2021 is the first year for the implementation of Yonghui Superstores Co.Ltd(601933) “new warehousing” mode. For many investors, it was expected. However, from the perspective of performance forecast, not only its revenue has declined for the first time since its listing, but also its net profit attributable to the parent company has lost nearly 4 billion yuan in advance, which inevitably makes people doubt its “new warehousing” mode.
Through the visit and investigation of Yonghui Superstores Co.Ltd(601933) and its warehouse stores, the reporter of red weekly found that Yonghui’s non membership warehouse stores are essentially different from membership warehouse stores, and its “price driven” essence has not changed. In the face of the encirclement and suppression of Internet giants and the adjustment of new rental accounting standards, the cost has increased significantly, Yonghui Superstores Co.Ltd(601933) ‘s “new warehousing” model may be difficult to turn the tide!
On the last trading day of the lunar year of the ox, Yonghui Superstores Co.Ltd(601933) released the performance forecast for 2021, giving the first annual loss forecast “report card” since listing for 12 years. However, since the opening of the market after the festival, the Yonghui Superstores Co.Ltd(601933) share price has not fallen sharply, and it still fell sideways for several days. The reason for the slow response of the share price may be that the funds have already left the market. As of March 4, Yonghui Superstores Co.Ltd(601933) has a total market value of 32.5 billion yuan, down nearly 70% from the high of 101.9 billion yuan in the past two years, and its share price has hovered around 4 yuan for more than half a year.
2021 is the first financial reporting year after Yonghui Superstores Co.Ltd(601933) implemented the “warehouse store” model. However, it has also become the year in which its revenue has declined for the first time since its listing. The performance forecast shows that its operating revenue fell by 3.8% year-on-year in 2021, and the net profit loss attributable to the shareholders of the parent company was 3.93 billion yuan, a decrease of 5.72 billion yuan compared with the same period of the previous year.
In this regard, Bao Yuezhong, a research expert who has focused on the new retail field for many years, told the reporter of red weekly: “( Yonghui Superstores Co.Ltd(601933) ) the biggest problem is the decline in revenue, which shows that there is no growth in the whole sales now. If you add (continue to open) new stores, the decline is relatively large.”
Yonghui Superstores Co.Ltd(601933) the performance of the “new storage” model fell sharply in the first year of implementation. Combined with the previous failure of frequent foreign investment and the “failure” of new business forms such as water testing super species and mini stores, whether Yonghui Superstores Co.Ltd(601933) relying on the “new storage” model can turn the world around has become a topic worthy of discussion.
non membership system has no obvious advantages
“new storage” mode “change soup without changing dressing”
On May 1, 2021, Yonghui Superstores Co.Ltd(601933) the first warehouse opened in Fuzhou. As of the end of the third quarter, the number of warehouses totaled 55, which is still expanding. From this point of view, it has become Yonghui’s new strategic direction to change the original traditional hypermarket into warehouse store.
In fact, before Yonghui Superstores Co.Ltd(601933) , many retail enterprises had tested the water of warehouse stores, which had already become a new battlefield of “internal volume” in the retail industry. For example, Metro is a typical enterprise implementing warehouse system, traditional supermarkets Hualian Supermarket and Carrefour are also moving towards membership system, and Costco and Sam’s club stores are more successful examples of warehouse stores.
However, in the group of warehouse stores, the warehouse model of Yonghui Superstores Co.Ltd(601933) is different. Most companies in the same industry are member warehouse stores, while they use non member warehouse stores. So what is the difference between membership and non membership? Why did Yonghui Superstores Co.Ltd(601933) choose non membership?
Sam, Costco, Metro and other membership warehouse stores mainly focus on high-quality goods and imported goods, and transform the traditional retail commodity price difference mode into member service mode to provide high-quality goods and offline scene experience.
In an interview with the reporter of red weekly, some consumers who purchased from Sam’s club store (Fushi Road store) in Shijingshan District, Beijing told the reporter: “compared with the price, we pay more attention to quality, buy green and safe food, and can’t save money for health.”
