The launch of the 'Community Quality Life Center' marks the formal 'de facto demise' of Carrefour, once a hypermarket giant. Is this the right path? It will take time, financial resources, and Carrefour's fate to verify. For more local retail enterprises, where does the fundamental transformation lie? Carrefour's assets have been significantly impaired. Suning's 'major surgery' on Carrefour stores is accelerating its exit from the frontline hypermarket brand competition. On April 14, Suning.com's revised 2022 performance forecast announcement showed that the latest estimated net loss attributable to shareholders of the listed company increased to 15.5 billion to 16.5 billion yuan; the loss expansion was mainly due to asset impairment of Carrefour during the period. Suning.com is accelerating the closure of some Carrefour stores in certain cities, while focusing on the integration of Carrefour stores in advantageous urban areas with Suning.com's business formats. This refers to the 'Community Quality Life Center' store upgrade plan that Carrefour launched two weeks prior. On March 31, the first batch of Carrefour stores upgraded to 'Community Quality Life Centers' officially opened at Shanghai Gubei and Beijing Shuangjing stores. According to Carrefour's plan, the new format is positioned to provide near-field community family scenario services, forming a comprehensive commercial entity integrating retail, dining, services, and entertainment as a 'store-visit format'. The key points of this upgrade and renovation are: first, significantly streamline and optimize the product structure of the hypermarket model and reshape the supply chain; second, reorganize the store format and broaden store service functions; third, introduce Suning.com's home appliance hypermarket. On the surface, the aspects of Carrefour's upgrade and renovation represent the industry's development direction, creating a near-field retail community quality life center, but the 'no problem' in direction is also the big problem of Carrefour's 'plans hard to become reality': First, the 'Community Quality Life Center' covers too many formats and requires a long period of trade area cultivation, not just opening with a ceremony; second, as a hypermarket enterprise, Carrefour should focus more on improving core business capabilities. Whether to continue positioning for the mass consumer group or to segment customers and meet the one-stop life needs of the middle class is unclear; third, introducing Suning.com's home appliance hypermarket and multi-format combination objectively weakens Carrefour's business share, making Carrefour's supermarket business harder, with suspicion of 'sacrificing the knight to save the rook'. 'Piecing Together' Cannot Create Competitiveness The multi-format, multi-scenario combination is the biggest feature of Carrefour's store upgrade and renovation this time. To achieve this, Carrefour significantly reduced hypermarket products. It is said that SKUs were cut from 25,000 to 12,000, and suppliers were also significantly reduced. Undoubtedly, its product richness and customer appeal will be discounted, and it also seems to let the industry understand why Carrefour hypermarkets generally experienced large-scale out-of-stock during the Spring Festival. Whether Carrefour actively screened and abandoned a considerable number of suppliers, or suppliers voluntarily withdrew, the result is that Carrefour can hardly possess the profitability, functionality, and customer appeal that a hypermarket enterprise should have, which is still very important operational capability in many market regions and trade areas. In other words, Carrefour has objectively segmented and filtered customer groups by significantly reducing suppliers and products, but whether this segmentation positioning is attractive enough to its desired target customers is hard to say. For example, it launched prepared dishes zones, small appliance zones, and private brand Suning Yipin zones, but the functionality and customer appeal of Carrefour's supermarket sector have been greatly reduced. Carrefour stores, often with a scale of 20,000 square meters, after store optimization, the supermarket only occupies 6,000 square meters, leaving enough space to introduce multiple formats for functional expansion, which is what Carrefour calls the 'Community Quality Life Center'. From the two so-called model stores Carrefour has launched, the main format combinations are as follows: first, expand the dining sector, introducing prepared dishes zones, food stalls, and opening dine-in areas; second, introduce community service formats such as repair, laundry and tailoring, and beauty salons, but currently Carrefour stores' community service formats are not rich, and some external rental areas are still under recruitment; third, introduce Suning.com's home appliance store, occupying half of the store, turning Carrefour hypermarket into Suning's main business home field. In the view of Longshang.com Supermarket Weekly, Carrefour's 'Community Quality Life Center' renovation this time has little novelty, and more importantly, it does not represent an improvement in Carrefour's main business operation capability or level, nor is it the best way to reverse the decline. First, supermarket + dining cannot save Carrefour. The combination of dining and supermarket is a model that has existed for many years. Initially, restaurants were introduced in external rental areas, and later dine-in areas were opened in the store, but few enterprises have successfully operated 'supermarket + dining' as a corporate advantage. It is more about appropriately introducing dining based on the characteristics of the store's trade area. Moreover, Carrefour, including Suning, has not shown the industry any resources or professional advantages in dining. Second, the introduced community service formats, objectively speaking, vary greatly in different trade areas, and require a certain period of cultivation and screening, and also rely on the main format to bring customer traffic. Moreover, the attributes of community service stalls and small shops determine that they are more service functions, bringing minimal commercial value. In the era of fragmented consumption, their own survival and profitability are big problems. Third, Suning.com's hypermarket entering Carrefour. Previously, Carrefour introduced Suning.com's