jing noticed that snack collection stores were becoming ubiquitous, with bright signs and posters emphasizing "affordability." "When the first store opened downstairs, I went right away. During the opening, there was a half-price promotion, so it was even cheaper. I noticed that these stores carry common brands like Qiaqia, Lay's, and Uha, as well as beverages from Master Kong and Uni-President. Although these are cheaper than in supermarkets, the discounts are smaller. But for bulk items like dried tofu, candies, and lesser-known brands, the unit prices are indeed lower." According to Yue Jing, these stores frequently run membership promotions and engage in price wars when new stores open nearby. Snack collection stores are highly discussed on Xiaohongshu. To gauge the strong momentum of these stores, Yue Jing's observation is just one example. On social platforms like Xiaohongshu and Weibo, many netizens mention, "Within 100 meters, four snack stores have opened. Are they that profitable?" "In a small town in Guangdong, four opened in a month." "In our small county, there are two at a glance, both over 100 square meters." Public data from brands is more direct. "Zhao Yiming Snacks," which started in Yichun, Jiangxi in 2019, had over 1,100 stores by April this year. "Snack Youming" had opened over 1,200 stores in southwest, south, and central China by March 2023, with plans to expand to 16,000 stores by 2026. "Snack Busy" announced that its national store count exceeded 2,000 by November last year, with nearly 1,500 in Hunan Province alone, and added 1,200 stores in 2022. "Mrs. Wife" has nearly 1,000 stores, "Snack Preferred" over 800, and "Dai Yonghong" over 600. Franchising Is "Being Taken for a Ride" Going Solo Is Weak With market-priced 2-yuan mineral water selling for 1.3 yuan and 6-yuan Red Bull for 4 yuan, the most curious question about the proliferation of snack collection stores is: do they actually make money? Zinc Scale notes that snack collection stores currently fall into two categories: franchise stores of chain brands like "Zhao Yiming Snacks," and independent stores started by individual entrepreneurs.

Let's first look at franchise stores. According to "Zhao Yiming Snacks" franchise information, the company charges a franchise fee of 38,000 yuan, a deposit of 20,000 yuan, and management fees of 800 yuan per month. Other costs include decoration, equipment, initial inventory, and working capital, totaling approximately 600,000 to 800,000 yuan. Store requirements include being located in a commercial area with daily foot traffic of no less than 50,000 people, specifically in the core shopping street, with a store area of no less than 120 square meters and a storefront width of no less than 8 meters. "Snack Busy" has a fee breakdown including a 50,000 yuan franchise fee, 30,000 yuan deposit, 100,000 yuan decoration cost, 120,000 yuan equipment cost, and 180,000-200,000 yuan for initial stocking. Stores are categorized into community, commercial, school/factory, and township types, with a minimum area of 100 square meters. Additionally, rent, transfer fees, and labor costs must be considered. Although these brands often attract franchisees with high daily sales and gross margins, many franchisees on social platforms like Xiaohongshu and Weibo say, "After franchising, I realized it's just being taken for a ride." For instance, data provided by Snack Busy to Interface News shows that single-store daily sales are around 13,000 to 15,000 yuan, with gross margins of about 18-20%. However, many franchisees say profitability is not as easy as imagined. Xinyi, who previously worked as a stock clerk at a Snack Busy store, posted a note saying she had planned to franchise a store in a township but gave up. "After researching, the gross margin is too low, and the initial investment is quite large. If you have spare money and can wait for returns, consider it, but it's hard to say when you'll break even." "I've been open for a month and already want to transfer the store," a franchisee of a snack collection store told Zinc Scale. "Profit is really low. Our brand sets uniform prices: C'estbon mineral water sells for 1.2 yuan a bottle, cola for 2.3 yuan. It's just low-price selling for attention." Additionally, on Xiaohongshu, a franchisee of "Snack Daddy" posted, "A micro-profit snack store open for less than ten days is closing and clearing stock." They added, "This is probably the fastest store to open and close, losing everything. Franchising snack stores is basically a scam." Many snack store entrepreneurs advise against it. According to "Fast Consumer," a retail industry practitioner in the southwest region revealed that in Chongqing, a local brand "Mouth Snack" had over 200 stores at its peak, but now nearly 30% have closed, and closures continue. Zinc Scale also noticed netizens saying, "Mouth Snack closed after two months. Franchise fees are high, rent is high, profits are low. Daily revenue of five to six thousand yuan still doesn't make money." On the business-focused Q&A platform 12Reads, someone asked, "In July, I opened a small snack store with my sister. The store is 20 square meters, franchised. All equipment and over 200 snack varieties are sourced from the franchisor. After six months, we're losing money almost every day. Annual rent is 40,000 yuan. We take turns watching the store. The location is too remote; we had no experience and chose the site blindly. We can't continue. What should we do?" In fact, franchise traps are not uncommon. An industry insider revealed, "Snack store profits are