---
title: "Snack Discount Retailers in 2024: Small Brands Exit, Giants Aim for 'Terminal Dominance'"
description: "The snack discount retail industry is entering a new competitive phase, marked by the formation of a leading tier. In June, the MMHP Group, formed by Snack Busy and Zhao Yiming Snacks, surpassed 10,000 stores and now exceeds 14,000, while the second-place Wanchen Group is close to that threshold. Meanwhile, mid- and lower-tier brands face squeezed survival space, with some franchise stores incurring losses and closures, fueling industry skepticism."
author: "楚勿留香"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-12-06"
language: "en"
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# Snack Discount Retailers in 2024: Small Brands Exit, Giants Aim for 'Terminal Dominance'

> The snack discount retail industry is entering a new competitive phase, marked by the formation of a leading tier. In June, the MMHP Group, formed by Snack Busy and Zhao Yiming Snacks, surpassed 10,000 stores and now exceeds 14,000, while the second-place Wanchen Group is close to that threshold. Meanwhile, mid- and lower-tier brands face squeezed survival space, with some franchise stores incurring losses and closures, fueling industry skepticism.

The snack discount retail industry is entering a new competitive phase. A landmark event is the basic formation of the leading tier: in June this year, the MMHP Group, formed by Snack Busy and Zhao Yiming Snacks, became the first to surpass 10,000 stores, and has now exceeded 14,000 stores. Behind it, the second-place player, Wanchen Group (parent of Haoxianglai), is reportedly close to crossing the 10,000-store threshold. On the flip side, the survival space for mid- and lower-tier brands is being further squeezed, with some franchise stores experiencing losses and closures, fueling skepticism about the industry. The industry is accelerating its shakeout, with a clear gap between the first and second tiers. Scale advantages are prompting leading brands to gradually adjust their competitive strategies, shifting focus from scale to profitability. In other words, the snack discount retail industry is moving from the 1.0 version of "channel dominance" to the 2.0 version of "terminal dominance." At the storefront, "terminal dominance" is reflected in product quality, price, and service; at the backend, it is reflected in the entire supply chain, with competition on supply chain efficiency, refined operations, and digitalization. Just as Didi emerged from the ride-hailing race and Meituan survived the "group-buying wars," after industry elimination, brands with scale advantages and a focus on efficiency, innovation, and consumer value will ultimately go further in this track.

**Snack discount retail moves from 1.0 to 2.0**

In the early days, snack discount stores relied on a "low price + high volume" model, optimizing channel premiums to achieve higher sales per square foot. This can be called the 1.0 version of snack discount retail. In the 1.0 era, snack discount brands were all doing one thing: expanding store networks to seize offline locations. The essence of snack discount retail is small profits and quick turnover; the ultimate goal of channel expansion is to enlarge scale advantages to secure higher turnover efficiency and product pricing power in the supply chain. At that time, the rise of snack discount stores was not merely against similar offline channels and formats, but against various formats including e-commerce, supermarkets, and convenience stores. The rise of the snack discount industry was somewhat inevitable, driven by both consumer demand and market supply. From a macro demand perspective, economic growth slowed, consumption downgraded, and especially after the pandemic, consumer habits changed significantly. From 2022 to 2023, consumer confidence was low, savings propensity increased, driving the popularity of discount consumption. In short, consumers became "savings-oriented, consumption-light," preferring to spend less or buy high-value-for-money products. Snack discount stores, with their "extreme cost-performance" positioning, perfectly catered to this trend. From a market supply perspective, snack manufacturers also needed new channels to create incremental growth: first, traditional e-commerce dividends peaked, online customer acquisition costs were high, and the industry entered a stage of stock competition; second, traditional supermarket channel costs were high, with various entry fees and barcode fees remaining elevated. Snack discount stores met consumer needs with a more efficient supply chain and provided manufacturers with new growth channels. Compared to traditional supermarkets or convenience stores, snack discount stores typically offer prices about 30% lower. The core reason is that snack discount stores bypass the traditional distributor model, sourcing directly from manufacturers, shortening the supply chain and reducing costs. Additionally, snack discount stores do not pay entry fees, barcode fees, display fees, or other miscellaneous charges, and have no payment terms, typically using a "cash on delivery" model, which is favored by upstream manufacturers and allows them to obtain lower-priced goods. It is this high alignment between supply and demand that has enabled the rapid nationwide expansion of the snack discount industry. They have carved out a "piece of the pie" from traditional e-commerce, traditional snack stores, supermarkets, and convenience stores, and have grown stronger. Especially from 2022 to 2023, the industry entered a fast track, with frequent mergers and acquisitions among brands. The most representative event was the merger of Snack Busy and Zhao Yiming Snacks into the MMHP Group in November 2023, making it the industry leader. Currently, leading snack discount companies have established advantages that mid- and lower-tier brands find hard to replicate or surpass:

1. **Large store scale**: Scale effects reduce marginal costs.
2. **Supply chain advantages**: Continuously optimize supply chain efficiency to ensure cost leadership.
3. **Efficient store management**: Achieve refined operations, improving sales per square foot and service quality.
4. **Brand influence**: Enhance consumer trust and loyalty.

Therefore, the competitive landscape of the snack discount industry is bound to shift from scale and price-driven to quality and efficiency-driven, focusing on refined operations, supply chain efficiency, digital upgrades, and polishing the profitability model of terminal stores.

