---
title: "Yonghui Enters Discount Store Track, Rolling Out Across National Stores"
description: "Yonghui Superstores announced on October 10 that it will launch 'authentic discount stores' in its national outlets, adding discount sections on its online APP and mini-program. The discount stores, located inside Yonghui stores, will offer 500-1,000 SKUs depending on store size, with pricing at 30%, 50%, or 70% off original prices, based on digital performance evaluations. This move follows Yonghui's earlier optimization of 300 stores, aiming to address revenue declines and capitalize on the growing discount retail market."
author: "胡杰斌"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-10-21"
language: "en"
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---

# Yonghui Enters Discount Store Track, Rolling Out Across National Stores

> Yonghui Superstores announced on October 10 that it will launch 'authentic discount stores' in its national outlets, adding discount sections on its online APP and mini-program. The discount stores, located inside Yonghui stores, will offer 500-1,000 SKUs depending on store size, with pricing at 30%, 50%, or 70% off original prices, based on digital performance evaluations. This move follows Yonghui's earlier optimization of 300 stores, aiming to address revenue declines and capitalize on the growing discount retail market.

Yonghui has also entered the discount store track.
On October 10, Yonghui Superstores announced that it will launch 'authentic discount stores' in its national outlets, and simultaneously add discount sections on its online APP and mini-program.
Yilan Business learned that the discount stores are set up inside Yonghui supermarket stores. In terms of product variety, the SKU count of the authentic discount stores will be controlled at around 500-1,000, depending on the size of the discount store.
Yonghui stated that in terms of discount product selection, its product selection will differ from the traditional operational logic of discounting near-expiry products. Aiming to improve product efficiency, it will use digital means such as its own supplier system and YHDOS digital system to scientifically evaluate product performance, with no necessary connection to near-expiry products.
At the same time, combined with product data from the digital sales dashboard, Yonghui will select a portion of new products, internet-famous products, and regular products daily to enter the discount product pool, and sell them at 30%, 50%, or 70% of their original prices according to specific circumstances.
Yilan Business visited a Yonghui supermarket in Hangzhou and found that the authentic discount store area has not yet been launched in the store, but a near-expiry product section was seen at the checkout area. The Yonghui mini-program in the Hangzhou area also does not yet have a discount section. However, another netizen told Yilan Business that most Yonghui stores in Beijing have already set up in-store discount areas.
Yonghui's addition of an authentic discount section is another change to its stores following the optimization of 300 stores, but unlike previous changes, this time it directly adds a new business format. However, why would Yonghui, which has always been known for everyday low prices, start looking at discount stores?
**Why Discount Stores?**
Although Yonghui's Q3 financial report released in mid-year showed that Yonghui had turned losses into profits, looking at Yonghui's revenue over the past three years, its current revenue growth is not optimistic. In 2020, revenue was 93.199 billion yuan, with a growth rate of 9.8%; in 2021, total revenue was 91.062 billion yuan, with a growth rate of -2.29%; in 2022, revenue was 90.091 billion yuan, with a growth rate of -1.07%. Only in 2020 was the growth rate positive, and revenue has been declining for two consecutive years.
To change this situation, as early as April this year, Yonghui carried out store optimization for 300 stores according to its strategy. However, on August 14, Yonghui Superstores released the latest status of store adjustments, showing that as of early August, nearly 70% of the first batch of nearly 300 stores planned for adjustment had been completed, and the Q2 customer traffic of some renovated stores increased by nearly 10% month-on-month.
This authentic discount store can be seen as a continuation of the store optimization strategy. But why discount stores specifically?
In Yilan Business's view, discount stores are a visible 'sweet bun' for Yonghui.
From a market size perspective, according to data from iMedia Consulting, the market size of China's discount retail industry reached 1.62 trillion yuan in 2021 alone, a year-on-year increase of 2.12%. Zhongyan Puhua Industry Research Institute believes that discount stores will be the fastest-growing business format in the next 10 years, with a compound growth rate of 5.6%, higher than hypermarkets' 2.5% and convenience stores' 5.5%.
