Traditional supermarkets open up new paths for business growth

Data from the National Bureau of Statistics shows that since 2017, the number of supermarket stores in China has shown a downward trend year by year

As the mainstream format of the retail industry, the epidemic has brought a strong impact on the offline retail industry

Fresh food e-commerce is on the rise

During the epidemic in Shanghai this year, what are the most indispensable things for citizens to buy food? Dingdong grocery shopping, Meituan grocery shopping, Pupu, Daily Youxian, Hema, community group buying.

Fresh food e-commerce in China started to develop in 2005 and has experienced two waves of booms

In particular, new entrants such as Dingdong Grocery, Daily Youxian, and Xingsheng Select are riding on the back of the capital's tiger and running all the way

Daily Youxian has completed ten rounds of financing before its IPO in June 2021, with a total financing scale of more than 10.

From the perspective of revenue, Dingdong grocery shopping is enough to make most of the large supermarket chains in the above statistics uneasy

The contrarian outbreak of fresh food e-commerce has had a strong impact on the traditional supermarket format

How can traditional supermarkets with low gross profit margins rely on scale effects to save themselves under the double impact of the epidemic and e-commerce?

Warehouse supermarkets become "arena"

Under the catalysis of the epidemic, consumer shopping behavior has accelerated to shift online

But this is far from enough.

"Supermarket + catering" and Mini stores have successively become new formats for major supermarkets to test the waters, but the popularity has subsided significantly in the past two years

In the state of "chaos" in the industry, warehouse supermarkets have become a new "fighting arena"

　　Wal-Mart’s financial report shows that although hypermarkets are still Wal-Mart’s main business, the Sam’s Club model with steady growth in performance has become the mainstay of the overall decline in performance

　　In addition, in terms of the speed of expansion and the number of consumers, Sam has also hit major traditional supermarket chains

　　It's even more obvious if you count the unit price

　　The ability of warehouse stores to break through in the fierce battle is mainly due to three significant advantages: mostly located in the suburbs, large shopping area, relatively low rent and decoration costs, and obvious cost advantages; relatively few products, large packaging, and economies of scale The advantage of order price is outstanding; innovation is exerted, and its own brand and cost-effective products have won the favor of consumers

　　Sam's success proves the feasibility of the warehouse membership store model in China, which will finally usher in a development explosion in 2021
.

　　In the summer of 2021, Yonghui Supermarket will renovate some hypermarket stores into warehouse stores for reopening, and change the back warehouse of the original store into a store to expand the operating area and improve the shopping experience
.
In addition, Hema, Carrefour, Jiajiayue, Beijing Hualian, Metro, Renrenle and other brands also entered the venue
.

　　The old membership-based supermarket has accelerated the opening of stores, and the new entrants have disrupted the game, and the melee is about to break out
.

　　However, judging from the data released by Hema and Yonghui, this seems to be a feasible path
.
In mid-2021, Hema publicly stated that the first member store achieved profitability within 2 months of opening, with a unit price of 1,000 yuan and a daily revenue of over 10 million yuan
.

　　By the end of 2021, Yonghui has opened 55 warehouse stores, achieving a high-speed growth of 32.
9% comparable to the same store; in the first half of 2021 alone, the sales of Yonghui warehouse stores increased by 139% year-on-year, and the average daily passenger flow of a single store was year-on-year.
an increase of 136%
.

　　It is worth mentioning that, compared with other warehousing member stores, Yonghui's warehousing stores only have warehousing and no members
.
Moreover, most of the Yonghui warehouse stores are transformed from the previous hypermarkets, and are positioned as "warehousing stores at the doorstep"
.
Yonghui Supermarket wants to win back the users who were lost in the community group buying through the strategy of being more down-to-earth, no membership fee threshold, and low price
.

　　But no matter which form is adopted, it will eventually return to a question - will "warehousing" be the antidote to traditional supermarkets? Frankly, no conclusions can be drawn yet
.
However, it is worth noting that the core of the warehousing member store model lies in the "high quality + cost-effective" supply chain capability under global procurement behind it, as well as the development capability of its own brand featured products
.

　　(Chen Yiqi)

　　"China Food News" (May 20, 2022 Edition 07)

　　(Editor in charge: Gao Na)