Yonghui warehouse store is mainly for people’s livelihood flow goods, focusing on “daily parity”. The sales methods include large packaging, mass selling, or single purchase, so as to ensure that “one piece is also the wholesale price”. It can be described as both wholesale and retail, creating the image of “civilian warehouse store”P align = “center” Figure 1 photos of Yonghui warehouse p align = “center” source: Red weekly
In fact, Costco and Sam’s club stores are successful because the essence of their membership system is to select customers, provide specific goods and services, and conduct misplaced competition different from mass retail. Through the annual fee of more than 200 yuan, it selects the medium and high-end consumer groups who shop many times a month and the customer unit price is more than 1000 yuan, and then provides customers with high-quality goods with high cost performance by selecting SKU (full name is stock keeping unit, i.e. the smallest inventory unit) and supporting attached services, which is different from traditional supermarkets with the above distinctive characteristics.
Building “explosive products” and private brands is the core performance of the commodity power of the member store. For example, Sam successfully “broke the circle” with a variety of online popular products. When the reporter visited, he found that his “explosive” roast chicken was sold out in an instant after it was put on the shelves at the whole point. In addition, swiss roll, sweet potato, beef roll, lime juice and other products have also become their popular products. In terms of private brands, the local warehouse member store HEMA x member store has developed more than 1000 private brands, and the proportion of private goods exceeds 40%.
In terms of scene additional services, like Sam, Costco and HEMA x club, they all provide consumers with food, health care and beauty, vision and hearing examination, tire repair and other services. It can be seen that the warehouse membership store is endowed with characteristics different from traditional supermarkets and e-commerce, which makes consumers have to drive even from a long distance.
The reason why Yonghui Superstores Co.Ltd(601933) does not adopt the membership system may be related to the shackles of its own resources and the characteristics of customer groups.
Yonghui Superstores Co.Ltd(601933) ‘s warehouse stores are mostly transformed from the original hypermarket stores, with an area of less than 10000 square meters, which limits the layout of member service formats. In addition, as a traditional supermarket, its core customers are price sensitive mass consumers. In the absence of commodity advantages, rashly adopting the membership system and charging membership fees may lead to the loss of a large number of customers, but will have an adverse impact on its business performance.
Lai Yang, President of Beijing Jingshang Circulation Strategy Research Institute, believes that: “Yonghui warehouse stores and other local warehouse member stores are not competitive in the supply chain. Taking Sam’s club store as an example, it has a large number of imported chilled meat, seafood, fruits, drinks and other categories. Because it is backed by Wal Mart’s global procurement supply chain, Chinese warehouse stores immediately go to international procurement, and the procurement cost is not comparable with Sam’s, and Wal Mart purchases in strict accordance with Wal Mart’s requirements EU standards should be stricter than Chinese standards. “P align = “center” Figure 2 photos of Sam’s Club p align = “center” source: Red weekly
In terms of product selection ability, the membership warehouse takes the member penetration as the assessment benchmark and makes customized products based on the member feedback information, while Yonghui’s warehouse takes the sales data as the reference, enlarges the best-selling products and cuts off the unsalable products as the group logic, selects products in the original supply chain commodity pool, and has a high degree of coincidence with the commodities in the hypermarket.
“The root cause of the above difference is that Yonghui Superstores Co.Ltd(601933) does not have relevant supply chain, member demand information and supporting selection procurement team and other resources,” Lai Yang said.
From the above situation, it is not difficult to see that Yonghui Superstores Co.Ltd(601933) ‘s warehouse store has little change in supply chain, selection and sales mode. It only changes to warehouse display and focuses on higher commodity cost performance. The overall business logic is not different from the original hypermarket model, nor does it form a dislocation competition with mass retail. Its core business philosophy is significantly different from that of Sam, Costco and other membership warehouse stores. Its essence is two business models driven by “price driven” and “goods and scene services”.
In the view of Zhu danpeng, an analyst of China’s food industry, Yonghui Superstores Co.Ltd(601933) warehouse store is just a gimmick and changed its selling point. “Its selection and other aspects do not do differentiated management. It is to change soup without dressing. It is more like a discount store, like moving the wholesale market to the store,” Zhu danpeng said.
warehouse is not as good as hypermarket
weak income growth is hard to break
Judging from the data of Yonghui Superstores Co.Ltd(601933) 2021 semi annual report, its warehouse seems to have achieved initial results. According to the disclosure, the average daily passenger flow of its warehouse reached 6181 person times, a year-on-year increase of 136%, and the sales reached 150 million yuan, a year-on-year increase of 139%. However, what about such a booming sales situation after Yonghui warehouse has been opened for more than 8 months? Can we fight against super large stores and realize “mode subversion”?
