**Introduction: Whether from theoretical design such as business model and profit model, or from practical results, New Life supermarkets have made beneficial explorations for the transformation and upgrading of traditional hypermarkets. In recent years, New Life supermarkets represented by Hema, Yashi, and Haolinju have shown strong development momentum. During the two years when physical retail performance generally suffered, these three companies achieved counter-trend growth with popular new stores and impressive sales. On September 17 this year, Yashi's Yichang Wuyue Plaza store opened, with first-day sales exceeding 2 million yuan in 9,300 square meters. On September 10, 2021, Hema opened its first store in Hefei, with an area of 2,600 square meters and first-day sales of 2.33 million yuan, maintaining around 1 million yuan on regular days. Nine days later, Haolinju's Yueleli Wuhan Fenghuo store opened, with 1,800 square meters of operating area and first-day sales of over 800,000 yuan, maintaining around 300,000 yuan daily. In contrast, hypermarkets frequently reported closures due to poor management. According to incomplete statistics from Longshang.com & Supermarket Weekly, as of the first three quarters, retail enterprises mainly operating hypermarkets, such as Beijing Jingkelong, Tianhong Supermarket, Better Life, Jiajiayue, and Renrenle, all showed a trend of "more closures than openings" in store count changes. For example, Better Life opened 4 stores and closed 23. Performance was also not optimistic. From the first three quarters' financial reports, Yonghui, Jingkelong, Renrenle, Shunkelong, and Better Life all suffered losses, while Jiajiayue and Tianhong Supermarket did not lose money but saw net profit decline. The prosperity of New Life supermarkets and the decline of hypermarkets form a sharp contrast. Longshang.com & Supermarket Weekly believes this stems from the different responses of the two formats to market environment changes and the resulting different outcomes. On one hand, with changes in consumption patterns and market environment, the advantages of hypermarkets are gradually being lost. Product variety and low prices were inherent advantages of hypermarkets, but with the impact of e-commerce and channel diversion, they have almost vanished. At the same time, hypermarkets have become less attractive to young consumers because they do not align with young people's lifestyle and shopping habits. These unfavorable factors put them at a disadvantage when competing with rivals including New Life supermarkets. On the other hand, New Life supermarkets have adapted to market changes and actively adjusted, further enhancing store vitality. Although facing challenges such as e-commerce impact and channel diversion, New Life supermarkets have compensated for offline disadvantages through measures such as reshaping consumption scenarios, adjusting product structure, and improving shopping channels, winning the favor of especially young consumers, with steady performance growth. Currently, physical retail such as hypermarkets is at a critical period of transformation and upgrading. How to break through development bottlenecks, optimize business operations, and regain market share requires business operators to delve into the underlying logic of business to reshape formats and scenarios, rather than superficial repairs. From this perspective, New Life supermarkets like Yashi and Hema, whose business models have basically been validated, may become the future transformation direction for traditional hypermarkets. The Two Ends of the Scale It is not hard to notice that a batch of New Life supermarkets are rising. Although the number of such samples is not yet large, they have quickly attracted industry attention with their new look, booming performance, and abundant vitality. As the "most beautiful supermarket," Hubei Yashi has been frequently opening stores in recent years with impressive performance, and many stores can be said to be "booming upon opening." For example, the two stores opened last September, the Wufeng county store in Hubei and the first Wuhan store, as well as the Yichang Wuyue Plaza store this September, averaged first-day sales of around 1 million yuan, quite impressive. ▲ Yashi Yichang Wuyue Plaza store opening scene Among them, the opening of the first Wuhan store marked Yashi's completion of a three-step leap in development: from initially developing county-level retail in the prefecture-level city Yichang, to returning to Yichang city, and now entering the provincial capital. As of now, Yashi has about 30 large stores above standard, and by the end of next year, Yashi plans to expand to 45 stores, further growing its scale. Hema, a representative of new retail, has seen steady improvement in sales and profitability as operations mature in recent years. For example, the two stores Hema opened last year, the 1,850-square-meter first Zhengzhou store and the 2,600-square-meter first Hefei store, had first-day sales as high as 1.83 million and 2.33 million yuan respectively, and can maintain 860,000 and 1 million yuan on regular days. Notably, Hema's first Zhengzhou store achieved profitability in its first month. After seven years of development, Hema now has over 300 Hema Fresh stores nationwide, plus formats such as Hema Outlets, Hema Neighborhood, Hema X Membership Store, and Hema Mini, gradually improving its network layout and growing its scale. Hubei Xiangyang Haolinju also performed well, such as the Wuhan Fenghuo