---
title: "The Great Offline Reshuffle: Those Who Don't Rebuild Supply Will Be Eliminated"
description: "Over the past two months, we visited the market and talked with brand owners, distributors, and retailers. The consensus is that retail is changing so fast that many don't know how to do business anymore. While traditional supermarkets and mom-and-pop stores shrink, new formats like snack chains and instant retail surge. The essence of retail has changed: it's not just about more channels, brands, and promotions, but a deep restructuring of supply methods and business models."
author: "周群"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-01-25"
categories: "Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/R1vVv66bKi5dakoNeQBZ9g"
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citation: "周群. “The Great Offline Reshuffle: Those Who Don't Rebuild Supply Will Be Eliminated.” New Distribution, 2026-01-25. https://xinjignxiao.com/en/articles/the-great-offline-reshuffle-those-who-don-t-rebuild-supply-will-be-elimi-720127be/"
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---

# The Great Offline Reshuffle: Those Who Don't Rebuild Supply Will Be Eliminated

> Over the past two months, we visited the market and talked with brand owners, distributors, and retailers. The consensus is that retail is changing so fast that many don't know how to do business anymore. While traditional supermarkets and mom-and-pop stores shrink, new formats like snack chains and instant retail surge. The essence of retail has changed: it's not just about more channels, brands, and promotions, but a deep restructuring of supply methods and business models.