In the interview, the reporter of red weekly found that Yonghui Superstores Co.Ltd(601933) upgrading to a warehouse store did not seem to give consumers too clear perception. The reporter visited Yonghui Superstores Co.Ltd(601933) Longqi Plaza store in Changping District of Beijing and jingouhe store in Haidian District. As the first warehouse store in Beijing, Longqi Plaza store has not changed its signboard, which is still ” Yonghui Superstores Co.Ltd(601933) ” (red label). There is no sign about the warehouse store in the store, but only adjusted the shelves and product placement.
Jingouhe store did not even adopt the typical high shelf display of the storage system, but stacked boxes of goods in front of the retail shelves and increased the shelf spacing. Only from the appearance, it was almost the same as the previous hypermarket display mode, which was difficult to be labeled as a warehouse store. In the reporter’s random inquiry, most consumers did not know that the store was changed into a warehouse, nor did they know the difference between Yonghui warehouse and ordinary Yonghui Superstores Co.Ltd(601933) .
In order to learn more about Yonghui warehouse store and Yonghui Superstores Co.Ltd(601933) , the reporter of red weekly also visited two stores close to each other, one of which is Longqi store, the first Yonghui warehouse store opened in Beijing on June 25, 2021, and the other is Yonghui Superstores Co.Ltd(601933) – Huilongguan store, which is about 2.5km away from the warehouse, Both stores are close to Huilongguan subway station and nearby residential areas such as longtengyuan and xinlongcheng, with close consumer groups and high comparability.
The reporter of red weekly conducted field research on the product price, passenger flow, sales and customer unit price of the two stores. In the survey, the reporter selected 30 commodities for price comparison, including vegetables, fruits, grain and oil, milk, wine and other public categories.
According to statistics, the unit prices of 22 commodities in the two stores are the same, such as high-quality streaky pork, sugar orange, green pepper, etc., and there is almost no difference in the appearance of bulk products. Among the 9 products with price difference, the price of 5 products in the warehouse is lower than Yonghui Superstores Co.Ltd(601933) , while the price of 4 products in the warehouse is higher (see Table 1 for details). On the whole, the products with different prices are concentrated in milk, soy sauce and meat. Among them, the price of carp with the largest price reduction in warehouse stores is 8.99 yuan / 500g, 18% lower than that of Yonghui Superstores Co.Ltd(601933) of 10.98 yuan / 500g. However, Mengniu telunsu organic dream cover pure milk 250 10 is only about 2% lower in warehouse stores. The selling prices of daily fresh language fresh milk (250ml), Chubang delicious soy sauce (760ML) and Duoli sunflower seed oil (5.68l) in warehouse stores are higherP align = “center” Table 1 price comparison between Yonghui Superstores Co.Ltd(601933) and some products in warehouse (unit: yuan)
Among the commodities selected by the reporter, the types of commodities reduced by Yonghui warehouse account for only 16.67%, accounting for a small proportion. Can such a scale achieve the effect of attracting consumers to return? In this regard, the reporter made statistics on the passenger flow, sales volume and customer unit price of the above two stores at a similar time.
In the afternoon of the same day (Saturday), the reporter counted 71 and 95 checkout orders at the cashier of Yonghui Superstores Co.Ltd(601933) Huilongguan store and Yonghui warehouse store within 25 minutes respectively. After excluding the highest and lowest customer unit prices (among them, there are high price checkout orders that obviously deviate from the normal customer unit price. If abnormal values are not excluded, the customer unit price of Yonghui Superstores Co.Ltd(601933) will be higher than that of the warehouse store), The sales volume of the warehouse and Yonghui Superstores Co.Ltd(601933) are 928206 yuan and 934363 yuan respectively. According to the corresponding settlement number of 69 orders and 93 orders, it can be seen that the average customer unit price is 99.81 yuan / person and 135.42 yuan / person respectively. At the same time, orders with a unit price higher than 100 yuan accounted for only 36.85%, while Yonghui Superstores Co.Ltd(601933) reached 49.3%.
