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"Price War" Hits Community Stores
Under consumption downgrading, community store owner Yingzi (pseudonym) resists price increases and adopts aggressive price-cutting strategies to survive, reflecting the broader price war in the retail industry. The article explores how traditional supermarkets and small stores adapt through supply chain reforms and product differentiation.
十里Top 10 Events in China's Retail Industry in 2023
In 2023, China's retail industry underwent significant changes. Hypermarkets continued to struggle, seeking new paths in discount stores and warehouse club formats. Online, traditional e-commerce platforms adopted low-price strategies amid consumption downgrading. Meanwhile, membership clubs like Sam's Club and Costco accelerated expansion, with Sam's planning 6-7 new stores annually and Costco reaching 6 stores in China, putting pressure on local players.
十里Shadows Loom Over Supermarkets
Traditional supermarket channels are facing increasingly severe diversion of customers and sales. Especially this year, supermarkets have truly experienced what it means to be in an 'era of stock': from front warehouses and online supermarkets that continuously expand categories, which are already 'invisible killers', to the expanding membership stores that pose the biggest potential threat. Additionally, new small-format stores focusing on vertical categories, mostly dealing in fresh produce and FMCG, are cutting into supermarkets' core strengths, further eroding their sales. Market concerns over supermarket performance have amplified, with talk of a 'wave of closures' rising and falling, and the market's attitude towards supermarket stocks seems overly pessimistic.
十里Supermarkets Defeat Supermarkets
The era of hypermarkets is over. Lin Feng, an individual operator who has run a supermarket in Beijing's southern Fifth Ring area for nearly a decade, has seen his daily turnover plummet from 30,000 yuan to 4,000 yuan, with customer traffic dropping from over 1,000 to about 100. This reflects the broader plight of traditional supermarkets, as giants like Carrefour close stores and listed supermarket chains report declining revenues. Lin Feng considers transforming his store or moving to a discount model, but faces challenges such as high renovation costs and competition from e-commerce and community stores.
十里The 'Golden Age' of Community Group Buying Comes to an End
The golden age of community group buying has officially ended this year, as small and batch-purchase platforms see significant declines while large platforms remain stable. The market is now dominated by giants like Meituan and Pinduoduo, forcing local platforms to transform and seek new strategies.
十里The Struggling Discount Stores
Soft discount stores are losing customers as they face supply shortages, price increases, and membership fees, contradicting their original low-price appeal. The market is also under pressure from hard discount stores and retail giants entering the discount space.
十里M&A Wave Rises in Snack Retail
Snack bulk retail chains are beginning to consolidate. Over the past two years, snack bulk retail stores have attracted huge attention, with their store counts growing at an explosive pace. Official data from some snack brands shows that Snack Youming opens an average of 4 stores per day, Snack Busy opens 6 stores per day, and Zhao Yiming opens over 200 stores per month. However, amid this rapid growth, mergers and acquisitions among major brands are intensifying, and the phenomenon of staking out territory is becoming more evident. On September 28, Wanchen Group announced the acquisition of the management team of Zhejiang snack brand Laoban Daren.
十里The Life-and-Death Battle in Retail Is Not in Beijing, Shanghai, or Guangzhou
Retailers are increasingly targeting lower-tier markets due to cost advantages, lower competition, and growth potential. Both local and foreign companies are expanding into these areas, but challenges such as price wars and market saturation remain.
十里Who Is Being Disrupted by the Rise of Niche Retail Formats?
Niche, low-price retail stores are on the rise, disrupting traditional supermarkets and convenience stores. These stores, often run by distributors or entrepreneurs, leverage supply chain advantages and low operating costs to offer competitive prices, reshaping the retail landscape.
十里The Besieged Convenience Store
In mid-July, a convenience store owner in Sichuan Province saw his daily sales drop by a third after several snack stores opened nearby, selling at low prices and drawing away customers. The rise of these bulk snack stores, backed by capital, is reshaping the retail landscape, impacting not only convenience stores but also distributors, forcing traditional retailers to adapt or face decline.
十里Declining Performance: The First Batch of Community Group-Buying Stores Have Already 'Fallen'?
Group-buying stores have grown wildly over the past year, leading many to fall into the trap, with even giants eager to try their hand. At the end of June, Liu Wei made a difficult decision to close three community group-buying stores he had been operating in Changsha. Over nearly three years, he witnessed the entire process of the community group-buying industry, from massive expansion to contraction, and then to the rescue attempts by group-buying wholesale and group-buying stores. This time, he retreated with his three stores. A group-buying entrepreneur told Ling Shou that Liu Wei's decision was 'not surprising,' as group-buying stores have grown wildly over the past year, leading many to fall into the trap, and even giants are eager to try their hand...
十里Review of Listed Supermarkets' Three Years of Pandemic: Revenue and Net Profit Both Decline, Q1 Performance Improves but Full Year Remains Under Pressure
From macro data, the overall offline retail sector, especially supermarkets, remains under pressure. In Q1 2023, most listed supermarket companies saw improved net profits compared to the same period last year, a positive shift from 2022 when over 60% of listed supermarket companies were loss-making. However, the full-year outlook for 2023 remains cautious. For example, Yonghui Superstores reported Q1 2023 revenue of 23.802 billion yuan, down 12.63% year-on-year, but net profit attributable to shareholders of 704 million yuan, up 40.24%.
