Introduction: With increasingly diverse channels and intense competition both online and offline, succeeding in snack bulk retail stores is no easy feat.

Author | Gou Gou Review | Gou Gou Layout | He Wen

In recent years, snack bulk retail stores have provided people with a rich variety of flavors and low prices, seemingly becoming a new trend. Brands like Snacks Busy (零食很忙) and Snacks Youming (零食有鸣) have developed their own models and secured capital financing. Most snack bulk retail stores are located near communities, with store areas typically exceeding 100 square meters. Products are mostly displayed in bulk, and snack lovers passing by are attracted by the bright decor and dazzling array of goods, often unable to resist going in for a browse. The products are already inexpensive, and some stores also run regular promotions to attract steady foot traffic.

Many see business opportunities and rush into this track. However, due to thin profit margins and numerous competitors, opening a snack bulk retail store is not easy. Several distributors have told New Distribution that their snack bulk retail stores did not achieve the expected results. Operators need to pay attention to market research, site selection, supply sources, and brand promotion, and must have strong management, supply chain, and product selection capabilities. At the same time, they need deep consumer insights, continuously monitor market changes, and adjust strategies promptly to maintain competitiveness and long-term stability.

There may be differences in strategy between single stores and chains. As snack bulk retail chains continue to expand aggressively, the next five years may be the industry's main battleground, so this article focuses on analyzing snack bulk retail chains.

Why Are Snack Bulk Retail Stores So Popular?

Retail has evolved from supermarkets to e-commerce, and now to snack bulk retail stores and discount stores—each iteration is a channel upgrade. In the 1990s, foreign supermarkets entered China, replacing department stores, increasing supply, and offering consumers more product choices. By 2010, e-commerce rose, providing cheaper and more convenient shopping. Since 2016, hypermarkets have declined, and retail channels have entered a decentralized era, giving rise to warehouse club supermarkets, community convenience stores, flash sale discount stores, and other new retail formats that offer better value for specific segments.

As channels change, the retail industry has shifted from product-centric to people-centric. From initial supply shortages to today's abundance, consumers have more choices. Merely focusing on products is no longer enough; services must also improve to differentiate and provide personalized shopping experiences.

Specifically, why are snack bulk retail stores popular with the public now?

1. Snacks as a Fourth Meal

First, the snack industry is increasingly important to consumers. The snack market is showing "fourth meal" characteristics—high frequency and essential demand—and consumer tastes are no longer one-dimensional. Snack bulk retail stores emerged in this context, meeting the demand for small portions and variety. In recent years, the market has grown explosively, becoming a golden track exceeding one trillion yuan. It grew from 822.4 billion yuan in 2016 to 1,401.5 billion yuan in 2021, with a compound annual growth rate of 11.3%. Snacks now satisfy more dimensions of consumer needs, including emotional, hedonic, and health demands, making them increasingly important.

2. Advantages of Snack Bulk Retail Stores

Second, snack bulk retail stores have advantages over other snack channels. Around consumer experience, they excel in "more, faster, better, cheaper." They offer a wide variety of products at affordable prices, are located near communities, and are close to consumers—all key attractions.

Wide variety: Before snack bulk retail stores, brand stores like Liangpin Shop (良品铺子), Laiyifen (来伊份), and Three Squirrels (三只松鼠) mainly sold their own products. Snack bulk retail stores partner with various brands, offering a richer SKU assortment, primarily in bulk, with an array of small snacks that attract consumers. Traditional general stores are limited by space and shelf capacity, offering only a few dozen snack items; large supermarkets have tens of thousands of SKUs, but their snack selection still falls short of specialized vertical stores.

Better prices: Snack bulk retail stores are also more affordable. For example, Snacks Busy sells a bottle of Coke for 2.3-2.4 yuan, while KA supermarkets sell it for 3.5 yuan and Meiyijia for 4 yuan. According to Zhaimen Catering data, the average ticket price at snack bulk retail stores is 38 yuan, compared to 56 yuan at Liangpin Shop, 61 yuan at Laiyifen, and 70 yuan at Laoban Daren. In recent years, demand in lower-tier markets has been tapped, and the value-for-money advantage of snack bulk retail stores suits development in third- and fourth-tier cities, contributing to their market potential.

