On June 5th, Cailian Press (Reporter Xu Cihao Gao Mengyang) reported that in 2024, the former offline retail giant is still struggling with losses.

Recently, the global retail giant Walmart's Lu'an Meishan store officially closed, which means that there is only one Walmart store left in Feicui Road, Hefei, Anhui Province. On May 28th, Walmart's first store in Jiangxi, Nanjing Bayi Square Branch, officially closed, and it was reported that the store had set a record for global sales on the opening day.

In recent years, retailers such as Yonghui Supermarket, Darunfa, CR Vanguard, and HeMa represented by Walmart China and Carrefour China have all experienced problems such as shrinking revenue, reduced profits, even turning losses, continuous store closures, and increasing financial risks.

According to the Xingkuang data of Cailian Press, there are 10 listed supermarket companies in A shares, including *ST bugao, *ST Renle, and Yonghui Supermarket. Only Hongqi Chain and Guoguang Chain achieved a year-on-year increase in revenue in 2023, and the other eight experienced varying degrees of decline. In terms of net profit, the 10 supermarket listed companies totaled a loss of 3.305 billion yuan.

Once upon a time, offline retail was the "leader" of business model transformation. Large supermarkets represented by Walmart, Darunfa, and Yonghui Supermarket, the "new retail" model promoted by Alibaba's HeMa, and membership stores represented by Sam's Club and Kai Shi Ke have all been recognized by the market. Nowadays, with Pinduoduo's adjustment of some stores of Better Life and Yonghui Supermarket, Pinduoduo has become a hot topic in the industry.

"All retailers and brand owners feel difficult, and China's retail industry is facing transformation." Zhang Wenzhong, the founder of Wumart, who rarely appears publicly, said in an interview with Cailian Press that consumers need the ultimate value for money, and retail companies must be efficient, simplify and optimize their processes, and integrate them. This is the only way for retail companies to survive.

Retailers and supermarkets have fallen into a wave of store closures.

In the two decades before the 1990s, foreign retailers such as Walmart relied on advanced management models and strong commodity strength to achieve brilliant performance in the Chinese mainland market, and once became a learning model for domestic retailers in China.

But in recent years, foreign retailers led by Carrefour and Walmart have also encountered problems. According to media statistics, Walmart closed 26 stores in China in 2023. From 2024 to now, Walmart China has closed at least 10 stores. Since 2022, Carrefour China has closed stores in succession.

Not only that, Walmart's former "Chinese apprentices" have also fallen into trouble one after another.

On social media, since April of this year, many netizens have posted that CR Vanguard supermarkets have officially closed in many places such as Guangzhou, Foshan, Shanghai, and Shenyang. According to the latest posts of social media users, CR Vanguard Lingnan Avenue store in Foshan City will also officially close on May 30th. Incomplete statistics show that CR Vanguard has closed at least 12 large stores this year, involving cities such as Shenyang, Hangzhou, and Chengdu.

Regarding this, CR Vanguard stated that the company has started a comprehensive upgrade and transformation of all business operations, and carried out targeted business adjustments based on the consumer market characteristics of each city, to ensure shopping needs and experience are more suitable for consumers.

Not only CR Vanguard, but also the small stores under Gaoxin Retail's community supermarket business line have stopped operating through many channels.

Cailian Press noticed that the Little Runfa applets have all been shut down, and the store list cannot be displayed. The last update of the official WeChat account was on June 15th last year.

According to the latest financial report data from Gaoxin Retail, Little Runfa has now turned to focus on the Nantong area, and has closed 40 stores. In the 2022 financial report, Little Runfa was defined by Gaoxin Retail as a channel covering surrounding communities and townships, and there were 84 stores nationwide.

Reflected in performance, the latest annual performance announcement from Gaoxin Retail for April 1, 2023 to March 31, 2024 shows that Gaoxin Retail's revenue was 72.567 billion yuan, a year-on-year decrease of 13.3%, which has declined for several consecutive years; net profit was a loss of 1.605 billion yuan, whereas the same period last year was a profit of 109 million yuan, this is Gaoxin Retail's largest loss since its listing in 2011.

In addition to Vanguard, as a former leading listed company, Yonghui Supermarkets also faces many challenges. Data shows that Yonghui Supermarkets had a peak number of 1,440 stores, but by 2023, Yonghui Supermarkets had reduced its stores to around 1,000. On May 31, the Yonghui Supermarket Huida store, which opened in 2003, officially closed. This store has been around for 21 years. It is understood that Yonghui Supermarket has closed more than 10 stores this year.