According to the above reporter’s survey and statistics, in the same period, the passenger flow, sales volume and customer unit price of Yonghui warehouse are lower than those of Yonghui Superstores Co.Ltd(601933) hypermarkets. According to this, it seems to be a “false proposition” for Yonghui Superstores Co.Ltd(601933) to use the warehouse model to alleviate the weak income growth of hypermarkets.
In the interview, some people in the industry told reporters that Yonghui’s transformation to a warehouse store is to reduce costs in all aspects and attract customers to return at a “lower price” to solve the siege of traditional hypermarkets without finding the optimal solution.
lease accounting standard adjustment leads to significant increase in cost
poor profitability
In fact, whether it is membership or non membership, for supermarkets, if they want to make profits, product turnover and cost control are the two core factors.
The warehouse itself is a “hard job”, relying on the operation mode of “low gross profit + high turnover”, focusing on “small profit and quick turnover”. Taking Costco and Wal Mart as examples, Costco’s gross profit margin in fiscal year 2020 was 13.09%, far lower than Wal Mart’s 24.83%, but Costco’s inventory turnover rate was as high as 12.26 times, significantly higher than Wal Mart’s 9.40% The DuPont analysis system is used to disassemble the two business formats (see Table 2 for details). Costco’s net interest rate and equity multiplier are basically close to that of Wal Mart. The excellent asset turnover rate has helped Costco achieve a roe level much higher than that of traditional supermarkets, which is also the core of its storage modeP align = “center” Table 2 Comparison of dismantling indicators between warehousing member stores and traditional supermarkets p align = “center” note: the data is 2020
The gross profit margin of Yonghui Superstores Co.Ltd(601933) 2020 is 21.37%, and it claims that the warehouse price is lower, which means that the gross profit margin of its warehouse is likely to be larger and the sales market is lower. According to the third quarterly report of 2021, its current gross profit margin decreased to 18.75%, which seems to support the above view.
Taking Costco model as an example, under the condition of lower gross profit, the key for Yonghui warehouse model to win lies in whether it can improve the inventory turnover rate in the way of “large quantity”.
After calculation, in the third quarter of 2021, Yonghui Superstores Co.Ltd(601933) inventory turnover rate was 3.16, which was indeed increased compared with 2.61 in the same period of last year. However, the reason for the increase of inventory turnover rate was not the increase of sales volume, but the reduction of procurement. According to the semi annual report of 2021, its inventory amount was 6.865 billion yuan, a decrease of 36.91% compared with 10.882 billion yuan in the same period of the previous year, which was caused by the reduction of optimized inventory preparation. The same was true at the end of the third quarter. In 2021, it adopted the strategy of adjusting structure, reducing inventory and ensuring the market, which reduced the average value of inventory and improved the inventory turnover rate.
However, Yonghui Superstores Co.Ltd(601933) has thousands of stores and a huge number. The overall data of its financial report can not accurately reflect the situation of 55 warehouses. Therefore, when visiting its warehouses, the reporter of red weekly also observed its shelves.
From the situation of Yonghui jingouhe storage store, the shelves of the store are basically single pieces in bulk, with few boxes of goods. Most of the customers’ shopping carts are sporadic daily necessities, and there are few cases of box purchase.
“The warehouse store mode is naturally contrary to the commodity advantages of Yonghui Superstores Co.Ltd(601933) . The goods in the warehouse store are suitable for large-scale and low-frequency procurement, while Yonghui Superstores Co.Ltd(601933) is good at ‘fresh’, and the preservation period of fresh active products is short, which is more suitable for small-scale and high-frequency procurement. Its main advantages are difficult to play in the warehouse store mode, and it is located in the core business circle, so consumers do not need to store goods.” Lai Yang told reporters.
