---
title: "Same-Store Sales Down 24.53% Year-on-Year: Is RT-Mart Eyeing Warehouse Club Stores?"
description: "Based on multiple sources, RT-Mart's intention to 'test the waters' with warehouse club stores is confirmed, with the first store expected to open in mid-March next year, though specific details are not yet disclosed. Currently, there are two mainstream expansion models for warehouse clubs: one is the fee-based membership model represented by foreign players like Sam's Club and Costco, targeting middle-class consumers with high-quality, value-for-money products and spacious shopping environments; the other is the no-membership-fee warehouse store model, quickly converted from existing hypermarkets, targeting the general public with bulk discounts, as exemplified by Yonghui."
author: "龙商网"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2022-09-14"
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# Same-Store Sales Down 24.53% Year-on-Year: Is RT-Mart Eyeing Warehouse Club Stores?

> Based on multiple sources, RT-Mart's intention to 'test the waters' with warehouse club stores is confirmed, with the first store expected to open in mid-March next year, though specific details are not yet disclosed. Currently, there are two mainstream expansion models for warehouse clubs: one is the fee-based membership model represented by foreign players like Sam's Club and Costco, targeting middle-class consumers with high-quality, value-for-money products and spacious shopping environments; the other is the no-membership-fee warehouse store model, quickly converted from existing hypermarkets, targeting the general public with bulk discounts, as exemplified by Yonghui.