Currently, Yonghui Supermarkets Hebei Pingshan store, Tomorrow First City store, Xiyue Plaza store, Nanjing Changfa Plaza store, Wuzhong Aiqinhai store, Zhuanqiao Wanda store, Zhuji Wanda store, Xu Chang Wanda store, Changshu Wanda store, Tonghe Road store, Zhengrong Times Square store, Shangfenggang Times Square store, Huangshan Tunxi store, and Zhengzhou Easyhome New Retail Group Corporation Middle Lu store have all closed.

According to financial reports, in 2023, Yonghui Supermarkets achieved a revenue of 78.642 billion yuan, a year-on-year decrease of 12.71%, and a net loss of 1.33 billion yuan attributable to its mother, a decrease of 1.43 billion yuan from the same period last year. In the previous 2021 and 2022, Yonghui Supermarkets lost 3.944 billion yuan and 2.763 billion yuan respectively. This means that the company has accumulated losses of more than 8 billion yuan in the past three years.

Regarding last year's performance, Yonghui Supermarkets stated in its 2023 annual report that in recent years, it has continued to adjust its stores, proactively closing stores that have continued to lose money. At the same time, in 2023, as the national economy continued to gradually recover, the entire entity retail industry faced unprecedented challenges. Under the condition that the willingness and ability of residents to consume have declined, store revenues have also declined.

Hema, which is focused on the "New Retail" concept, also made many adjustments in 2024. In addition to organizational structure adjustments, Hema is also optimizing its store system. On May 31, Hema X membership store's Beijing Jianguo Road store officially closed. It is understood that the Jianguo Road store was originally a store operated by Walmart for 16 years. With Walmart's withdrawal, Hema X Member officially opened on October 20, 2023, and opened its second member store in Beijing, which closed after only 7 months. It is reported that Hema Fresh Fruit Ling Gongyuan store also closed on June 1st.

Yu Jianbo, Chief Operating Officer of Wumart Group, said in an interview with reporters that in the past 30 years, the retail industry was a time of incremental development, especially suitable for the era of large-scale development. This era has produced many large companies. However, starting from 2019, the new era accelerated by the epidemic has arrived. This era is called the "stock era", and the stock era emphasizes quality development.

Pang Donglai has become a sought-after figure in the industry.

Life is not easy for supermarkets, but not all supermarket companies are under pressure.

In April of this year, Pang Donglai, the founder of Fat Donglai, "Versailles" claimed in a video that Fat Donglai had originally planned to earn 20 million yuan last year, but earned 140 million yuan instead. This net profit not only exceeded that of Yonghui Supermarkets, but also surpassed that of many well-known listed retail companies in the industry.

Due to its good performance and traditional supermarket branding, since 2024, Fat Donglai has become the "godfather" of the industry.

On May 7th, Fat Donglai founder Yu Donglai visited several Yonghui supermarkets in Zhengzhou. Immediately, there was news that Fat Donglai would launch "assistance" to Yonghui Supermarkets. Instantly, related topics rushed to the hot search. The capital market has also been alerted. On May 8th, Yonghui opened sharply, with a market value increased by 2.2 billion yuan in a single day.

According to Yonghui, the Yonghui Supermarket Zhengzhou Xinwan Plaza store accepted Fat Donglai's closure and transformation on May 31 and resumed normal business on June 19.

In response, Yonghui Supermarkets recently released an announcement stating that the company noticed that the media had reported news such as "Fat Donglai officially launched adjustments and changes to Yonghui Supermarkets". After verification, this adjustment and change only involves some stores in Zhengzhou, and it does not have a significant impact on the company's revenue and profit growth.

On the first day of the May Day holiday, sales at the store increased to 2.4 million yuan, which was 16 times the usual amount. Customer flow reached a new high of 17,700 people, and netizens jokingly called it a "new 5A scenic spot".

According to the announcement by Yonghui Supermarkets, Yonghui Supermarkets will eliminate and take down 70% of its goods, and then reorganize them according to Fat Donglai's product structure. At that time, the product structure will reach more than 90% of Fat Donglai's, and the quality of the products will be greatly improved.

It is worth mentioning that this is not the first time that Yu Donglai has helped a "friendly" company.

At the end of March 2024, Yu Donglai and the management team went to Hunan to assist Step into High. It is reported that Yu Donglai shared the supply chain with Step into High.

In the past, as the "first private supermarket in China", Step into High had more than 300 stores at its peak. However, with changes in the operating environment in recent years, the profit of Step into High stores has gradually declined. It began to lose money in 2021 and accumulated losses of 4.608 billion yuan in three years. In the face of operating difficulties, Step into High closed 113 stores in 2023.

