---
title: "Survival Strategies for Supermarkets Amid the Pandemic"
description: "Since the lockdown of Wuhan on January 24, supermarkets have been operating on the brink of survival. As the main sales channel for daily necessities, if supermarkets fail, people's livelihoods are at risk. We must care about economic recovery as well as food and vegetables. Supermarkets, especially small and medium-sized ones, face enormous challenges: on one hand, a surge in demand for daily necessities; on the other, severe overstock of holiday gift boxes. This article offers practical advice from retail expert Huang Biyun on how to 'save lives, cure diseases, and maintain health' during this crisis."
author: "刘润"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-02-13"
categories: "Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/XoHVHy9nj0mPGl6g_Urkhg"
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attribution: "New Distribution — https://xinjignxiao.com/en/articles/survival-strategies-for-supermarkets-amid-the-pandemic-f860353f/"
citation: "刘润. “Survival Strategies for Supermarkets Amid the Pandemic.” New Distribution, 2020-02-13. https://xinjignxiao.com/en/articles/survival-strategies-for-supermarkets-amid-the-pandemic-f860353f/"
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---

# Survival Strategies for Supermarkets Amid the Pandemic

> Since the lockdown of Wuhan on January 24, supermarkets have been operating on the brink of survival. As the main sales channel for daily necessities, if supermarkets fail, people's livelihoods are at risk. We must care about economic recovery as well as food and vegetables. Supermarkets, especially small and medium-sized ones, face enormous challenges: on one hand, a surge in demand for daily necessities; on the other, severe overstock of holiday gift boxes. This article offers practical advice from retail expert Huang Biyun on how to 'save lives, cure diseases, and maintain health' during this crisis.

