Traditional supermarkets must be changed.

Author | Worm II

Edit | Ji Ran

Abstract: The alternation between the old and the new has begun.

The tottering retail industry is experiencing a severe winter.

On October 11th, BBK Investment Group, a well-known enterprise in the retail industry, added a bankruptcy review case, and Dongxing Construction applied to Xiangtan Intermediate People’s Court for bankruptcy review because it was "unable to pay off due debts and obviously lacked solvency".

Earlier, at the end of September, RT Mart’s parent company, Gaoxin Retail, temporarily suspended trading on the Hong Kong Stock Exchange, and the long-circulating rumors of being acquired became certain. Even, even Yonghui Supermarket was acquired 29.4% of the shares by famous products at the end of September for 6.27 billion yuan. According to Sky Eye, Ye Guofu took over Guangdong Juncai International Company, which will be the largest shareholder of Yonghui Supermarket.

The occurrence of a series of things seems unusual. At present, chain shopping malls are staged a big retreat of traditional supermarkets. At the same time, new retail formats, such as Fat Donglai, famous and excellent products, have stood on the cusp of the reformers.

Under the alternation of the old and the new, the retail industry is undergoing a great change, and it has to be changed.

Who crushed the retail supermarket?

"I won all my opponents, but lost to the times; When the times abandon you, they won’t even say goodbye. "

This is a famous saying of Huang Mingduan, the founder of RT Mart. This is about himself and the whole traditional retail industry in China.

Looking at RT Mart’s financial report, this situation seems to be very obvious.

On the evening of May 21st this year, RT Mart’s parent company, Gaoxin Retail, released its annual performance report for fiscal year 2024 (from April 1st, 2023 to March 31st, 2024). During the reporting period, the company’s revenue was 72.567 billion yuan, a year-on-year decrease of 13.3%; The net profit loss was 1.668 billion yuan, which was 2238.5% lower than that of 78 million yuan in the same period last year. This is after the loss of 826 million yuan in fiscal year 2022, Gaoxin Retail is once again facing the situation of expanding losses.

Behind the poor performance of the financial report, there is another figure, which closed 20 hypermarkets in fiscal year 2024.

Yonghui Supermarket, a well-known retail enterprise in China like RT Mart, is also having a hard time.

At the end of August this year, Yonghui Supermarket disclosed the 2024 semi-annual report. In the first half of 2024, the company achieved a total operating income of 37.779 billion yuan, a year-on-year decrease of 10.11%; The net profit of returning to the mother was 275 million yuan, a year-on-year decrease of 26.34%; Deducted non-net profit was 29,862,500 yuan, a year-on-year decrease of 69.94%.

From RT Mart to Yonghui, the giants of traditional retail in China are facing more and more difficult survival pressure.

In fact, the sad background of RT Mart has long been traceable-young people are no longer willing to go to the supermarket to buy things.

The salesman put on a long face, and he couldn’t get the information he needed no matter how he asked. Their task has changed from explaining and recommending to simply sorting out shelves.

There is a row of goods on the outside of the shelf. In the past, the variety of beautiful things was replaced by a single commodity, and the next one would reveal the empty shelf behind it, which, like the fate of RT Mart, could not stand scrutiny.

"I visited once when I started, but I didn’t feel good about it, so I don’t want to go again." This is not the dilemma that RT Mart is facing alone. Almost all supermarkets are no longer in the same year.

Now if you go to the supermarket again, you will find that it has become a place where middle-aged and elderly people snap up discounted goods.

Changes in consumer groups have also triggered changes in consumption patterns.

An old customer in RT Mart said, "I used to come every two days. Now I compare the prices on my mobile phone before I buy things. Many times, the offline stores in RT Mart are expensive, so I don’t buy them in the stores. So many chain stores and e-commerce companies are on the rise, there is no need to go to RT Mart. Before I know it, my shopping habits have changed."

Behind this is the impact of emerging shopping methods such as O2O and community group buying on supermarkets. In the past, when people went to supermarkets, the core demand was to buy vegetables, fruits, fresh meat and other daily necessities. These industries were also the drainage tools of supermarkets. But now, vegetables and fruits, meat, dairy products, staple food and paper products, which can attract customers to shop in physical stores, have become the main consumer goods purchased by O2O channels.

As Huang Ming Duan said, many times you are not wrong, but times have abandoned you.

Self-help is imminent.

RT Mart began to think about today’s situation seven years ago.

At the end of 2017, Alibaba spent $2.88 billion to acquire a 36.16% stake in Gaoxin Retail, becoming the second largest shareholder of Gaoxin Retail–the biggest transaction in the retail industry at that time.

With the help of giants who opened up a new era, RT Mart has also made a series of transformations to cope with the impact of e-commerce.

Introduce mobile payment devices to make the shopping experience of the whole store smarter and faster; Bind online distribution services such as Taoxianda, Hungry, and Tmall Supermarket to expand the sales channels of goods; Even the "box horse model" was moved, and the small store model and the member store model went hand in hand.