store opened last September, with 1,800 square meters and first-day sales of over 800,000 yuan, maintaining around 300,000 yuan on regular days. On the other end of the scale, hypermarkets have suffered Waterloo. On one hand, there is a wave of hypermarket closures. As early as 2021, Carrefour showed signs of decline. Statistics show that last year, Carrefour closed more than 20 stores, including some nearly 20 years old. In 2022, Carrefour frequently reported closures: in March, it closed 4 stores consecutively; at the end of May, a store in Hefei closed; in June, it was reported to exit the Fuzhou market; in August and September, more stores closed. Another giant, Walmart, closed 31 hypermarkets in mainland China last year, including its first store in China, Shenzhen Honghu store, which also "died." This year, news came of closures of Walmart's last store in Shandong and a store in Mianyang, Sichuan. In fact, not only foreign brands like Carrefour and Walmart, but also local supermarkets such as Yonghui, Renrenle, and Better Life have frequently closed stores in recent years. For example, in the first half of last year, Renrenle closed a total of 19 stores, and in the first three quarters of this year, stores continued to close; Yonghui closed 17 stores in the first three quarters of this year. Other reports show that as of the end of August this year, Yonghui Supermarket had closed nearly 400 stores in three years. On the other hand, performance has continued to slump. According to statistics from Longshang.com & Supermarket Weekly, in the first half of 2022, 11 of 17 retail enterprises saw revenue decline, such as Renrenle, Shunkelong, and Jingkelong. From the latest third-quarter reports, Yonghui, Jingkelong, Renrenle, Shunkelong, and Better Life all suffered losses. Among them, Yonghui, after a net loss of 4.5 billion yuan last year, lost another 120 million yuan in the first half of 2022, and although the loss narrowed year-on-year in the first three quarters, it still lost 887 million yuan. Renrenle has been losing money for years, with continuous operational pressure. Glory and Decline The hypermarket format has two major advantages: complete categories and low prices. Biyoute Chairman Meng Fanzhong said that compared to small stores like convenience stores, large supermarkets have the advantages of large area, complete products, and low prices. "Because of supply chain advantages, the purchase price is lower; the disadvantage is inconvenience, which is a hard flaw of large supermarkets." In the 1990s, foreign companies like Carrefour and Walmart entered the Chinese market, quickly capturing consumer minds with advantages such as complete categories, low prices, and one-stop shopping, creating the glorious era of hypermarkets in China. Later, domestic brands like Yonghui, RT-Mart, and Better Life also adopted the "hypermarket" model. From the consumer side, when hypermarkets first entered China, these advantages could satisfy Chinese consumers' desire for goods because the market was in short supply, with buyers dominating. In terms of the competitive environment, China did not yet have e-commerce, and distribution channels were far less developed than today. The relatively mild market created an excellent growth environment for hypermarkets. However, with changes in the times and consumption evolution, the advantages of hypermarkets are gradually being lost. As mentioned above, hypermarkets have advantages such as complete categories and low prices, but due to changes in consumption habits and the competitive environment, from a certain perspective, the three advantages have become three disadvantages. First, on the consumer side, the lifestyle of contemporary Chinese consumers has undergone major changes, with increased entertainment time and reduced shopping time. Coincidentally, e-commerce can save consumers time in visiting stores and selecting products, so consumers are more willing to shop online. Second is the change in the competitive environment. Domestic e-commerce has risen suddenly, coupled with numerous shopping channels and developed logistics and distribution systems. Hypermarkets not only face competition from physical retail peers such as community stores and wet markets but also find themselves in the awkward position of competing for customer traffic with e-commerce platforms, community group buying, and live-stream e-commerce. Meng Fanzhong frankly stated that it is not that the large supermarket format is no longer viable, but that enterprises have lost the original advantages of traditional retail, while disadvantages have become more prominent. How to leverage strengths and avoid weaknesses, maintain the advantages of large supermarkets, and thereby increase sales has become crucial. New Life and Hope In contrast, New Life supermarkets continuously adjust to market environment and consumption changes, change business strategies, and compensate for the model drawbacks of hypermarkets, thereby winning the market. First, reshape consumption scenarios. Early operators positioned traditional hypermarkets merely as shopping places, that is, displaying products for consumers to purchase, and nothing more. This was not a problem in an era of insufficient supply; it did not affect sales and to some extent reduced extra costs such as props and decoration. But this rigid, lifeless scene design has become a disadvantage today when consumers are increasingly picky and online impact is severe. Imagine, if consumers face cold products and