According to the newly released '2024 China Chain TOP 100' by the China Chain Store & Franchise Association, compared to 2023, more than half of retail enterprises saw a decline in scale. Walmart has fallen below 300 stores, and Yonghui is expected to close 250-350 stores this year... The once-glorious 'supermarket' model seems to be facing contraction. Chain supermarkets are no longer chosen by consumers due to high product prices, high operating costs, and diversion by other formats. However, in the latest list, 10 companies still achieved double-digit growth in sales and store numbers: Hema, Mingming Henmang, Wanchen Biology, 7-Eleven, Costco, Shizu, BiuTe, Kudong, Xinguo Technology, and Laolinju. As the only company focusing on the traditional supermarket format, BiuTe is undoubtedly the most unique presence. In 2024, BiuTe's sales grew 35.7% year-on-year, and store count grew 14.7% year-on-year. In 2025, it aims to achieve 100 stores and 10 billion yuan in revenue. Although the market is pessimistic about the prospects of supermarkets, from BiuTe's development, we see that the market still needs supermarkets, but the question is — what kind of supermarkets?
Supermarkets: Generally Difficult
Traditional supermarkets have been struggling, not just recently, but a predicament that has been continuously accelerated by multiple environmental factors. 1. High offline store costs, heavy profit pressure In recent years, especially after the pandemic, property rents in most cities have not seen substantial declines, remaining high in core business districts and quality residential areas. For traditional supermarkets focusing on hypermarkets and community stores, rent has become a 'heavy burden' every month. Meanwhile, labor costs have been rising. Many chain supermarket executives admit that labor efficiency has dropped by more than half compared to 10 years ago. Stores must handle daily operations like cashiering, stocking, replenishment, and cleaning, while also taking on additional tasks like online order picking and delivery, keeping operating costs high. 2. Rapid expansion of online business, continuously diverting traffic Consumer shopping habits have fundamentally changed. Previously, it was 'browse then buy'; now it's 'search then buy'. Especially for FMCG, instant retail platforms, mini-program group buying, and other online channels have fully penetrated daily life. More and more users are accustomed to buying rice, flour, oil, milk, and beverages on JD.com, Meituan, Pinduoduo, and Dingdong Maicai. Supermarkets are no longer the preferred replenishment scenario. Coupled with price subsidies and delivery convenience on online channels, offline supermarket traffic is being continuously eroded. 3. Rise of category killers, weakening full-category advantages The core value of traditional supermarkets lies in one-stop shopping. But now, this value is being dismantled by 'specialized' new species like frozen food chain Guoquan, snack stores, and fresh produce chain Qian Dama, systematically diverting supermarket categories. 4. Cooperation with suppliers via channel fees makes retail prices hard to lower Influenced by foreign retail enterprises, China's supermarket industry has been collecting 'rent' for 20-30 years. Brand owners, to get their products on supermarket shelves, have to add these costs to product prices, inflating retail prices on shelves, losing the advantage hypermarkets should have, and eroding consumer trust in supermarkets. Multiple environmental factors have caused many national chain enterprises to shrink sharply today. But in Northeast China, BiuTe is accelerating its store openings, forming a stark contrast.
Traditional Supermarkets Can't Hold On
Why Can It Rise Against the Trend?