According to reports, the results of the transformation by Fat Donglai of Step into High Supermarkets have been significant. Public information shows that before the transformation, Step into High Changsha Meixi Lake store had an average daily sales of around 150,000 yuan and a daily customer flow of 2,000 people. On the first day of the transformation, April 11th, sales reached 210,000 yuan, and the customer flow reached 4,200 people. On the second day, April 12th, sales were 380,000 yuan and the customer flow was 7,100 people. On the third day, April 13th, sales were 800,000 yuan, and the customer flow was 11,000. On April 14th, sales reached 1.01 million yuan, and the customer flow reached 13,000 people.

Currently, the popular "big mooncake," cooked food, DL juice, DL craft wheat beer, DL oats, DL laundry detergent, and other popular items from Pangdonglai will be available in the store. In addition, many of Pangdonglai's own branded products are also sold in the stores of Bubugao supermarket in Hunan.

Clearly, in this type of cooperative model, Pangdonglai does not need to bear the risk and cost of opening stores in Henan, and can also export its own model and supply chain to earn money as a supplier.

To cross the cycle, relying solely on Pangdonglai is not enough.

Currently, Pangdonglai has removed 70% of the goods from the transformation of Yonghui Superstores, and replaced most of the goods with self-operated products.

"Self-branded products, the most core and difficult products, will be the focus of Wumart's development." Zhang Wenzhong mentioned in an interview with a journalist that today's Chinese consumers pursue value for money more than ever, and Wumart will continue to provide low-priced discounts to reward consumers. The process of closing stores has begun, and future transformations will be carried out thoroughly.

In Zhang Wenzhong's opinion, Pangdonglai has made a very good exploration in China's retail industry, and the core behind it is that Donglai allows every employee to sincerely enjoy serving consumers, and those with creativity can serve consumers in this way. In this case, it insists on good quality and reasonable markups, while continuously innovating its products.

"In this case, everyone is facing a transformation, it depends on who can transform quickly." Zhang Wenzhen told reporters that the era of high gross margin in the past is probably difficult to repeat, and retail companies need to rely on small profits and large sales- that is to say, by providing ultimate value, to meet consumer demand for expanding sales and then achieve a low but relatively stable profit rate brought about by large-scale business operations.

In fact, self-branded products were not pioneered by Pangdonglai.

Hema also once focused on direct supply from production areas and incubated self-branded products while building "Hema Villages" in various regions. In recent months, Hema has undergone a series of adjustments and is still making new attempts to find new business scenarios. According to its official website, Hema began inviting life service suppliers to join the platform. This is also the first time that Hema has invited external merchants to join since launching its life service. "This time, Hema is inviting merchants from all over the country, including those who offer pet feeding, home beauty services, laundry service, home cleaning, and more. "Said Hu Longjun, head of Hema Life Services, to Cailian Press. Currently, Hema Home Care, Laundry & Shoe Services, and other services cover more than 300 stores in 13 cities. In 2023, Hema piloted its pet feeding service in Shanghai, and will gradually expand to other cities such as Beijing, Hangzhou, Nanjing, Guangzhou, and Shenzhen.

Currently, regardless of what new attempts are made by retail supermarkets, the ultimate goal is to survive through the cycle. However, the brands that truly accomplish this are Costco in the United States and Sam's Club under Walmart. They all have lower costs and absolute control over the supply chain.

And without exception, they have lower costs and absolute control over the supply chain.

Zhuang Shuai, founder of Bailian Consulting, expressed his views to Cailian Press in an interview.

In his opinion, the development of fresh e-commerce and e-commerce supermarket formats in recent years has brought great pressure to traditional business superstores. At the same time, new formats such as discount formats and warehousing membership stores have brought competition to traditional business superstores. Consumers have stronger willingness and ability to compare prices, and traditional business superstores are unable to adapt to market competition and demand changes in terms of business model, internal management, process mechanism, and technological application, among other aspects.

"Investment in self-branded product research and development has improved product competitiveness and achieved differentiated competition." In Zhuang Shuai's opinion, Pangdonglai has not expanded blindly, but has deepened its presence in a limited area and formed a regional monopoly. At the same time, transparent profit margins, good user service experience, better salary and benefits to attract talent, and improve employee enthusiasm and creativity are the fundamental factors that enable Pangdonglai to achieve outstanding performance in the business superstore industry.

Zhuang Shuai told Cailian Press that Pangdonglai's assistance can only be one of the solutions. Traditional business superstores still need to innovate business formats, invest in self-branded product research and development, improve service levels and technology investment, accelerate integration with e-commerce platforms, and change existing management models and incentive mechanisms in order to achieve complete transformation and upgrading.

During the interview, Zhang Wenzhong also believed that simply pursuing digitization for retail companies might be inadequate, and it must be combined with a comprehensive approach to return to the essence of business. The essence of business is extreme value for money, distinctive products, good display, good service, and precise consumer outreach, all of which must be achieved through organic digitization." This is a whole."