A common phenomenon: when a bulk snack store opens next to a supermarket, the supermarket's snack section sales drop by nearly half. Even after renovating the snack section to resemble the bulk store and lowering prices on key sensitive items below the snack store's, results remain poor, with foot traffic still incomparable. Why don't customers respond to low prices? High-Dimensional Enemy "Bulk snack stores have more variety, better quality, and lower prices," is the impression many customers have. Behind this impression are: 1. Bulk snack stores have at least 1,000 SKUs, while supermarket snack sections/bulk sections have only a few hundred. 2. In the past, many good snacks were unavailable in lower-tier markets/supermarket channels, but now they are available in bulk snack stores. Example: The author lives in Beijing, originally from a small county in Shanxi. In previous years, returning home meant not being able to buy favorite snacks, but since a bulk snack store opened there, they are now available. 3. The total channel markup (from factory to retail) for bulk snack store products is about 30%, while in traditional supermarket channels it is at least 50% (including distributor markup). The typical product flow for bulk snack stores is: factory to bulk snack headquarters to bulk snack retail stores, a short chain; while traditional supermarket snacks flow: factory to first-tier wholesaler to second-tier wholesaler to supermarket central warehouse to store, a longer chain. Just as lower tolls attract more vehicles, the shorter chain and lower distribution costs for bulk snacks enable a richer SKU assortment to reach lower-tier market terminals. This is the fundamental reason for the SKU richness and price advantage of bulk snack stores. As analyzed, the enemy supermarkets face now is not another same-dimensional supermarket that can be defeated with simple price wars. The current enemy is a higher-dimensional species with the advantage of a dimensionality reduction strike against supermarkets. Bulk snack stores are just the beginning; more hard discount new formats will join the ranks of eroding supermarket share. If supermarkets do not self-innovate, they will inevitably face closure. On one hand, we see many supermarkets with a strong sense of crisis, actively seeking self-rescue: for example, Yonghui selling coupons on Douyin to drive traffic ("85 yuan for 100 yuan, 170 yuan for 200 yuan"), and regional supermarkets in Anhui, Shandong, etc., directly benchmarking discount store prices for mainstream products ("Nongfu 12 bottles for 13 yuan"). On the other hand, we also see these actions are somewhat rushed: simply lowering prices without supply-side reform. Most supermarkets still do not recognize the essence of this enemy, mistaking it for a simple same-dimensional price war! Without self-elevation, supermarkets cannot defeat a high-dimensional enemy. Category Advantage is the Key Goal for Elevation Only by achieving a richer SKU assortment, better product mix, and lower prices in the snack category than bulk snack stores can supermarkets lure customers back. To reach this goal, supermarkets must strive in three areas: First, optimize supplier-retailer relationships and reduce zero-sum games. Zero-sum games between retailers and suppliers do not add customer value; customers end up paying for them. The author estimates that unnecessary distribution costs from these games account for about 5% of product value, exceeding typical retail book profits. Hard discount channels like bulk snack stores eliminate payment terms and entry fees, reducing negotiation items; direct cooperation with manufacturers reduces negotiation parties (distributors). Through these means, they lower negotiation costs. Many traditional supermarkets, however, still operate with a shelf-management mindset, effectively encouraging such games. Second, build the capability to sell white-label products. Bulk snack stores price major brands very low, basically not making money on them. But they have a large number of high-quality white-label products with relatively high gross margins. Using major brands to establish a low-price image and attract traffic, while profiting from selling white-label products, is the basic strategy of bulk snack stores. In contrast, supermarkets under the shelf-management mindset do not prioritize white-label products. Once major brands become weapons in price wars, gross margins disappear, and overall margins vanish. Building white-label selling capability is a comprehensive systematic project and a difficult but correct path. Third, actively connect with hard discount supply chains. Driven by community group buying and hard discount stores, a rich hard discount supply chain has formed in the market. Supermarkets should integrate with this force to break through the blockade of local traditional suppliers. It's Not That the Environment is Bad It's That the Environment Has Changed In the first two decades of this century, China's consumer spending grew rapidly, and the supply side was relatively backward. Product distribution needed to meet customers' demands for higher quality life, mainly through quality and service improvements. After 2020, consumer spending growth slowed, and supply-side quality and capacity issues were largely resolved. In this environment, product distribution must primarily meet customers' demands for higher cost-performance. The rise of bulk snack brands is actually a result of actively adapting to this change. Traditional retail enterprises must also proactively adapt. Hard discount is not a specific store format but a business philosophy. This philosophy requires cutting all unnecessary costs to provide customers with extreme cost-performance products. Achieving this requires joint efforts from manufacturers, supply chains, and retailers, with the core being retailers actively practicing the philosophy and driving upstream cooperation. Therefore, it is imperative to re-examine and reform retail workflows with the hard discount philosophy!