Based on multiple sources, RT-Mart's intention to 'test the waters' with warehouse club stores is confirmed, with the first store expected to open in mid-March next year, though specific details are not yet disclosed.
Currently, there are two mainstream expansion models for warehouse clubs: one is the fee-based membership model represented by foreign players like Sam's Club and Costco, targeting middle-class consumers with high-quality, value-for-money products and spacious shopping environments, along with value-added services tailored to the target customer base; the other is the no-membership-fee warehouse store model, quickly converted from existing hypermarkets, with no entry barriers, targeting the general public with bulk discounts, as exemplified by Yonghui.
Which model RT-Mart will adopt remains to be seen, but it is certain that regardless of the approach, RT-Mart's entry into the warehouse club sector is not early—arguably somewhat late.
Now, 'pioneer' Sam's Club has been meticulously cultivating the Chinese market for 26 years, while another high-end membership club giant, Costco, has been in China for over three years.
Meanwhile, under the new circumstances of consumption upgrade compounded by the pandemic, consumers' mindsets have shifted: while emphasizing quality, they now place greater emphasis on cost-effectiveness and plan purchases more deliberately. This has led to a boom in membership clubs that offer superior quality at reasonable prices, giving rise to local newcomers like Fudi and Hema X. Some capable supermarkets have also actively entered the fray: Metro, which changed ownership and previously focused on B2B membership, is gradually shifting its business focus to C-end consumers, while Carrefour is exploring membership store formats within its existing hypermarket operations.
Additionally, during the boom of membership store formats in 2021, retail enterprises with the means, such as Yonghui, Carrefour, Beiguo Supermarket, and Guan Supermarket, developed warehouse stores by renovating existing stores. These conversions had lower adjustment costs, faster store expansion, and no membership fees, and they have now achieved a certain scale in the market.
Although the warehouse club format has not been thriving in China for long, the number of competitors in the market is increasing. Is RT-Mart entering too late? Moreover, which format should it choose: targeting middle-class consumers with higher spending power through fee-based membership clubs, or renovating existing hypermarket stores and streamlining existing supply chains for rapid expansion? Especially given that Hema X has already achieved a certain scale and positive development, would RT-Mart's foray into a similar format differentiate itself or become a twin brand?
These are the questions RT-Mart must weigh.
**01 Late Entry**
Warehouse clubs are a foreign concept to the domestic market. The first to establish membership clubs in China was Sam's Club, which opened its first store in Shenzhen in 1996.
Since then, Sam's Club experienced a long period of dormancy until the past five or six years, when it saw strong growth in membership, sales, and store count. Unlike Sam's Club, Costco, another U.S.-based membership club chain, entered China relatively late, opening its first mainland store in Shanghai in 2019. However, its timing was quite appropriate and precise: two years later, in 2021, the membership club sector, which had been 'silent' for over two decades, experienced explosive growth.
During that year, a wave of domestic warehouse club enterprises emerged, including nearly 10 large-scale supermarket companies such as Hema, Yonghui, Carrefour, Metro, Jiajiayue, Guan Supermarket, and Fudi, along with smaller regional players testing the waters. Warehouse clubs instantly became the hottest format last year, enjoying unprecedented popularity.
The momentum has continued into this year, with membership clubs and discount stores becoming the two preferred formats for retailers exploring transformation. This makes it easy to understand why RT-Mart, once the 'number one' supermarket, plans to enter the warehouse club sector. But the reality is that the optimal time to enter the membership club track has passed; comparable competitors have already entered and are expanding in an orderly manner, leaving less room for RT-Mart to maneuver.
As of now, Sam's Club, which has significantly accelerated its store openings, has 37 stores nationwide, with the latest opening in Baoshan, Shanghai, at the end of August. Including six under construction, Sam's Club is expected to exceed 40 stores by the end of this year, reaching 43. Costco is also accelerating, with two stores currently open, one more by the end of 2023, and six projects where land has been acquired for future construction.
Among domestic brands, Hema has opened a total of 7 X Membership Stores across Beijing, Shanghai, Suzhou, and Nanjing. In the fiercely competitive Beijing market, dark horse Fudi is expected to have 5 stores by the end of the year. Metro, including its recently opened Beijing Sijiqing store, has opened 22 membership stores nationwide, and with another store opening at the end of September, it will have added 4 stores in less than a year.
Adding Yonghui's 43 converted warehouse stores and regional leaders' trials, the domestic warehouse club market will have approximately 120 stores by the end of September. As time goes on and layouts deepen, the number of stores is likely to continue increasing. RT-Mart, whose first membership store is not expected to open until around March next year, has largely lost the first-mover advantage in terms of consumer mindshare, location resources, and product development, making it difficult to truly succeed.
On one hand, there are many formidable competitors, making it no easy feat to overtake them. On the other hand, for RT-Mart itself, warehouse clubs are a brand-new track, and exploring from scratch is undoubtedly challenging for the entire team.
To a certain extent, this suggests that RT-Mart's warehouse club stores will likely be primarily conversions and upgrades of existing hypermarket stores. In this regard, Walmart has also begun exploring the Sam's Club city center store sub-format, which, more specifically, involves converting eligible Walmart hypermarket stores, though this initiative has not yet shown significant progress.
Given that it has missed the first-mover advantage, why is RT-Mart still determined to test the waters? Is it a proactive breakthrough or a response to pressure from hypermarket performance?
**02 Pressure from Declining Same-Store Sales?**
Despite unfavorable conditions, RT-Mart's 'persistence' in entering the market may be related to the significant decline in same-store sales at its hypermarkets in recent years, according to Longshang.com & Supermarket Weekly.
According to CCFA's annual top 100 list data, in 2021, RT-Mart's total sales were approximately 98 billion yuan, with 602 stores, and average annual sales per store of 163 million yuan, the lowest in history and the first time it fell below 200 million yuan. Compared to 216 million yuan in 2020, same-store performance dropped by 24.53%, a significant decline.
In fact, over the past five years since 2017, RT-Mart's performance has not been very optimistic. Except for 2020, when the sudden pandemic caused a rise in performance, other years saw year-on-year declines, with the decline widening: from 5.22% in 2018 to 11.01% in 2019, and then to 24.53% in 2021. The decline ratio increased from single digits to double digits, and the magnitude grew from 1/20 to nearly 1/4, indicating a clear acceleration.
This shows that RT-Mart, which has been in China for 24 years and developed smoothly for nearly 20 years, has seen a serious decline in same-store operational capability amid the downturn of hypermarkets and severe industry conditions. To some extent, this also indicates that the store reforms led by Alibaba in recent years, which mainly revolved around Alibaba's online traffic ecosystem, have not solved the overall performance decline of RT-Mart's stores. Thus, the decision to enter the warehouse club format is also a direction to explore boosting same-store performance, hoping to reverse the downward trend of its main business.
Regarding which model RT-Mart will choose, based on analysis of same-store performance, Longshang.com & Supermarket Weekly believes it is likely to follow a renovation route similar to Carrefour: selecting high-quality resources from the supply chain, organizing a batch of products from its existing, vast supplier system that match middle-class consumers, and leveraging Alibaba's omnichannel capabilities to enhance store services, better serving middle-class families and quality-seeking young people.
This approach would: first, provide a transformation path for hypermarkets at a crossroads, helping to boost morale and potentially improve performance; second, involve relatively low investment costs, enabling rapid store expansion and making up for lost time, while also revitalizing existing resources and offering consumers a new experience; third, effectively tap into the new customer segment of middle-class consumers, who have strong purchasing power and are the 'hot commodity' that supermarkets compete for, while membership fees could also become a significant revenue stream.
However, to date, domestic pioneers in this area have not yet delivered convincing results. Looking at the actual operations of various membership club brands in the market, apart from Sam's Club and Costco, which have deep experience and operational heritage in membership clubs, few local latecomers have publicly disclosed profitability metrics; everything is still in the cultivation and adjustment phase.
RT-Mart, which once ran hypermarkets successfully, is still a novice in the membership club track. Its past glory is behind it, and what awaits RT-Mart are new challenges. Whether it can succeed and create a 'New RT-Mart' will require RT-Mart's efforts and wisdom, as well as understanding and encouragement from the industry.
Source: Longshang.com Supermarket Weekly (ID: cacszk), Author: Lai Zhangping


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