--- title: "Supermarkets in County Towns Are Increasingly Struggling" description: "Once indispensable in county towns and townships, small and medium supermarkets are now facing an unprecedented survival crisis. With daily revenue as low as 1,000 yuan and weekly sales of a single bottle of shampoo, the decline is stark. The article analyzes the causes, including the shift to online shopping and the rise of community group buying, and suggests strategies for survival, such as supply chain reform and exploring larger supermarket formats in lower-tier markets." author: "程信" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2025-05-24" categories: "Retail Formats" language: "en" canonical: "https://xinjignxiao.com/en/articles/supermarkets-in-county-towns-are-increasingly-struggling-528c01f9/" markdown: "https://xinjignxiao.com/en/articles/supermarkets-in-county-towns-are-increasingly-struggling-528c01f9.md" original_source: "https://mp.weixin.qq.com/s/H8-dhNBx9mXZv8p1g9biAw" translation: "https://xinjignxiao.com/zh/articles/%E5%8E%BF%E5%9F%8E%E7%9A%84%E8%B6%85%E5%B8%82%E7%94%9F%E6%84%8F%E8%B6%8A%E6%9D%A5%E8%B6%8A%E9%9A%BE%E5%B9%B2-528c01f9.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/supermarkets-in-county-towns-are-increasingly-struggling-528c01f9/" citation: "程信. “Supermarkets in County Towns Are Increasingly Struggling.” New Distribution, 2025-05-24. https://xinjignxiao.com/en/articles/supermarkets-in-county-towns-are-increasingly-struggling-528c01f9/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Supermarkets in County Towns Are Increasingly Struggling > Once indispensable in county towns and townships, small and medium supermarkets are now facing an unprecedented survival crisis. With daily revenue as low as 1,000 yuan and weekly sales of a single bottle of shampoo, the decline is stark. The article analyzes the causes, including the shift to online shopping and the rise of community group buying, and suggests strategies for survival, such as supply chain reform and exploring larger supermarket formats in lower-tier markets. **Source** | Winning Power Once, in the alleys of county towns and townships, small and medium supermarkets were an indispensable part of residents' lives. They were like capillaries, delivering vitality to local consumption and propping up half of the county-level consumer market. Today, however, these supermarkets, which carry the life memories of countless people, are experiencing an unprecedented survival crisis. A battle for life and death has already begun. **Declining County Town Business** "Daily revenue is 1,000 yuan, and we can't sell a single bottle of shampoo in a week..." A supermarket owner in a fifth-tier county town in Henan, sitting in his quiet store, reviewed his business experience with the author. He said that because the environment for migrant workers has been poor in the past two years, he quit his factory job in another city at the beginning of the year. With his family's help, he invested 100,000 yuan to open a supermarket in his hometown, hoping to realize his long-held dream of starting a business. But he didn't know the reality until he tried. Supermarket profits are actually very low, with an average gross margin of only about 15%. For example, a bottle of soy sauce priced at 10 yuan yields a profit of only 0.9 yuan. For fresh goods like pork, vegetables, and fruits, after accounting for daily losses and waste, there is basically no profit. The main source of profit is cigarettes and alcohol. But because his supermarket has a low cigarette quota, the tobacco company supplies him with very few cigarettes, especially the popular brands that sell well; he only gets a few cartons each week. As for alcohol, the profit on white liquor is decent, but as the weather gets hotter, white liquor doesn't sell well; he can only sell a few cases of beer a day. **The most critical point is that the difficulty of running a supermarket is not due to low profit margins, but because daily revenue is too low!** There are six supermarkets on this street, and I observed that their business is similar. The reason is that most people now shop online for daily necessities like shampoo, toothpaste, toothbrushes, and tissue paper. My supermarket can't sell a bottle of shampoo in a week, and food items like milk and biscuits are picked up in whole boxes from the courier store. Even vegetables can be bought through Meituan Select. Today, including WeChat, Alipay, and cash, the revenue is only 1,000 yuan! After deducting rent and utilities, I only earn a few dozen yuan a day. It wasn't even this much at the beginning. This income is far less than what I earned at the factory. I now want to go back to work in another city, but I've invested 100,000 yuan and don't want to lose it, and it's hard to transfer the business. So I have to keep going and hope for a turnaround. **The Collapse of the Maginot Line** Since the mask era began in 2020, the supply guarantee tasks during lockdowns and the panic buying and stockpiling after reopening were the last carnival for physical supermarkets. Because staying at home taught more people to shop online, and at the same time, the high prices of supermarket goods, driven by costs, were exposed to the public. **It's not so much that the popularity of the internet and the use of digitalization were the last straw that broke the camel's back for physical supermarkets, but rather the backlash of the entrenched rent-seeking model that was the fatal blow to physical supermarkets.