In addition, according to a research report released by Shanghai Securities, by the end of 2021, the customer unit price of Yonghui warehouse was 167 yuan / person, while the customer unit prices of Costco, Sam and HEMA x member stores were 1123 yuan / person, 846 yuan / person and 601 yuan / person respectively. The single customer price of Yonghui warehouse is far lower than those of the above companies and 193 yuan / person of Carrefour. According to the reporter’s field visit statistics above, the customer unit price of Yonghui warehouse’s large stores is even 26.30% lower. Although this cannot represent the data of the whole second half of the year, it can also be seen that compared with the large stores, Yonghui warehouse’s large-scale sales and the characteristics of commodity volume are not obvious.
During the visit, the reporter also found that there was a large flow of people in the fresh food area on the lower floor of the store, while there were few customers in the commodity area upstairs, forming a sharp contrast between the two. Bao Yuezhong told the reporter of red weekly: “the customer unit price is one of the indicators to measure the business ability of enterprises. Not all goods in retail stores can attract and meet users. Whether enterprises can use drainage products to drive other general products is called commodity related sales in the professional field.” From the above investigation of the reporter, it seems difficult for Yonghui warehouse to promote the high turnover of all goods only by SKU reduction.
To explore the profitability of Yonghui warehouse store, it needs to be clear whether it stays in pushing up the scale of revenue or the substantial improvement of net interest rate. If only the growth of revenue can not be guaranteed, the company may fall into the trap of false prosperity, which is related to the operation cost of the enterprise.
However, according to the data of Yonghui Superstores Co.Ltd(601933) recent years, the number of employees is increasing every year, but the per capita profit is declining. From 2017 to 2020, the per capita profit was 21400 yuan, 16100 yuan, 14100 yuan and 14900 yuan respectively, which is going downhill in terms of cost reduction and efficiency increase.
In addition, the rent cost has also become a sharp knife to weaken Yonghui Superstores Co.Ltd(601933) profits. Its warehouse is located in the core business district, and the rent cost itself is high. More importantly, most of Yonghui’s stores are leased assets. After the implementation of the new lease accounting standards in 2021, the operating lease and other assets originally measured off the balance sheet need to be included in the table, which leads to a sharp increase in its financial expenses. The net profit of that year is about 400 million yuan lower than the original standards, which is not a one-time settlement. In the future financial statements, it needs to be amortized and withdrawn every year, This makes its huge loss performance even worse.
Internet giants encircle, chase and intercept
traditional supermarkets fear “dimension reduction”
As a leading enterprise of China’s supermarkets, Yonghui Superstores Co.Ltd(601933) strategy turns to warehouse stores, which is actually a sign of the decline of the whole industry. To explore whether Yonghui can save itself through the warehouse store model, the development of the industry is an inseparable topic.
The growth rate of operating income is the most basic indicator to reflect the prosperity of the industry. According to wind data, the revenue growth rate of China’s chain supermarket industry has decreased continuously since the fourth quarter of 2018. The annual growth rate in 2020 has decreased by 13.38%. The revenue growth rate of the chain supermarket industry has been negative for nine consecutive quarters, which can be seen from the development trend of the industry.
As we all know, under the impact of the Internet, the decline of centralized formats such as supermarkets and department stores is difficult to stop. Early Yonghui Superstores Co.Ltd(601933) with its direct mining base, buyer system, logistics, cold chain and other efficient supply links, as well as more than 1000 stores across the country, it not only obtained a wide range of passenger flow with cheap fresh food, but also achieved good profits with high gross profit goods. However, in recent years, the fresh supply chains of Alibaba, pinduoduo, meituan and other companies have also risen rapidly. According to Sealand Securities Co.Ltd(000750) statistics, as of 2021, Ali has more than 1000 digital agricultural bases, more than 1100 County logistics distribution centers and more than 4000 City push partners. Pinduoduo plans to build 150 Shenzhen Agricultural Products Group Co.Ltd(000061) bases, meituan has established more than 400 front warehouses, and JD logistics fresh and cold chain distribution has covered more than 300 cities
At present, Internet giants not only gradually grasp Yonghui’s “trump card” and build a whole chain of fresh food supply, but also establish a near-field community e-commerce platform to further “reduce the dimension” of Yonghui Superstores Co.Ltd(601933) and warehouse stores. Community group buying and near-field e-commerce platforms gather consumers’ deterministic orders online and feed them back to Shenzhen Agricultural Products Group Co.Ltd(000061) base. They sell high-quality products and fixed production, and then send them to consumers through the circulation mode of central warehouse grid warehouse head / community small store. They not only realize “fast and good” and can meet the supply of highly difficult fresh products, but also solve the problems of Yonghui Superstores Co.Ltd(601933) The pain point of “people looking for goods” in warehouse stores reduces the overall loss rate.