On June 8, BiuTe announced it would open 14 new stores within 37 days, including three simultaneously in Changchun. Of these 14 new stores, 11 are taking over former Yonghui supermarket locations, two are taking over other brands' old sites, and one is a renovated and upgraded store. BiuTe's rapid expansion is undoubtedly a bright spot in today's traditional supermarket industry, and behind it is its precise insight and foresight into the supermarket format. In 2019, BiuTe experienced its first loss in operations, which alerted the company internally. Through investigation, it was found that the core reason for the loss was BiuTe's retail prices: most product prices in BiuTe stores were higher than those in surrounding small shops. In response, BiuTe conducted in-depth research, comparing 3,000 SKUs in its stores with those in surrounding small shops, and aligning prices of items that were higher than the small shops. After this series of operations, it was found that over 300 products had negative gross margins at BiuTe. Facing this issue, BiuTe subsidized the losses itself, first lowering front-end prices, and then began renegotiating with upstream suppliers. Liu Wenliang, BiuTe's Strategic Operations Director, told the author: 'The reason we chose to directly cut prices is that building trust with consumers is difficult, but losing their trust is easy. Maybe one or two purchases will greatly discount you in their minds. By the time procurement negotiates better prices, the store might already be empty.' 2019 was also an important turning point for BiuTe — the establishment of daily distribution. Liu said frankly to the author: 'I didn't expect daily distribution to bring such high value and impact to BiuTe today.' Daily distribution originated from an idea BiuTe's chairman Meng Fanzhong had during a store visit. Traditional supermarkets, to replenish in time, usually set up their own warehouses in stores, where supplier goods often pile up. Meng found that such a layout requires sacrificing one-third of the store area for warehouse storage, and store employees also need to spend an hour or more each day looking for goods in the warehouse, greatly reducing labor efficiency. During holidays or promotions, store warehouses often overflow. The logic of daily distribution is similar to B2b: by breaking bulk at the central warehouse, goods are delivered to each supermarket store. It achieves full-item distribution, broken-package distribution, daily distribution, and distribution based on sales. The warehouse area in stores can then be given to the sales floor for more product display. 'When taking over these dozen Yonghui stores, we will cancel all warehouses, expanding an average of 1,500 square meters per store for the sales floor to boost sales,' Liu said. Daily distribution not only greatly improved labor efficiency but also enabled data connectivity at the store level. Each store's daily sales and moving product data are clearly visible at the central warehouse. It is also because of the distribution center that BiuTe's SKU count dropped from 31,000 to 17,000, eliminating most non-moving, out-of-season, highly duplicated items that occupied warehouse space. Regarding BiuTe's expansion, Liu also shared his thoughts with the author: 'From an operational perspective, large scale brings high efficiency. In the past two years, the Northeast has indeed seen some structural opportunities. The withdrawal of many chain supermarkets has provided BiuTe with good expansion opportunities.'
The Market Still Needs Supermarkets
Since last year, many supermarkets have joined the adjustment and reform wave. After visiting many stores, the author found that most had a lively opening but a flat ending — the core issue being that the supply chain hasn't truly changed. Supply chain efficiency and product differentiation are two unavoidable topics for supermarkets today. Supply chain efficiency: Sell well/products, by improving product circulation efficiency and reducing high costs in intermediate links, so that customers can truly feel the affordability of products. Product differentiation: Sell/good products, through co-branding and private labels, making consumers realize that products in the store are different from other supermarkets, with better quality and higher standards. In the past, supermarkets mainly focused on fresh produce and standard products. Most chain supermarkets cooperated directly with local distributors, so they lacked depth in the supply chain. By joining the adjustment, product differentiation was somewhat addressed, bringing ample traffic at the initial opening. But most supermarkets don't have a supply chain they can control, so they can't control product structure or form price advantages. The supply chain adds layers of markup, combined with operating costs, making final retail prices high, and in consumers' eyes, 'not cost-effective.' From a development perspective, supply chain efficiency is the foundation of chain retail development. Without this foundation, product differentiation cannot form lasting market competitiveness, nor can it solve the real problems of traditional Chinese supermarkets today. BiuTe's rapid development is precisely due to its deep cultivation of the supply chain. It is understood that after solidifying the supply chain foundation, BiuTe will continue to strengthen its competitiveness in product differentiation through the Zhenshimei supply chain and BiuTe's private labels. 'Today's BiuTe is running at full speed to prove to the market that the market needs chain supermarkets, suppliers and manufacturers need chain supermarkets, and the supermarket industry still has a future,' Liu said. Without supply chain efficiency, there is no profit; without differentiated products, there is no loyal customer base. The market has never abandoned supermarkets; it has only abandoned supermarkets unwilling to change. Final Thoughts As the 'leader' of offline physical commerce, supermarkets have been caught off guard by various competitive formats in recent years and have been repeatedly written off. In the past two years, we've seen many companies participate in adjustments, promoting store renovations and product optimization. This is a signal — a signal to reverse the decline. The market still needs supermarkets, but today's supermarkets must be a 'new supermarket' with supply chain efficiency, differentiated products, and a good experience for precise customer groups.