really not high. The surface profit isn't what actually ends up in your pocket. The data brands show you is mostly beautified." The reality is that although the brand provides a fixed supply, revenue isn't as high as imagined. A key reason is that snack collection stores require massive stocking with a wide variety, leading to high procurement costs. But only a limited number of products sell well and turn over quickly, making it hard to balance inventory and profit. What about going independent without franchising? The difficulties are far greater than imagined. "Opening your own store does save franchise fees and various management fees, and pricing is more flexible. Generally, from decoration to opening, it costs about 200,000 yuan. But there are many problems," said Shurui, who runs a snack collection store in Chongqing. In her view, pressure comes from sourcing. "Compared to chain brands, small stores like ours have less bargaining power. We have to buy from wholesale markets, which may not offer as many brands as chains, and prices are slightly higher. But the harder part is keeping the store. Snack stores, whether franchised or independent, follow a low-price promotion route with thin margins. To save labor costs, we watch the store ourselves from morning to night, but revenue fluctuates. You need to be mentally prepared." On Xiaohongshu, netizens also say, "I opened a snack store before the New Year, self-operated, not franchised. I did a lot of research, but still lost money and plan to close." "Snack store prices are transparent and easy to compare, especially with so many chain brands now. Several stores squeezed onto one street, profits get squeezed lower. Independent stores are weak and easily go bankrupt." Not to mention, on various short-video platforms, videos like "Snack store opened with 500,000 yuan, daily revenue over 6,000 but going bankrupt" and "Snack store in university commercial street closed after a year, losing 150,000 yuan" are endless. Opening Is Easy, Keeping Is Hard: Repeated Reshuffling Since business is tough, why do so many snack collection stores keep opening? This is related to the "star brands" boosted by capital and the "prosperity illusion" created by chain brands. From the capital market perspective, recently, the snack discount chain brand "Snack Youming" announced a B+ round of financing, led by Shengwang Fund under New Hope's Caogen Zhijia, with Jiayu Capital following. According to Tianyancha, this is the brand's fifth round in over two years, with previous investors including Yunlu Capital, Kaifu Fund, Xinxian Capital, etc. "Zhao Yiming Snacks" completed a 150 million yuan A-round in February 2023, led by Heiyi Capital, with Liangpin Shop following. In May 2022, "Linshi Mofa" announced an angel round of nearly 10 million yuan. But beneath the prosperity, there are undercurrents. On one hand, more consumers are seeing through the tricks of snack collection stores. "At the beginning, there were more well-known brands and prices were indeed favorable, but later, more unfamiliar brands appeared, and prices for familiar brands weren't cheap either," Yue Jing said. This isn't just Yue Jing's personal feeling. On Xiaohongshu, many netizens point out, "I always thought things were cheaper at snack stores. Today I bought some at Zhao Yiming Snacks and calculated carefully, finding that each pack isn't really cheap." Some even say, "These stores are more expensive than online shopping. I'm always attracted by ultra-low prices, but end up buying a bunch of stuff that isn't cheaper than online, or even supermarket prices." An important reason is that snack collection stores have three product categories: first, well-known domestic and international brands; second, distributor brands and factory-direct products; third, private-label products. The first category serves as low-price traffic drivers, while the second and third are the main profit contributors. Profit margins for well-known brands are transparent, while "white-label" products have more pricing flexibility. "But relatively few young people are willing to buy private-label products. The market might be bigger in county towns, but it also depends on location," Shurui said. Meanwhile, the quality of products at snack collection stores is questionable. According to the National Enterprise Credit Information Publicity System, several Zhao Yiming Snacks franchise stores have been administratively penalized. The most recent was on February 1 this year, when the She County Market Supervision Administration in Huangshan City, Anhui Province, penalized the She County Zhao Yiming Snack Store, confiscating the food sold, illegal gains of 357.88 yuan, and imposing a fine of 5,000 yuan, because the store, established on November 14, 2022, had not obtained a food business license at the time. On April 11, 2022, the Gao'an Zhao Yiming Snack Store was fined 20,000 yuan by local market supervision for operating frozen food with non-compliant labels. On May 7, 2022, the Taihe County Zhao Yiming Snack Store was also penalized for selling expired "Tongnianji" brand salted peanuts. On June 21, 2022, the Nanfeng County Zhao Yiming Snack Store was found to have sold goods with non-standard patent labeling and counterfeit patents. Not to mention the increasingly fierce competition and price wars, which will inevitably lead to rounds of reshuffling, with rapid openings and closures becoming the industry norm. If chain brands can rely on franchise fees and capital support to "find new trends," where do franchisees and individual entrepreneurs go?