home appliance zone with lukewarm results. This time, Suning.com occupies at least half of Carrefour's store area, which is somewhat a helpless move due to the store being too large. The supermarket business, originally the main format of the store, has been reduced to a composite of prepared dishes zones, dine-in, private brands, fresh produce, and regular categories. After category restructuring, which one can represent the core competitiveness of its supermarket format? From the large-scale out-of-stock during the Spring Festival, the introduction of state-owned capital strategic investment, to the recent landing of two 'Community Quality Life Center' stores, if Carrefour's transformation and upgrade enters the full implementation stage, it means that Carrefour's competitiveness as a hypermarket enterprise is formally lost. What its new core competitiveness or operational model advantage is, no one, at least for now, can give an answer. In this way, Carrefour's remaining more than 100 stores in the domestic market will gradually transform into Suning.com's main battlefield. As pointed out in the previous report of Longshang.com Supermarket Weekly, the Carrefour that was a foreign retail giant has long ceased to exist. Carrefour's current situation is also the inevitable result of the continuous growth, maturity, counterattack, and iteration of China's retail industry, especially local retail enterprises. Foreign retail enterprises have their advantages and missions, but exit is destined to be their final destination. Local retail enterprises also have their own characteristics and irreplaceable advantages because they only have survival and bankruptcy, no retreat. Looking at the current domestic market, first, we must confirm how many domestic enterprises have the ability to truly capture and satisfy the 'middle-class, high-end consumer groups'? For most local enterprises, understanding the industry landscape, clarifying their own positioning, and telling the story of local enterprises in China's retail industry is fundamental. Tell Your Own Story Well From Carrefour and Walmart in the past to Costco and Sam's Club today, these waves of foreign retail giants have always occupied the first opportunity in the Chinese market, satisfying and harvesting the most high-quality top consumer groups in our market. And once local regional retail enterprises in China grow up, when the high-quality middle-class customer group is no longer interested in the 'hypermarket' story, that is the era when these foreign enterprises lose competitiveness and leave. I believe that in the future, Costco and Sam's Club membership formats will also have the same ending. When local retail brands truly grow up, leaving will also be their outcome. Of course, by then, there may be new format models that attract domestic high-quality middle-class consumer groups. As local regional retail enterprises, watching the 'changing winds and clouds' of the domestic retail industry over the years is also a process of gradually clarifying their own positioning and telling our own stories well. First, local regional retail enterprises should tell the story of people's livelihood positioning. Local regional retail enterprises, especially small and medium-sized ones, must first tell the story of the livelihood consumption of the majority of ordinary local people, such as 'three meals a day, daily necessities'. Such positioning is the foundation for the sustainable existence of regional small and medium-sized retail enterprises. Our efforts should only be to do better and longer based on such positioning, rather than abandoning the foundation, being impetuous, or even abandoning such positioning to pursue so-called innovation, segmentation, high-end, and top markets. That is not the mission and strength of ordinary regional retail enterprises. Second, local regional retail enterprises should tell the story of quality products. In the past, local 'grassroots' retail enterprises that imitated and learned from foreign retail giants have now mostly grown into local retail giants and become regional leaders. Why can't the former foreign 'masters' compete with local leaders? First, these foreign giants always target only 'quality consumers', interested in first opportunities and blue oceans. Satisfying the 'three meals a day' of ordinary people is not their strength or market strategy. Second, local regional retail enterprises are becoming stronger, telling the story of safe, quality local specialty products, making local retail enterprises' quality awareness, quality capability, and quality resources more and more confident. More and more regional small and medium-sized retail enterprises are paying attention to food safety, green health, and quality consumption, and have begun to unite to lead their own high-quality product supply chain systems. Letting hundreds of millions of ordinary Chinese people live a quality and beautiful life is the value and mission of China's local retail, especially regional retail enterprises, for long-term existence. Third, local regional retail enterprises should have the determination and courage to watch the changing winds and clouds and live as century-old enterprises. Foreign capital targets the 'top', innovation and capital target the wind, but the 'top' quality consumer groups always pursue differentiation and novelty. There is no doubt that Costco and others will also be replaced by domestic retail brands one day, and newer foreign format brands may come again. At the same time, various format innovation trends driven by technology and efficiency will be increasingly quickly applied to the entire retail industry. What local regional retail enterprises need to do is to do the fundamental work of people's retail and livelihood retail, making the basic needs of 'three meals a day, clothing, food, and transportation' more quality and efficient. Now, facing the advantages of abundant product supply resources from upstream manufacturing industry chains, regional retail enterprises should have the confidence and courage to lead and organize product industry chains with local characteristics and their own characteristics, based on localized demand, leading local consumption characteristics. They should value fresh produce, deepen regional operations, strengthen the basics, and live with the style of century-old enterprises.