Retail giants lay out discount stores

A 1.
75-liter bottle of cooking wine of a certain brand is priced at 12.
6 yuan in Wumart supermarket, while the same product at Wumart's Meitao discount store costs only 5.
8 yuan
.
As the retail market becomes more and more competitive, coupled with the diversion of other channels, the business of supermarkets is becoming more and more difficult to do, and the decline in revenue has become the
norm.
Finding new antidotes has become a must-do for supermarkets
.
In recent years, supermarkets have been experimenting with various new formats
.
Nowadays, after warehouse stores and membership stores, discount stores have also become a new battlefield
for supermarkets.

In recent years, new brands of discount stores have continued to appear, such as discount cow, good sale, baby elephant life, hi special purchase, etc.
, and the core of the discount store business is to provide consumers with cost-effective products
.
At the same time, some large retail enterprises such as Jiajiayue, Wumart, Freshippo, etc.
have also laid out related businesses as supplements to their own retail systems or explore
multiple formats.

In September this year, Hou Yi, CEO of Freshippo, announced that the 7-year-old Hema completed the latest round of organizational structure upgrades
.
In addition, many international retail companies have also entered the Chinese market, and the well-known German retail brand ALDI entered the Chinese market in 2019, positioning itself in a community supermarket, focusing on "international quality, community price"
.

Wang Peihuan, chairman of Jiajiayue, once said that in the first month of the opening of Jiajiayue discount store, the floor efficiency of 3,000 square meters exceeded 4,000 yuan, which was higher than 1,233 yuan
for a comprehensive supermarket that opened for more than two years in 2021.
In terms of Freshippo, since 2022, the sales of outlet stores have increased by 555% year-on-year, and the earliest outlet store in Shanghai Pudong New Area, a 400-square-meter store, has a gross profit margin of 15% and daily sales of 150,000 yuan
.
Hou Yi said that despite the low gross profit margin, the "small profit but high sales" model makes the floor efficiency of outlet stores more than
7 times that of ordinary hypermarkets.

At present, China's discount retail formats can be roughly divided into three categories: hard discount chains, temporary discount chains and brand sales
.
The first discount department store in China was established in 2000, and brand sales represented by Vipshop began to appear
as early as 2008.

According to Vipshop's prospectus, the size of China's discount retail market in 2010 was 56.
5 billion yuan.

According to iMedia Consulting, this data has almost tripled by 2017, and in 2021, the market size of China's discount retail industry will reach 1.
62 trillion yuan, with a compound annual growth rate (compound annual growth rate) of 4%
in the past five years.
It is currently in an expansion period
.

Especially after 2020, advent discount stores, as a new outlet in the industry, began to accelerate their rise
.
By the end of 2021, the total number of registered food-related enterprises in China reached 94, and the market size grew rapidly by 38% to 31.
8 billion yuan, with a CAGR of up to 6% in 2021, higher than the growth of
the entire discount retail market.

In this regard, Jiang Han, a senior researcher at Pangu Think Tank, believes that the core driving force of the entire market is the "true fragrance" law of consumers, that is, cost-effective goods will always attract consumers
.
Therefore, discount stores are an inevitable product
of the objective laws of development.

Whether it is a member store, a warehouse store, or a discount store, it is the idea
of self-help for supermarkets.
At a time of structural changes in the retail industry, supermarkets are constantly looking for "antidotes"
.
Nowadays, how to operate discount stores and achieve sustainable growth will be another big test
for supermarkets.

(Central Finance)

China Food News(November 25, 2022, Version 07)

(Responsible editor: Gao Na)