indifferent service, how much interest would they have in shopping? In the industry, Yashi's scene design is praised because Yashi reconstructed the store from the underlying logic, no longer treating the store merely as a place for product display. Through vivid scene arrangements, lively on-site atmosphere, and artistic sensory experiences, the store is "alive" and vivid, attracting consumers. For example, the first Wuhan store promotes itself as "China's most beautiful supermarket, internet celebrity check-in place, handmade retail experience store, food museum," using a large number of props and decorations to create beauty, various on-site processing to form a handmade retail scene, and cooked food and catering to fill the store with the hustle and bustle of life. In the liquor section, Yashi uses stainless steel for the ceiling, which under lighting looks like a large mirror, making the space appear larger and fashionable, paired with bar stools, bar counters, and lazy sofas, and even placing a piano in the store. It is said that piano performances may be held later, all in Yashi's pursuit of creating an artistic atmosphere and providing customers with an immersive experience. ▲ Piano in Yashi's first Wuhan store According to statistics, customers under 45 years old account for about 60% of Yashi's Wufeng county store, and other Yashi stores also have a large number of young customers, completely changing the traditional supermarket customer structure dominated by the elderly. Second, adjust product structure. With the changing times, the product structure of traditional hypermarkets no longer meets the needs of current consumers, with problems such as aging product structure, more but not complete, weak product power, and slow turnover. To address these issues, Biyoute sorts SKUs, accelerates new product replacement, eliminates slow-moving products, and strives to present consumers with complete and attractive products. "More products and more SKUs do not mean complete products. If there are 20,000 SKUs, but are there any that haven't sold in half a year? Are there any food items with zero sales in three months? If these account for 50% or even 70%, can it be called complete? It can only be called many products. Complete products refer to effective products; many non-moving products do not mean complete." Meng Fanzhong said. For a long time, the channel fee model, although generating revenue for hypermarkets, deviated from the customer-centric business principle, which is the fundamental reason for the lack of competitiveness of hypermarket products. Meng Fanzhong believes that hypermarkets must improve procurement levels and see whether the products purchased are what customers like; if customers do not like them, it is difficult to sell. In this regard, Yashi has undergone deeper changes. First, strengthen the proportion of fresh food. Compared with general hypermarkets, Yashi has a higher proportion of fresh food display and sales, stronger fresh food operation capabilities, making it a signature product of the store. Yashi's first Wuhan store continues to strengthen fresh food, such as expanding the scale of live aquatic products, cooked food, and pastry categories, with fresh food operating area accounting for 55%-60% of the entire store, and about 12,000 SKUs. Second, fresh food operations emphasize structural optimization and use internal category conversion mechanisms to reduce losses and improve profitability. Unlike many supermarkets that only treat fresh food as a traffic driver, Yashi requires fresh food to also have profitability, so it must grasp the proportion of the "old three" (vegetables, fruits, fresh meat) and the "new three" (cooked food, bread, catering) in fresh food, with a significant increase in the proportion of semi-finished products, finished products, cooked food, pre-prepared food, and catering. In Yashi's first Wuhan store, there are about 2,000 SKUs of processed products including pastries and cooked food. During the opening period, many dishes performed well, such as the mature single product lamb buns selling hot, and only the small bowl dishes sold over 30,000 yuan on the first day. Traditional braised duck series such as sauce duck and secret duck each averaged over 10,000 yuan in sales. ▲ Yashi's first Wuhan store food processing In the entire Yashi, the gross profit margin of processed cooked food products reaches 40%, and even after deducting losses, the overall gross profit margin of fresh food including processed cooked food is above 20%. It is worth noting that compared with traditional hypermarkets, the SKU statistics standard of New Life supermarkets has changed. For example, the above-mentioned Yashi Wuhan first store has about 12,000 fresh food SKUs, such a large number of items, which obviously does not use the traditional store statistics standard. Longshang.com & Supermarket Weekly believes that this change is first to adapt to new consumption needs and build a new product structure, and second to facilitate store cost control and division of labor. This is also a characteristic of New Life supermarkets. Overall, New Life supermarkets do not stick to old ways. Facing changes in the market environment and consumers, they reconstruct the store from the underlying logic, reshape the profit model, and open a new path for offline store transformation and survival. As the saying goes, "There is no road in the world; when many people walk it, it becomes a road." New Life supermarkets have a promising future.