It is worth mentioning that the near-field community e-commerce platform means the combination of small community stores and e-commerce. The latter transforms the former, so it does not need to bear the cost of opening new stores, and the policy uncertainty is small, and the shopkeepers are also willing to accept the digital empowerment and online drainage of the platform. From the perspective of consumers, if you can buy fresh vegetables at home, why go further to supermarkets or even warehouse stores?
Recently, the so-called “parity” magazine has found that the so-called “parity” has been suppressed in the so-called “warehouse” of Yonghui weekly.
The reporter compared the Yonghui warehouse store located in the urban area of Beijing, buy more vegetables and meituan preferred similar products. It was found that the price of Yonghui warehouse store was higher than the other two (see Table 3 for details). Among the 12 products selected, only one raw pumping product has the same price in Yonghui warehouse as duomai and meituan. The prices of other products in Yonghui warehouse are higher, and a certain nursing product can even be higher by 118%! Under the same circumstances, how can consumers choose Yonghui warehouse which is more expensive and more inconvenientP align = “center” Table 3 Comparison of commodity prices between Yonghui warehouse and some community group purchase platforms p align = “center” data source: jd.com, pinduoduo and meituan app
In addition, small community stores are also occupying the fresh market in other ways, such as aunt Qian, who “doesn’t sell overnight meat”, and the fresh legend favored by Sequoia Capital, IDG and Hongzhang capital.
The two are called “community chain fresh food stores”, which realize rapid expansion with small area, large single products and wide density.
The logic of “fast, good and economical” means that supermarkets and warehouse stores are bound to face the reality that consumers are intercepted by e-commerce, traditional grocery stores and vertical chains. The previous story of Yonghui Superstores Co.Ltd(601933) resisting e-commerce and hanging small stores with fresh food is now reversing.
According to the data of ecosoc.com and CCFA, in 2020, the transaction scale of China’s community group purchase market was 75 billion yuan, with a year-on-year increase of 120.58%. In the first and fourth tier cities, the growth rate of comparable sales in the same store of community supermarkets was expanding at a rate of more than 8%, but there was almost no growth or even decline in large supermarkets. In addition, according to data, 1273 of the 2095 stores of the top 100 supermarkets in 2020 were from Aunt Qian and 46 from fresh legend. However, this year, the growth rate of the top 10 stores of the top 100 supermarkets was – 1%, of which Yonghui fell first with a decrease of – 18.6%.
Of course, Yonghui Superstores Co.Ltd(601933) has also tested the new retail business before, so can it recapture the community fresh food market through home business? However, the situation does not seem optimistic. On the one hand, although Yonghui has cooperation with Jingdong home, its own Yonghui life platform lacks the huge traffic entrance of Ali, meituan and pinduoduo, so the drainage cost is high and difficult; On the other hand, subject to policy factors, community group buying and fresh e-commerce have cultivated user stickiness by bargaining in very low seconds, and Yonghui’s online platform has been difficult to replicate.
From this, we can see that the number of members of Yonghui life app as of the first half of 2021 was only 72 million, with 22 million new users in the first half of the year. By the end of September 2021, the number of active consumers in taote and taocai had reached 270 million, a threefold increase. Meituan preferred added nearly 29 million users in the first quarter, and more than 285 million new trading users in the past 12 natural months, far exceeding Yonghui.
On the whole, the subversion of the new business format to the large-scale commercial supermarket business format lies in “decentralization”. The mode of physical retail with “field” as the core is bound to change to building competitive advantages around “goods” and “people”. However, as analyzed above, the warehouse of Yonghui Superstores Co.Ltd(601933) , which has lost its advantages, is more like a replica of a hypermarket. It is not innovative in itself. Under the siege and interception of Internet giants, it may be difficult to turn the world around.