Since the lockdown of Wuhan on January 24, the supermarkets we visit daily have been operating on the brink of life and death.
**Supermarkets are the main sales channel for daily necessities; if supermarkets die, people's livelihoods may be in trouble.**
We must care about economic recovery, but also about food and vegetables.
Supermarkets, especially small and medium-sized ones, now face enormous challenges.
**On one hand, there is a surge in demand for daily necessities.**
Because of the lockdown and fear of being locked down, people rushed into supermarkets in a panic to stock up on daily necessities, emptying shelves in an instant. In many supermarkets, not even a leaf of vegetable was left on the shelves.
Although this phenomenon did not last long and supply quickly recovered, there is still considerable pressure on daily necessities demand in the short term.
**On the other hand, there is a severe overstock of holiday gift boxes and other seasonal items.**
These products are large in quantity, high in unit price, and time-sensitive. After the seventh day of the Lunar New Year, they are almost impossible to sell, and now a large amount is stuck in inventory.
At the same time, the severe shortage of masks for frontline supermarket staff has worsened the overstock of holiday and non-essential items.
**Although supermarkets still have some cash income compared to other service industries, under the impact of the pandemic, it is difficult to balance expenses, and they are basically operating at a loss.**
What to do?
To address this issue, I specifically consulted Ms. Huang Biyun. She is a retail trainer, a business consultant for several domestic chain supermarkets, and a hands-on coach in the supermarket industry.
How can supermarkets, especially small and medium-sized ones, 'save lives, cure diseases, and maintain health'?
**-01- Save Lives**
**For supermarkets, February to March is the 'life-and-death gate'; you must, absolutely must, pass this gate.**
Survival is the most urgent and pressing matter. What to do?
Ms. Huang Biyun gave five suggestions to help supermarkets save their lives first.
> **1. Reduce unnecessary expenses. 2. Clear overstock inventory. 3. Maintain the supply chain. 4. Establish a temporary product handling center. 5. Understand financing channels and related policies.**
Let's look at each one.
**The first method: reduce unnecessary expenses.**
Due to the pandemic, customer traffic is limited, and customers are in a 'grab-and-go' mode when they visit stores.
Given this shopping behavior, supermarkets can shorten business hours and use food delivery platforms to ensure the sale of daily necessities.
For supermarkets with more than two floors, they can close non-essential floors and consolidate daily necessities on one floor to reduce personnel, utilities, and other expenses.
At the same time, negotiate with landlords to see if some rent can be reduced. In extraordinary times, we must overcome difficulties together.
**The second method: clear overstock inventory.**
Among the overstock items, the most troublesome are holiday gift boxes with expiration dates. These gift boxes mainly contain nuts, pastries, candies, and other snacks. Under the pandemic, people staying at home still have a great demand for such items.
You can convert these gift boxes into small packages. Or reduce the price and bundle them into 'stay-at-home snack packs' and display them on food delivery platforms.
In offline sales, you can reduce the price of opened gift boxes and place them near fresh produce and other daily necessity areas, so customers can buy them on the spot when needed.
What if it still doesn't work? Turn unsold items into giveaways; that's better than letting them rot and throwing them away.
**The third method: maintain the supply chain.**
As mentioned, February to March is the 'life-and-death gate' because demand for daily necessities is highest during this period. Supermarkets must ensure no stockouts.
**No stockouts. No stockouts.**
So first, integrate the supply capacity of existing suppliers. If supply is insufficient, quickly find ways to integrate supply resources through multiple channels. For example, cooperate with Alibaba's and JD.com's wholesale networks. In such special times, adopt a 'one product, multiple suppliers' approach.
At the same time, adjust the original 'small quantities, frequent deliveries' ordering method to 'increase order quantity per time, extend order intervals'.
This not only ensures you don't run out of stock but also gives suppliers a breather for stocking and delivery.
**The fourth method: establish a temporary product handling center.**
To process overstock items quickly, communication and allocation between store locations are crucial.
During the pandemic, the temporary handling center should be managed by dedicated personnel. In terms of time, first set a three-month overall coordination cycle, with weekly review cycles.
The purpose is to coordinate all interlocking tasks uniformly, avoiding overlapping work that causes labor and product losses.
**The fifth method: understand financing channels and related policies.**
To survive this crisis, money is essential. You need to know all kinds of fundraising channels, such as online loans, bank flow loans from ICBC, ABC, CCB, etc.
But don't panic and resort to private usury.
Currently, cities like Suzhou and Chongqing have introduced policies to help small and medium-sized enterprises overcome difficulties.
For example, deferring tax payments, reducing rent for SMEs, deferring social insurance contributions, reducing utility burdens, and deferring credit repayments.
I believe other provinces and cities may also introduce policies one after another; you should keep a close eye on them.
**Reducing unnecessary expenses, clearing overstock inventory, maintaining the supply chain, establishing a temporary product handling center, and understanding financing channels and related policies are the five life-saving methods.**
These methods may sacrifice some profit, but to save lives, they must be done. Don't wait. Act now. Save your life first.
**-02- Cure Diseases**
Now that life is saved, it's time to cure diseases.
Many supermarkets had expected 2020 to be a year of 'stable growth'. But after the pandemic, supermarkets need to make major adjustments to their 2020 business strategies in a short time.
**The development tone for supermarkets in 2020 will now basically be 'the general direction of daily necessities remains unchanged, with dynamic switching of small modules'.**
How to adjust specifically? **Focus on two aspects: fresh produce and online.**
**First, fresh produce.**
The pandemic has had a significant impact on the supermarket industry, but we found that supermarkets originally focused on fresh produce and daily necessities were less affected, or even saw growth instead of decline. This trend will continue.
So, this is an opportunity to leverage communities and lay out small fresh produce stores.
Why 'small' stores?