From an industry perspective, relevant data shows that as of the end of 2022, the number of domestic urban snack collection stores (snack discount stores) exceeded 13,000. At the same time, a research report by Huachuang Securities estimates that by 2025, the number of domestic snack collection stores (snack discount stores) could reach 30,000. It can be said that the market is still accelerating growth.
From a social attention perspective, discount stores also have high social attention. Baidu Index shows that the average news value for discount stores in the past 90 days is 14,784, making it a hot topic of social concern.
In addition, the revenue growth of discount stores is also very rapid. HotMaxx, founded in 2020, achieved revenue of about 1.7 billion yuan in 2021, with a sales growth rate of 618.2%; as of now, it has nearly 500 stores.
**Can It Be Done Well?**
As a traditional supermarket, Yonghui naturally has certain advantages in doing discount stores.
First, brand influence. As a leading domestic supermarket brand, Yonghui's brand influence can make the 'authentic discount store' attract attention from its inception.
Second, store scale. According to Yonghui's 2023 interim financial report, Yonghui has 1,003 stores nationwide. If based on Yonghui's current store scale, the future scale of 'authentic discount stores' will reach more than 1,000. Through Yonghui's current second-generation store scale, Yonghui's 'authentic discount stores' will soon rank among the top in the industry.
Third, supply chain. The supply chain issue is a key problem restricting the development of discount stores, and Yonghui Superstores has been deeply involved in the supply chain for many years and has a mature supply chain system. Relying on this system, Yonghui Superstores' 'authentic discount stores' can easily solve the problems faced by the discount store format, thereby achieving rapid growth.
Furthermore, the discount format is currently considered by most industry insiders to be the future of retail. Chen Liping, a professor at Capital University of Economics and Business, said at the Supermarket Development Strategy Summit Forum held by CCFA last year that discount stores are not a retail industry that only relies on low-price sales, but an innovative format in supermarket development.
And Hema CEO Hou Yi also once said that in the future, hypermarket supermarkets will eventually be replaced by discount retail with good prices and quality. Facing this trend, early layout is also a wise choice.
However, it is undeniable that based on the information currently disclosed by Yonghui, the authentic discount store mentioned by Yonghui still has certain defects.
At present, the main problem is still the source of goods for the discount store. Yonghui told Yilan Business: Yonghui's authentic discount store has no necessary connection with near-expiry products. From the current information, Yonghui did not mention that it will not use near-expiry products at all. Then, based on the proportion of near-expiry and non-near-expiry goods, there will be three situations.
First, if near-expiry products are used, then the problem of the discount store will appear in another form in Yonghui. That is, the source of goods for the discount store comes from the surplus of near-expiry goods in the supermarket. For a good supermarket, this situation rarely occurs, and opening a discount store inside the supermarket will form a trade-off situation. The final result will be that if the discount store business is good, it means the supermarket's main business is not good; if the supermarket's main business is good, then there will be fewer goods in the discount area.
Lin Xiyu, a retail supply chain expert, believes: The product characteristics of discount stores are temporary unsalable goods. If a retail enterprise's own supply chain operation links can support a discount format, then there must be a problem with the enterprise's supply chain.
Second, if non-near-expiry food is the main source of goods, then under this format, there will be no difference from ordinary product promotion activities. That is to say, the new area established at cost will be no different from the past, and will also bear additional costs.
Finally, if both are present, how to adjust, how to allocate goods, and what proportion of near-expiry and non-near-expiry goods to use all require Yonghui to invest a lot of cost to complete. But based on the current customer traffic of Yonghui Superstores, whether the investment in the discount area can bring matching income is still unknown.
At the same time, Yang Yu, founder of Yilan Business, believes that Yonghui's store-in-store format for discount stores may have a certain impact on the sales of normal products in the store.
However, in Yilan Business's view, for the current Yonghui, it is better to dare to try and explore than to do nothing, because even if there are problems with the store-in-store format, they are within a controllable range. If the new area is successful, it is likely to help Yonghui get out of the current situation of stagnant revenue.


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