**Intensifying competition**

**The snack discount market is still growing**

Compared to leading brands, mid- and lower-tier brands are under increasing survival pressure, with many franchise stores experiencing losses or closures. For example, Wang Qiang (pseudonym) from Binzhou, Shandong, franchised a regional brand snack store in a small town, but just over a month after opening, he wanted to transfer the store. "Because after opening, business was never good," Wang said. He chose to franchise a snack store because in the county town, big brands like Zhao Yiming and Snack Busy had opened several stores with good business. But the county town was saturated, so he chose to open in a town with less competition. However, shortly after his store opened, two more snack stores opened in the town, intensifying competition. After opening, business was not as booming as the snack discount stores in the county. "Now I sell about 700 yuan a day, with a gross margin of about 16%. After deducting monthly rent of 1,700 yuan, wages for two employees at 2,300 yuan each, plus utilities, it's a definite loss-making business." What made Wang regret even more was that although there was no franchise fee, the supplies, materials, and shelves required for opening had to be purchased from the headquarters, and the purchase prices were not cheap. For example, a certain brand of beverage sells for 3.2 yuan at Zhao Yiming in the county, but the purchase price from the regional brand headquarters is 3.4 yuan, with no price advantage at all. With intensifying competition and no price advantage, Wang ultimately had no choice but to transfer the store, otherwise he would lose more. Reflecting afterward, Wang admitted he was too hasty, eager to embrace the trend, choosing the right track but the wrong brand. Franchisees like Wang are not isolated cases; in many county and township markets, losses and closures after franchising regional brand snack stores are common. The reason is simple: **regional brand snack stores lack supply chain advantages and cannot even guarantee basic price competitiveness. Low consumer trust and inadequate management capabilities doom them to be eliminated in fierce market competition.** The increase in store closures in lower-tier markets has been interpreted by outsiders as a sign that the snack discount market is saturated. There have also been many comments that snack discount stores have entered vicious competition or that the snack discount store model is failing. In reality, when old stores close, new ones open, and newer store formats emerge. This cycle reflects the heat of the track—**the snack discount market is still growing**. According to a research report by CICC, the snack discount industry still has room to double in size over the next 3 to 5 years, with broad development prospects. The current number of stores in the industry is about 30,000. CICC estimates through three methods that the industry's store space could reach 60,000 to 80,000, with huge growth potential. Some also believe the national market can accommodate 150,000 stores. In contrast, Huachuang Securities' estimate is more conservative, expecting 50,000 to 60,000 stores in the future. The opening pace of leading snack discount brands further proves this growth trend. As of November this year, the MMHP Group's store count has exceeded 14,000, while in November last year, when Snack Busy and Zhao Yiming Snacks merged, they had only about 7,000 stores. In one year, the store count doubled. More critically, leading brands continue to open stores, attracting new franchisees. However, these new stores are also iterated and evolved versions. While continuously opening stores, leading snack discount companies have also been at the forefront of innovation. For example, Snack Busy opened themed stores like "Snack Big" and "Snack Spicy" in Changsha this year, exploring further in sub-category formats. Similarly, some brands have begun to test "discount and wholesale supermarkets," signaling proactive change and transformation in the face of intensifying market competition. In fact, each iteration precisely captures changes in industry sub-markets and consumer demand. Snack discount companies are using the "Snack + N" model to provide consumers with more diversified and personalized choices, and to lead the industry's competition into new dimensions, focusing more on innovation, consumer experience, and value for money, rather than simple scale and price wars.

**Price wars will continue**

**But not for long**

After leading brands reach the 10,000-store scale, price wars will continue for a while but cannot last long, as they ultimately harm the interests of both brands and franchisees. More importantly, **when the first tier becomes more stable, the snack discount market will enter a period of balanced development with normal prices**. Pan Jinju, founding partner of Kuanzhai Venture Capital, told the author that with the continuous growth in the number of snack discount stores, "if franchisees continue to lose money, the total number of leisure snack stores will inevitably decline, which is also a certainty. Eventually, it will slowly reach a state of relative balance between cities and store numbers." "In a city, there is an upper limit to the daily demand for leisure snacks. If stores open so rapidly in each city and exceed the total demand, there will be a process of survival of the fittest," Pan said. Now people see the lively state of snack discount retail, but we must return to the essence of business. In her view, snack discount retail must pay more attention to the actual profitability of stores, including rent, gross margin structure, foot traffic, average order value, and other data. The core is whether stores can achieve scale profitability. This is precisely the refined operation of "terminal stores" emphasized in the 2.0 version of snack discount retail. For the physical retail industry, opening and closing stores is inherently a dynamic adjustment process. The market eliminates inefficient or loss-making stores and retains profitable ones. Over time, the proportion of profitable stores will continue to increase. **This is essentially a store selection strategy and a process of survival of the fittest.** If we look at a longer time frame of two to three years or more, it is this competition that drives market participants to innovate and improve efficiency, and also concentrates resources on leading brands. But for small and medium snack brands, they need to pursue differentiation to have more survival space. For example, "Qihuo Street" has carved out its own survival space by transforming into a family food preferred store. "No industry can have only one business model, nor can it have only one brand. The competition is indeed fierce now, and small brands find it hard to survive," said Zhang Yuhai, founder of Qihuo Street. "As long as you adhere to consumer value and take a differentiated path, you can survive."

Undoubtedly, snack discount stores will continue to iterate into 3.0 and 4.0 versions, such as snack discount stores entirely composed of private labels, comprehensive stores that expand leisure food to family food, and intelligent store management models centered on AI and big data. What is certain is that from the rise of snack discount retail to rapid development and the formation of a pattern with significant gaps between the first and second tiers, it has only taken two to three years. This market is far from saturated. On the contrary, **it is poised for the next round of more exciting iteration.**


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