It’s just that I kept repeating it, but I never thought about whether it really applies.

In 2020, although the growth rate of online revenue in RT Mart reached 80%, the annual revenue growth rate of Gaoxin Retail was only 0.1%. Ali’s intervention did bring a rapid increase to RT Mart, but it did not prop up the influx of real funds on RT Mart’s books.

That year, RT Mart launched a new action, launched RT Mart Super, and positioned itself as a community-based medium-sized supermarket with fresh life. However, the price is not as affordable as the vegetable market, and the location is not as convenient as the store downstairs. All kinds of disadvantages still discourage consumers.

When the community group purchase exploded, Xiaorunfa, which was positioned as a fresh supermarket in the new retail community, was launched, but it failed to achieve profitability without differentiation, but it became a drag.

At the beginning of last year, M-member store with paid membership system was launched, offering over 3,000 products, of which more than 10% are self-owned brands, and also providing hourly service within 5 kilometers of the store. However, Sam and Boxma users who have already opened their members are hard to move their positions, and they don’t need a new choice.

At the same time, RT Mart didn’t stop, and the copywriting "I killed fish in RT Mart for ten years" made it a hit on social platforms such as Xiaohongshu, but unfortunately, the traffic didn’t turn into sales, making consumers curious was only the first small step.

Many times, when the underlying business model can’t keep up with the times, it doesn’t make sense for you to spend more time modifying branches and leaves.

In fact, consumers who grew up in the millennial generation are completely different from the previous generation in terms of interest, habits and aesthetics. They pursue individuality, brand and innovative service methods.

According to the data of Ai Media Consulting, with the social material life becoming more and more abundant, consumers’ shopping focus is no longer limited to the quality of products, and they gradually show more and more demand for personalized products and services, which invisibly promotes the retail industry to constantly seek innovation and differentiation. By providing personalized products, exclusive brand packaging or services, consumers’ brand recognition and brand image can be effectively enhanced.

This makes the traditional retail supermarket, which only provides the place of sale and does not provide the service ability, have "original sin" in its business model.

In the cold winter when the retail industry as a whole is facing structural transformation, it is undoubtedly difficult to start changing the model.

03 The alternation between the old and the new has already begun.

It’s not the start that matters, it’s the break that matters.

When it comes to supermarkets, it means Yonghui and Fat East.

"In the past ten years, I have traveled all over the world and seen various retail formats and models. In the past two years, I found a better retail model than Costco and Sam. In our China, it is the Fat East model." This is a sentence from Ye Guofu, the chairman of a famous excellent product.

A positive signal may give the retail industry a new way to solve problems.

Fat Dong Lai, the absolute online celebrity of the business world, just changed the supermarket explosion into a scenic spot in online celebrity. With the rare sincerity and localized narrative in the capital story, it won a good reputation.

The e-commerce model certainly has an impact on Fat Donglai. Selling the same products, why do people prefer to go to offline stores?

In Pangdonglai, there are seven kinds of shopping carts at the entrance of the supermarket alone, from children’s special to the old version with a magnifying glass, which takes care of the most painful needs of every audience. If your purchase needs are not met in Fat East, as long as you leave your contact information, Fat East will even purchase goods specially for you.

Not only to the outside world, but also to our own employees and fat people from the East.

On the Internet, there is a salary table from Fat East, and there is even a column marked with "grievance award", "When the rights and interests are damaged, as a company, we will strive to make progress in this direction". Only by changing the heart of the internal and employees can the external service be better. This closed loop is benign.

The service and experience that other families can’t see is a must-have skill that Fat East will not be copied away.

Ye Guofu, the founder of the famous product, has said many times that the Internet wins by low price, if the price is the same offline and online, and the quality is guaranteed, then consumers will return.

A strong supply chain is the foundation of famous and excellent products, and its rapid expansion makes it leave snow and mud in the cold winter. Then use store upgrades and IP joint names to attract consumers, and use curiosity to transform into the passenger flow of stores, and regain the "strollable" experience that is separated from online.

In recent years, Yonghui has kept the background color of "changing agriculture to supermarket", changed the rule that supermarkets open at 10 o’clock and advanced the opening time to 6: 30, so that middle-aged and elderly people who get up early to buy food can also have new choices.

Only when the new way of exquisite life is integrated into the fireworks in the market, the story of Shangchao, a famous and excellent product, has yet to be verified.

In fact, neither Fat Donglai nor Yonghui, a famous and excellent product, has added too many new models, but only made some details that can be perceived by consumers better.

Looking at RT Mart again, we only get online and offline, but failed to improve the service and experience simultaneously.

What is the novelty of retail?

Retail is an industry that bends down to pick up steel shovel. Because of its low gross profit, its fault tolerance is also low. It’s not a new model that is called new retail. The innovation lies in more grounded services.

When traditional supermarkets such as RT Mart and Yonghui meet new retail models such as "Fat East" and "Famous and Excellent Products", an alternate transformation has begun.