Because of the pandemic's impact, supermarkets' low-margin operations will continue for a while, and there are still hard times ahead, so don't spend money recklessly.
For stores over 1,000 square meters, unless you have more than 120% confidence, don't touch them. Expand cautiously.
**During this pandemic, many small restaurants that didn't rely on delivery will face a wave of closures, freeing up many small storefronts of 100-300 square meters, which are just right for fresh produce stores. This is also an opportunity for supermarkets to grow against the trend.**
**Next, online.**
During the pandemic, demand for daily necessities delivery surged. Supermarkets with community operations and delivery capabilities were less impacted. Many supermarkets that had been dragging their feet on cooperating with third-party delivery platforms reached cooperation agreements within a few days.
The online path must be accelerated.
But when small and medium-sized supermarkets accelerate their online path, there are two points to pay special attention to.
**First, standardization of fresh produce.**
For delivery, fresh produce must be packaged in standardized, fixed quantities. When renovating, supermarkets should focus on investing in equipment for the backend distribution center, mainly automated lines for cutting fresh meat and packaging fruits and vegetables in fixed quantities, replacing the less efficient manual packaging.
On the front end, replace bulk sales with pre-packaged, non-weighed fresh produce.
Standardization is key for online sales.
**Second, balance the prices of daily necessities.**
Under the pandemic, small family incomes are also affected, and customers are more price-sensitive about daily necessities.
For delivery, packaging costs will raise retail prices. Supermarkets need to find a balance between reducing packaging costs and accelerating fresh produce standardization to keep daily necessity prices stable.
Overall, supermarkets need major adjustments in their business strategies. For the whole year, it's basically 'the general direction of daily necessities remains unchanged, with dynamic switching of small modules'.
**Specifically, stabilize in the first half, introduce new things in the second half. More specifically, in Q1, focus on daily necessities; in Q2, maintain single products; in Q3, the pressure of new product launches eases, but restocking should still be in small quantities and frequent; in Q4, accelerate introducing new products to enrich the product mix through events like the Autumn Sugar and Wine Fair and the Imported Food Exhibition.**
**-03- Maintain Health**
Maintaining health means making the body healthier.
In the same pandemic, retail enterprises' response capabilities varied greatly. Some had vomiting and diarrhea, some died suddenly. But Pangdonglai in Xuchang, Henan, had the fastest and most thorough emergency response and measures, from orderly disinfection and protection measures to product organization, with no panic among customers entering the store.
**This is the difference in physical immunity.**
Life is saved, diseases are cured, and you want to exercise to prevent future problems. What to do?
**If you have the capacity, you can start from three aspects: people, money, and goods.**
**First, 'people'.**
People-oriented, you know how important it is without me saying.
Under the pandemic, the first consideration should be employees' right to life and health. These are basic human rights and the premise for all other rights. And as soon as you can catch your breath, prioritize employee welfare and security.
The talent situation in supermarkets is already severely lacking. The panic under the pandemic is often a problem of organization and people.
**Second, 'money'.** Why save lives? Because there is no cash flow. If this lifeline is cut, you die.
This time, you managed to grit your teeth and survive, but next time, you might not be so lucky.
Cash flow can be accumulated through daily savings. During normal operations, save a small amount regularly.
**For example, save 5%-7% of daily turnover.**
Why this number?
Because this proportion is roughly the cash flow that a chain supermarket would spend without noticing. Saving it can save lives in critical moments.
Additionally, set up an emergency fund.
**On an annual basis, allocate 20% of net profit as an emergency fund.**
For a chain supermarket with annual sales of around 300 million yuan, net profit is about 5-8 million yuan, and 20% emergency fund is about 1-1.5 million yuan.
With money in hand, you won't panic.
**Third, 'goods'.**
**Maintaining the health of goods is reflected in both the supply side and the sales side.**
On the supply side, many supermarkets' current supply chain systems are far from 100% direct operation, mainly because a product goes through too many transfers from factory to supermarket, about 9-11 times.
Except for some high-volume daily necessities that may sign direct operation contracts with manufacturers, supermarkets still rely on local suppliers for about 70% of their products in normal operations.
In this case, establish good cooperative relationships with suppliers. During the pandemic, overcome difficulties together. After the pandemic, cooperate for win-win.
**What about the sales side?**
The pandemic's impact reminds us again that supermarkets must accelerate transformation, integrating online, community, live streaming, and other multi-channel expansion.
Simply 'waiting for rabbits by the tree stump' for customers to come is too inefficient.
Supermarkets serving people's daily needs must also innovate continuously.
For example, light dining, small fresh produce stores + breakfast shops, community supermarkets + light pet grooming stores are all innovative directions.
**Final words:**
Save lives, cure diseases, maintain health.
**Small and medium-sized supermarkets are the main sales channel for daily necessities; their survival is related to our lives.**
This pandemic is a significant challenge, but if you survive the 'life-and-death gate' of February to March, there is an opportunity for a turnaround.
Remember:
**In Q1, focus on daily necessities; in Q2, maintain single products; in Q3, the pressure of new product launches eases, but restocking should still be in small quantities and frequent; in Q4, accelerate introducing new products to enrich the product mix through events like the Autumn Sugar and Wine Fair and the Imported Food Exhibition.**
Finally, I would like to especially thank Ms. Huang Biyun for her suggestions. I think these suggestions will also be helpful to other industries.
I hope the pandemic passes quickly, the industry can survive, and our lives can return to normal as soon as possible.
Source: Liu Run (ID: runliu-pub)


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## Citation metadata

- Publisher: New Distribution
- Author: 刘润
- Published: 2020-02-13
- Canonical: https://xinjignxiao.com/en/articles/survival-strategies-for-supermarkets-amid-the-pandemic-f860353f/
- Original source: https://mp.weixin.qq.com/s/XoHVHy9nj0mPGl6g_Urkhg

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