** If online e-commerce satisfied fragmented shopping needs, then community group buying's price attacks on big-ticket items and relatively convenient delivery services, coupled with the aggressive expansion of various money-burning platforms, shifted the main customer base of offline supermarkets—housewives—from discussing which supermarket had cheaper eggs to which platform had what hot products. This change in shopping habits initially did not attract the attention of physical supermarkets, which looked forward to a "revenge" consumption rebound after the mask era. **But unexpectedly, the "revenge" consumption never came; instead, they faced the "revenge" of significantly declining sales and profits.** The triple dividends of decades of population growth, economic growth, and urbanization came to an abrupt halt at this moment. The slow-witted looked up to the sky, hoping for the old days to return and for manna to fall from heaven, while the agile sensed the crisis and began to take action, walking the path of others to leave them with no way out. When "involution" became a concrete action, the profit model based on charging shelf fees was like the Maginot Line, which France took 12 years to build and claimed to be impregnable, but was as thin as a cicada's wing and unable to withstand the German armored onslaught. The upgrade of warfare concepts and rapid technological development dealt a dimensionality-reducing blow to traditional models, against which there was almost no resistance. The business world is like a battlefield. In the past two years, the brutal treatment of traditional supermarkets by emerging forces represented by snack food discounters is a living example. **The Way Out for County Town Supermarkets** The plight of physical stores is essentially the pain of economic transformation. **But within the crisis lies opportunity: policy dividends, new consumer demands, and technology-enabled upgrades will open new windows for those who follow the trend.** Just as the 2008 financial crisis gave rise to the e-commerce boom, the economic situation in 2025 may be nurturing the next batch of "super species." Currently, the pursuit of value for money is clearly the most obvious change in consumer behavior. Of course, the "discounting" behavior of supermarkets should not be a vicious competition of chasing the lowest price without limits, but rather a strategic price adjustment. Specifically, behind this adjustment is a reform of the supply chain, including direct sourcing from production areas, reducing transportation and storage losses, streamlining human resources, and developing private labels. These measures help reduce costs, thereby providing room for price reductions. Therefore, the extent of low prices also reflects, to a certain degree, the maturity of the supply chain. To lower prices while maintaining profits undoubtedly requires a strong supply chain and bargaining power. Supermarkets should think about who they are selling to. The supply of goods can no longer be simply from distributors or suppliers with credit terms and markup pricing; clearly, that era has passed. **The true low-price strategy is to ensure that even with lower selling prices, you can avoid losses and obtain sufficient gross profit.** In this process, the most critical thing is to improve supply chain efficiency. A person in charge of an agricultural product base once revealed that after cooperating with supermarkets without intermediaries, directly delivering goods to warehouses and stores can reduce logistics and storage losses by about 35%, and part of the saved costs is used to benefit consumers. In addition, many supermarkets are now adopting more flexible settlement methods to deepen cooperation with suppliers. This shift enables supermarkets to adapt quickly to market dynamics and effectively update and adjust their product mix. This not only reflects the supermarket's enhanced bargaining power in the supply chain but also helps further reduce operating costs by negotiating more favorable settlement terms, thereby increasing profit margins. Besides achieving truly long-term low prices, expanding into larger supermarket formats in fourth- and fifth-tier cities or even more down-market counties is also a direction that many retailers are exploring and achieving good results. How to seize the dividend period of large supermarket operations in county towns? One important point is whether the closed loop has been completed. Of course, there is a premise here: the local competition is not too intense, and the competitive environment is not fierce. Conclusion: In today's era, any industry may face the impact of new business formats and models. In this supermarket industry full of changes, only bosses who are willing to innovate and dare to try can break through and survive in this "wave of transformation." --- ## Citation metadata - Publisher: New Distribution - Author: 程信 - Published: 2025-05-24 - Canonical: https://xinjignxiao.com/en/articles/supermarkets-in-county-towns-are-increasingly-struggling-528c01f9/ - Original source: https://mp.weixin.qq.com/s/H8-dhNBx9mXZv8p1g9biAw ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671