**Source** | Innovation Retail Club
Over the past two months, we visited the market and had intensive exchanges with brand owners, distributors, and retailers, also observing local retail formats.
The unanimous feedback is that retail has changed dramatically, and many brand owners and distributors don't know how to do business anymore.
On one hand, traditional supermarkets and mom-and-pop stores continue to shrink; on the other, new species like snack chains and instant retail are advancing triumphantly.
**The retail industry has changed a lot, but the essence has long been different. What you see is more intense channel competition, more diverse brands, and more frequent promotions; but what you don't see is that the supply methods and business models behind are undergoing a profound reconstruction.**
On one hand, traditional supermarkets and mom-and-pop stores continue to shrink; on the other, new species like snack chains, community stores, and instant retail are advancing triumphantly; on one hand, the logic of "people, goods, and places" is failing; on the other, "scenario, efficiency, and structure" are becoming the new underlying logic.
Supermarket Renovation:
From "Selling Shelves" to "Selling Products"
Starting in March 2024, Pangdonglai assisted in renovating Bubugao, and by June it renovated Yonghui Superstores, sweeping the renovation wave across supermarket systems nationwide.
Behind this trend, three questions need consideration:
1. Why do supermarkets need renovation?
2. What renovation actions have been taken?
3. What is the essence of renovation?
The reasons for renovation are not hard to understand. From the financial reports and market performance of retail companies over the past two years, traditional supermarkets are facing declining revenue growth, shrinking same-store sales, and rising closure rates.
Loss of foot traffic and declining sales per square meter make the old business logic of "renting shelves and living on channel fees" unsustainable. Simply put, supermarkets face not a question of "want to change" but "have to change."
Renovation itself is not a simple store makeover but a major project to rebuild the existing system around "user value."
Currently, mainstream supermarket renovations mainly include these actions:
1. Product structure optimization: significantly reduce repetitive, high-margin but low-turnover products, and introduce high cost-performance, high-turnover products;
2. Traffic flow and display restructuring: shorten customer search paths, optimize shopping flow, and improve conversion efficiency;
3. Service experience enhancement: comprehensively redo hygiene, guidance, checkout processes, and customer feedback systems;
4. Supply chain adjustment: accelerate removal of intermediate links, improve fulfillment efficiency, and strengthen store backend capabilities;
5. Operational metrics shift: from "how much fees collected" to "how many products sold."
The essence of supermarket renovation is shifting from "product logic centered on shelves" to "service logic centered on users," a retail reengineering process with turnover efficiency as the core, fulfillment capability as support, and scenario experience as extension.
**Instant Retail:**
**A Supplement to Efficiency Dividends, Not a Revolution in Retail**
In 2025, the hottest trend in the entire retail industry is undoubtedly instant retail. Internet giants like Alibaba, JD.com, Meituan, and Pinduoduo have increased investment, with various subsidies, significantly impacting the market.
Why has instant retail exploded in recent years? Behind it are several structural changes:
1. Mature infrastructure: the density of nationwide delivery capacity is high enough, and local B-end merchants are numerous;
2. User mindset shift: the combination of mobile internet and the lazy economy has led users to expect "instant gratification";
3. Platform strategic push: platforms like Ele.me, Meituan, and Douyin allocate resources to instant retail as a new growth scenario, providing exposure, traffic, and subsidy support;
4. Brand growth anxiety: traditional channels have dispersed traffic and slowing growth, so brands urgently need to explore new growth channels that deliver quick results.
What truly matters about instant retail is not just that it's a growth channel, but that it reconstructs the fulfillment chain among brands, channels, and consumers.
The fulfillment logic of traditional e-commerce is "central warehouse + express delivery," and that of traditional distribution is "wholesale + sell-through + display." Instant retail, by aggregating local store inventory + algorithm-based order dispatch + high-frequency rider network, achieves a combined innovation of localized instant fulfillment chains.
Its advantages are: faster delivery, higher conversion, and shorter chain.
But the costs of this chain model are also obvious:
High fulfillment costs (platform commissions + rider fees), severely compressing brand gross margins;
High frequency and low average order value, making it hard to cover marketing and operational costs;
Operations depend on platform traffic and mechanisms, lacking accumulation of proprietary assets;
Sustainability relies on platform subsidies and front-end sell-through, making structural profitability difficult to achieve.
Everyone should have a clear understanding that the influence of instant retail has boundaries; it has not reconstructed the entire retail system.
Additionally, although instant retail is hot and data looks impressive, the numbers do seem large, but compared to the entire retail system, its boundaries are clear:
In 2025, China's total retail sales of consumer goods were 50.12 trillion yuan, with instant retail accounting for less than 2%; in 2025, national online retail sales were 15.97 trillion yuan, with instant retail accounting for less than 7%.
So we must be clear: instant retail is an efficiency iteration, not a model disruption.
What truly deserves attention in the future is which brands can build their own local operational capabilities and data insights based on instant retail, thereby finding their "optimal combination" across all channels.
**Snack Discount Outbreak:**
**From Regional Trials to Nationwide Bloom**
Since 2023, snack chains and discount chains have become one of the most explosive formats in the offline retail market. Brands like Snacks Busy, Zhao Yiming Snacks, Haoxianglai, Laiyoupin, as well as Haotesale, Aotle, and Higou, have expanded rapidly nationwide, with store counts growing by tens of thousands.