Image: Hua'an Securities

Close proximity: In terms of location, data shows that 80% of snack bulk retail stores are opened near communities. Communities are closer to consumers and have stable foot traffic. Especially during the pandemic, people preferred to consume within their living radius, and foot traffic concentrated near communities. National policies also promote community ecology, with standardized community facilities and mature ground-floor commercial ecosystems. After community group buying and fresh food e-commerce entered, community business districts have become hot spots for retail chains. The growing community ecosystem provides a good environment for snack bulk retail stores. As a supplement to meals, snacks are often the last stop in shopping. The closer the snack store, the more convenient for consumers. Additionally, community stores have much lower rents than mall or pedestrian street stores. According to Huachuang Securities research, snack bulk retail stores near communities are 25%-30% cheaper than traditional channels.

Beyond meeting consumer demand, snack bulk retail stores also meet the channel needs of snack manufacturers.

Snack bulk retail stores typically cooperate with manufacturers on a small wholesale basis, purchasing white-label and OEM products for profit. Correspondingly, their rise provides opportunities for small manufacturers. When community group buying emerged, some group leaders specialized in white-label products, and sales increased due to their endorsement. Similarly, influencer带货 relies on consumer trust, potentially leading to purchases of previously unknown products. Clearly, the power of channels has changed. White-label and OEM products usually cannot enter large supermarkets or malls. Brand snack stores open another sales channel for white-label products. Well-known snack manufacturers can also use snack bulk retail stores for offline expansion. For example, Yanjin Shop (盐津铺子) has partnered with major bulk snack brands like Snacks Busy, Snacks Youming, Laoban Daren, Tangchao, and Snacks Youxuan.

Snack bulk retail stores meet the needs of both consumers and suppliers, indicating significant market potential.

Cost Reduction and Efficiency: Key to Long-Term Success

Snack bulk retail is a high-volume, low-margin business, relying on low gross margins and high turnover. By lowering prices and gross margins, they attract traffic through product mix and value, surviving intense competition. For example, Snacks Busy has 1,600 SKUs per store, with research reports showing average daily sales of 13,600 yuan. They balance traffic-driving brands like Yanjin and Ganyuan with high-margin white-label products, achieving store profitability of about 8%, validating the single-store model. According to CITIC Securities, snack discount store headquarters have gross margins of about 8%-9% and net margins of about 1%-2%; terminal stores have gross margins of about 18%-20% and net margins of about 6%-7%. Although the average ticket price is half that of traditional retail, foot traffic is nine to ten times higher.

The advantage of snack bulk retail stores lies in variety and value, but differentiation in consumer positioning, product categories, and sales methods may be limited. Therefore, long-term success hinges on maximizing efficiency. This involves reducing costs at every stage, such as optimizing inventory management, lowering transportation and labor costs, improving efficiency, reducing waste, and streamlining the retail process. How can snack bulk retail stores achieve cost reduction and efficiency for long-term development? We divide development into two stages: from 0 to 1, the survival stage, focusing on capital planning, building a single-store model, and balancing costs and investment; after validating the single-store model, entering the 1 to 100 stage, strengthening backend supply chain capabilities to ensure smooth store replication.

In this process, leading brands have accumulated cost-cutting experience. Snacks Busy told New Distribution:

First, by leveraging scale, they directly connect with top domestic food manufacturers, shortening the transaction process and reducing procurement costs.

Second, through "zero-account-period cash procurement," they do not charge backend costs like entry fees, promotion fees, or display fees, gaining bargaining power in the supply market.

Third, through an efficient logistics system, they reduce logistics costs and losses.

1. Direct Manufacturer Connections, Removing Intermediaries

Specifically, snack bulk retail stores source directly from manufacturers, eliminating traditional intermediaries, making the supply chain more efficient, reducing stockouts and delays, and effectively lowering costs. Direct cooperation also ensures supply stability.

Image: Hua'an Securities

However, new entrants may only have access to small and medium manufacturers; directly connecting with brand owners may be difficult without scale advantages or industry connections.