十里Group Stores Cannot Save Community Group Buying
After intense competition and industry consolidation, large internet group buying platforms have contracted, while smaller local platforms are turning to physical 'group stores' for survival. Despite rapid expansion, the model faces challenges such as limited SKUs, complex supply chains, and a narrow consumer base, leading many to doubt its long-term viability.
十里Struggling Community Group Buying: Wild Groups Thrive, Giants Retreat
In the community group buying sector, after the retreat of the giants, community group buying has not disappeared but has survived in a new model. Large groups are retreating while wild groups are springing up everywhere.
十里2022 Financial Reports: Revenue Declines, Net Profits Narrow, Losses Remain Common
Retail companies' 2022 annual reports show more worries than joys, with most experiencing revenue declines and narrowed net losses. Sanjiang Shopping Club stood out with a 73.95% increase in net profit, while Better Life and other chains faced significant losses and store closures.
十里The "Declining" Top 100 Chinese Supermarkets
There is no such thing as a lasting business empire. This phrase aptly describes the current state of China's top 100 supermarket chains over the past decade. Most are traditional retailers that once enjoyed glorious pasts, but many are now contracting and suffering losses, with few able to sustain profitability. For example, Yonghui Superstores, ranked second in the "2021 China Supermarket TOP100" released by CCFA in July 2022, has seen a glimmer of turnaround. Recently, Yonghui announced its operating data for the first two months of 2023, with preliminary calculations showing operating net profit of approximately 860 million yuan, a year-on-year increase of about 14%, and net profit attributable to shareholders of approximately 820 million yuan, up about 70% year-on-year.
十里What Kind of Membership Store Does Hema Really Want to Build?
According to Wang Wei, founder of Fresh Legend, Hema's X Membership Store is the only membership store in China that shows promise. Despite various formats, the core of membership stores remains products—product development and efficiency management. After nearly 18 months of deliberation and refinement, Hema is revealing its ambition, experiencing early signs of recovery in consumer sentiment. Even amid the pandemic's impact, Hema X Membership Store saw robust growth, with sales up 247% year-on-year.
十里Walmart Expands into New Track in Existing Market
As pandemic prevention policies are gradually relaxed, the market expects the consumer sector to recover. In the second half of the year, major supermarket and retail performances have been picking up. Looking back over the past three years, retail enterprises have been under the shadow of the pandemic. Many supermarkets and hypermarkets have adjusted and made various transformation attempts, but these have not fully solved the difficulties and declining performance. Walmart is now focusing on community customers with more streamlined and sharp product strength, launching a new track of premium prepared dishes to deepen its existing market.
十里The 'Growing Pains' of Auchan Retail
On November 22, a rumor circulated that Hema Fresh and Auchan Retail would be sold to China Resources, which was dismissed as unreliable by insiders but still caused panic in the capital market, leading to a limit-down for Auchan Retail. The company reported its first-ever net loss in its interim results, reflecting the broader challenges facing traditional supermarket chains.
十里The Rapid Decline of Shopping Malls
Many shopping malls, after reaching saturation in first- and second-tier cities, are moving to lower-tier markets, believing there is still huge consumer demand. However, the high vacancy rates and the decline of traditional department stores indicate a broader struggle, with the future of malls in question.
十里Membership Stores 'Move into the City' to Avoid a Mess
Moving into the city means getting closer to consumers and urban life, potentially shifting the positioning logic from 'weekly trips' to 'multiple times a week' or from 'stocking up' to 'convenient shopping'. Membership stores have gradually expanded from 'outer suburbs' into 'urban areas', as seen in recent openings. On September 2, Carrefour's membership store in Nanxiang officially opened, with the Zhongshan Park store soon to follow, marking the first time membership stores have entered Shanghai's central urban area. Similarly, Sam's Club's Baoshan store, which opened in Shanghai at the end of August, has also shifted its focus away from the 'outer suburbs'.
十里A Fruit and Vegetable Supplier's 2022: Supermarkets No Longer the Relied-Upon Sales Channel
As winter approaches, the fruit market faces historically low prices due to oversupply and weak consumer demand, forcing suppliers to diversify from traditional supermarket channels to community group buying and direct-to-consumer sales. The economic downturn and pandemic uncertainties exacerbate the challenges, prompting a strategic shift towards cost control and survival.
十里Beijing's Mom-and-Pop Stores Under the Pandemic
Cherish the supermarket at your doorstep, for it may disappear one day. When the nest is overturned, no egg remains unbroken.
十里Q1 Financial Reports: Consumer Spending Plunges, Supermarkets Recover
Notably, while the consumer sector is struggling, supermarkets are turning a corner. Consumer giants like Yihai Kerry saw sharp profit declines in Q1 2022, while some supermarket chains returned to growth.
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