A large influx of capital and franchisees is driven by a clear consensus: consumers are increasingly "price-sensitive," and traditional retail formats can no longer meet the expectations of high-frequency, essential needs, low prices, and high efficiency.
For tier 3, 4, and 5 markets, snack stores and discount stores quickly fill the gaps left by large supermarkets and traditional convenience stores, which have insufficient penetration, high product prices, and slow updates. They use small store models, selected SKUs, and high cost-performance combinations to hit the underlying demands of "cheap, nearby, and instant satisfaction."
Whether it's snack stores or discount supermarkets, the underlying logic is converging.
First, structural low prices on bestsellers: by compressing brand premiums at the front end, centralizing procurement to reduce costs at the middle end, and minimizing display expenses at the back end, they truly pass efficiency on to consumers;
Second, focus on high-frequency essential needs: snacks are low-ticket and high-frequency, while discounts use low prices to stimulate stockpiling; essentially, both run models around high turnover;
Third, rapid iteration of product structure: through trial sales and elimination, and replenishing bestsellers, they improve sales per square meter, forming a strong product "adaptability."
But beneath the boom, there are also structural challenges.
1. Severe regional homogenization, with overly dense stores lowering sales per square meter, and competition for people and locations causing short-term internal friction;
2. Fragile gross margin structure, with uneven mix of high and low margin products, leading to losses once foot traffic declines;
3. Some snack brands operate in non-standard and clearance goods, making it hard to establish truly stable supply systems;
4. Franchise systems expand quickly but are hard to control, with significant differences in site selection, display, and service levels, damaging overall reputation.
For now, after the heat, discount retail still has a long way to go. The future competition will not be about who opens stores faster, but who can build user stickiness and model durability beyond low prices.
Small Store Chains and Convenience Formats Rise Again:
**Differentiated Models Break Through**
Against the backdrop of a weak overall retail market and pressure on traditional formats like supermarkets and hypermarkets, small store chains and convenience formats are showing significant counter-trend growth.
According to Nielsen's "2025 China Retail Channel Report," in terms of sales share by channel for FMCG, hypermarkets declined 13%, while small supermarkets grew 7%, convenience stores grew 6%, and grocery stores grew 2%, indicating a gradual shift toward smaller offline retail stores.
Given the difficult overall offline environment, why are small supermarkets and convenience stores growing against the trend?
Convenience stores naturally fit the "high-frequency essential needs + nearby instant" scenario. They cover communities, office buildings, subway entrances, and other areas, meeting daily high-frequency consumption needs within a 3-10 minute walking circle.
As work pace accelerates and instant living habits strengthen, convenience itself has shifted from an "added advantage" to a "core value."
Convenience stores are no longer just FMCG sales channels but are becoming solutions for consumers' daily lives.
On one hand, through fresh food and proprietary meal product lines (such as boxed meals, buns, freshly brewed coffee), they enter the three-meals-a-day consumption scenario, forming a "dining + retail" composite format;
On the other hand, some chain brands are also experimenting with introducing pre-prepared dishes, daily fresh products, community services, and other functions, gradually transforming convenience stores from "FMCG channels" to "life service terminals," increasing average order value and user stickiness.
Traditional independent stores and mom-and-pop stores are shrinking at an accelerating pace, making room for the expansion of chain convenience stores. Recently, during visits with distributors, many reported a noticeable rise in the closure rate of small independent stores in their regions.
Mom-and-pop stores lack systematic supply chains and have cluttered product structures, making it hard to meet the comprehensive expectations of new-generation consumers for efficiency, quality, and experience; moreover, operating costs such as rent, labor, product selection, and logistics continue to rise, leaving traditional small stores extremely vulnerable.
In contrast, chain convenience brands generally have standardized systems, information-based operational capabilities, and stronger bargaining and product selection abilities, resulting in higher sales per square meter and capital turnover efficiency.
**Final Thoughts**
Offline business is still a good business, but the rules have changed.
On the surface, you see more intense channel competition, lower prices, and more diverse brands.
But what is truly happening is that the competitive focus of offline retail has shifted from "how many stores opened, how many locations occupied" to "what supply method, in what scenario, and how to sell what product structure more efficiently."
In other words, the old logic centered on people, goods, and places, driven by location and fees, is failing, replaced by a harder set of underlying laws: **Scenario determines demand, efficiency determines cost, and structure determines profit.**
Therefore, at this year's "CFC 6th China FMCG Distribution and Retail Conference," we will specifically invite brand executives, retail executives, and distributor owners to sit at the same table to thoroughly discuss this offline format reconstruction, clarify the issues, break down the methods, and clarify the path.
**Under new formats and new rules, redesign a sustainable growth business model.**
If you are also experiencing the failure of old models, welcome to the conference site, where we will recalculate and redo this business together.
**【Moving Toward the C-End】The 11th China FMCG Conference**
**Time: March 16-18, 2026**
**Location: Chengdu, China**


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## Citation metadata

- Publisher: New Distribution
- Author: 周群
- Published: 2026-01-25
- Canonical: https://xinjignxiao.com/en/articles/the-great-offline-reshuffle-those-who-don-t-rebuild-supply-will-be-elimi-720127be/
- Original source: https://mp.weixin.qq.com/s/R1vVv66bKi5dakoNeQBZ9g

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