2. No Burdensome Supplier Fees, Gaining Bargaining Power

Traditional retail, like supermarkets, often charges suppliers entry fees, display fees, and other costs, forcing suppliers to raise prices. Snack bulk retail stores do not charge such fees, instead gaining bargaining power and more profit.

3. Franchising to Share Costs and Building Logistics Systems

Additionally, most snack bulk retail chains currently expand through franchising or a "direct + franchise" model. After validating the single-store model, they can share costs with franchisees or take other measures to spread operational costs. More and denser stores also help reduce logistics costs, creating a more competitive environment. Operators can also build their own logistics systems, choosing logistics models and transportation methods, controlling delivery times, and improving efficiency.

Building a Snack Bulk Retail Empire: Essential Capabilities

Achieving the above is not easy. What capabilities do operators need? First, product selection; second, supply chain stability; third, management. Management should ideally have retail industry experience or deep insights. Additionally, for expansion to other regions, brands must understand regional consumer needs and have the ability to adapt nationally.

1. Product Selection and Quality Control

For example, Snacks Busy has always been clear in positioning, following the "delicious and affordable" route, offering quality products at low prices. To find qualifying products, they first investigate source factories, assess safety and quality, and then trial-sell selected snacks. Some consumers value first impressions; a poor first visit may deter future visits. For quality control, consider Liangpin Shop: even after years of OEM models, they cannot 100% prevent food issues. Thus, snack bulk retail stores must ensure a rich SKU while guaranteeing product quality—no easy task. Product selection requires thorough market research and screening, ideally establishing long-term relationships with qualified suppliers to ensure stable supply and select quality snacks loved by local consumers from around the world.

2. Supply Chain Construction

While building good supplier relationships, it is essential to ensure timely and accurate acquisition of goods and distribution to stores. This requires a robust supply chain system, including supplier cooperation, warehousing and logistics, inventory management, and distribution. It also requires demand forecasting and timely adjustments to procurement plans and inventory to avoid overstock or stockouts.

Image: Snacks Busy official website

Snacks Busy has built logistics and warehousing centers in Changsha, Hengyang, Nanchang, and Jingmen, with the Changsha central warehouse capable of handling 300,000 units daily. Efficient supply chain operations enable 24-hour delivery to stores nationwide. This warehousing and distribution system supports Snacks Busy's national expansion. In just a few years, Snacks Busy has reached 2,000 stores.

3. Internal Management

Of course, product selection, supply chain construction, and store operations are all related to internal management. Efficient management is key to true cost reduction and efficiency. Snacks Busy adheres to a clean policy; franchisees and suppliers do not need to worry about personal relationships when doing business, which benefits the company's overall development. Taking the similarly booming tea beverage industry as an example, poor management can lead to food safety issues in individual stores, damaging the brand's image.

With increasingly diverse channels and intense competition online and offline, rising rents and labor costs, and post-pandemic consumers seeking value while emphasizing personalization and quality, retail has become more complex.

Snack bulk retail chains, despite appearing low-barrier, require consideration of many aspects. The founders of several well-known bulk snack brands have retail industry experience, which may be a factor in their success. According to media reports, Snacks Busy founder Yan Zhou was once a franchisee of Leerle, a chain discount supermarket known for fast asset turnover, similar to snack bulk retail; Snacks Youming founder Li Shuyu has over a decade of offline chain store experience; Zhao Yiming Snacks founder Zhao Ding and Dai Yonghong founder Dai Yonghong both started in the nut business before entering the snack store track. Staff from two snack brands told New Distribution that their companies have retail industry genes, with brand resources from the start, and one has its own logistics system, making the snack bulk retail business smoother. If you are unfamiliar with retail, thorough preliminary research is essential.

Final Thoughts

Despite the significant potential of the snack market, few brands truly succeed. As a new model in the industry, snack bulk retail stores face considerable challenges to success.

Image: Hua'an Securities

Currently, bulk snack brands are not highly concentrated, scattered across regions: Snacks Busy is strong in Hunan, Snacks Youming is based in Sichuan, and Tangchao is based in Fujian. As brands expand, competitive pressure multiplies. According to media reports, some regions have seen store closures. The more so, the more important to be prepared, cautious, and ensure your capabilities are solid.