"Stroll" Carrefour seems to be pressing the "hold button".
Recently, a property announcement suggested that Shenzhen Carrefour Meilin store, which has been open for 22 years, may be closed on May 6 due to the expiration of the lease. However, the reporter of "business school" called Carrefour Meilin store and learned that the store is still open as usual. Carrefour Meilin store also issued a notice and responded that due to the lease contract dispute with the mall owner, the renewal between the store and the owner has entered the judicial process. During the litigation period, Carrefour Meilin store was open as usual. The notice also stressed that the store still continues to pay the rent in full and on time, and will try its best to stay at the original site. In addition, the property owner of Shenzhen Carrefour Meilin store and the Management Office of Meilin Village of Shenzhen Wanxia residential industry Co., Ltd. told reporters that at present, Carrefour Meilin store is open as usual, but the specific clearance time is not clear. Coincidentally, a month ago, Carrefour Beijing Beijing Centergate Technologies (Holding) Co.Ltd(000931) store, which has been operating for 18 years and was once the largest flagship store in Asia, was officially closed.
Source: Property announcement of Meilin Village, Futian, Shenzhen
"This supermarket is right next to my university. The entrance is underground. There are many small shops when I go to the supermarket. When I went to college, I often came up from the long escalator with my classmates carrying bags of environmental protection bags. At that time, shopping at Carrefour had the same sense of ritual as shopping." Liu ya (a pseudonym) of the post-90s generation told the reporter of business school that the closure of Carrefour Beijing Beijing Centergate Technologies (Holding) Co.Ltd(000931) store was expected, and there were some accidents and regrets. After all, it is the largest supermarket around here. In addition to the higher price of products, it is still very convenient.
It is understood that Carrefour Beijing Beijing Centergate Technologies (Holding) Co.Ltd(000931) store was once Carrefour's largest flagship store in Asia, covering an area of 32000 square meters, equivalent to 4.6 standard football fields. When it opened in 2004, the news keywords were "flagship store" and "Asia's largest", which also attracted many consumers to "play + shop". But after 18 years, the store finally ushered in the end of closure, which is regrettable.
In recent years, the news of Carrefour's "closure" has frequently appeared on the news. In 2020, 20 Carrefour stores were closed; In 2021, more than 20 stores were closed, many of which had been open for more than 10 years; Since 2022, Carrefour Chongqing Shapingba store, Carrefour Guangzhou Wanguo store, Carrefour Nanchang Shanghai Road store and Carrefour Beijing Beijing Centergate Technologies (Holding) Co.Ltd(000931) store have also closed down, while the above-mentioned Shenzhen Carrefour Meilin store has fallen into the dilemma of being discouraged by the property
As Carrefour, once known as the "Whampoa Military Academy" in China's retail industry, why did it decide to shut down Asia's largest flagship store? In the face of the challenges brought by the rapid development of the market, Carrefour has made adjustments to its business format. Why can't it "turn over"? Looking at China's retail market, what are the difficulties faced by traditional supermarkets such as Carrefour hypermarkets? What about the future? In response to the above problems, the reporter of business school sent an interview letter to Carrefour, and no reply has been received as of the time of publication.
rise! "Glory" of traditional supermarkets
Carrefour was once a benchmark of China's physical retail, created the "hypermarket" model, and played an important role in the development of the whole physical retail.
Time goes back to the Chinese market in the 1990s. At that time, the average income ratio of urban and rural residents was expanding from 2.2:1 in 1990 to 2.7:1 in 1996 and 3.11:1 in 2002 With the improvement of the income level of urban residents, the business form of business supermarket also began to explore at this time. In 1992, the reply of the State Council on the utilization of foreign capital in the field of commercial retail was released, which attracted the first wave of the layout of foreign supermarkets in China under the policy dividend. At the end of 1995, Carrefour officially entered the Chinese market and brought an emerging business form of "hypermarket" to China.
At that time, China was in the historical period of reform and opening up and rapid economic development. The policy dividend and demographic dividend greatly helped the development of Carrefour. In just a few years, Carrefour opened stores in Shanghai, Beijing, Jiangsu, Guangdong, Sichuan, Yunnan and other places. Especially from 2003 to 2006, the number of Carrefour stores increased at the rate of 16 every year. Among them, in 2004, Carrefour's national stores reached 57, which was a great achievement at that time. In the same year, Carrefour opened its largest flagship store in Asia - Carrefour Beijing Beijing Centergate Technologies (Holding) Co.Ltd(000931) store in Beijing. By 2010, Carrefour had 249 stores in 23 provinces. Statistics show that the new stores from 2014 to 2010 are three times as many as those opened by Carrefour in the first nine years, becoming its highlight moment.
"At that time, China's retail industry was more in the mode of department stores. At that time, suppliers operated directly in shopping malls, and many prices were decided by suppliers. Large supermarkets such as Carrefour bought out their suppliers' goods, and then turned them into sellers to sell them to customers. Through one-stop shopping experience and SKU (minimum inventory unit) As a result, Carrefour's commodity prices were cheaper than those in traditional shopping malls, and therefore more favored by consumers. Carrefour has set up various charging items such as admission fee, shelf fee, festival, rent, property and so on through channel advantages to further expand the profit space from suppliers. " Ge Jia, an Internet analyst, pointed out to the reporter of business school that Carrefour was once a benchmark of China's physical retail, created a "hypermarket" model and played an important role in the development of the whole physical retail.
In the middle and late 1990s, in addition to Carrefour, many large supermarkets entered China and the Chinese market. For example, in 1996, Germany Metro opened its first store in Shanghai, the Netherlands Wankelong opened its first store in Guangzhou, and the US Wal Mart landed in Shenzhen; In 1997, Thailand's Yi Chu lotus seed was sold in the Chinese market. In the same year, trust Mart from Taiwan, China opened its store in Chinese Mainland; In 1998, RT Mart in Taiwan, China opened its first store in Shanghai; In 1999, Auchan also opened stores in Shanghai.
\u3000\u3000 "As one of the first large supermarkets to test the Chinese market, Carrefour basically had no competitors in China. At that time, the vitality of hypermarkets was very strong. Relying on the large number of product SKUs, on the one hand, large-scale stores were opened to improve sales. On the other hand, by increasing the purchase volume of goods and pressing down the purchase price of suppliers and manufacturers, consumers had more cost-effective goods to choose from. At the same time, Carrefour could buy one-stop. The shopping scene was also the same as that of previous department stores Different store modes bring new shopping experience. At that time, many supermarkets were learning from Carrefour or Wal Mart, and enterprises were always happy to recruit Carrefour management talents. " Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian consulting, pointed out that with the development of technology, the adjustment of China's social structure and the decline of demographic dividend, the disadvantages of hypermarkets are also obvious. They usually have high operating costs. Under the condition of huge floor area, stores need enough passenger flow to realize benign operation.
"veterans" slowly wither
With the rapid development of the Internet and the improvement of the consumption and circulation environment, most of the competitiveness of once hypermarkets, such as channel advantages, high cost performance and strong convenience, has gradually lost, and online retail has replaced part of the offline demand of "shopping in supermarkets + shopping".
While these traditional supermarkets are developing rapidly in the Chinese market, China's retail industry is also booming.
In 2010, online retail began to take off in China, and the international supermarket brands that originally had the first mover advantage also began to have problems.
In 2012, the rapid development of e-commerce in China and o2o (online order, offline performance) broke into the retail market, which impacted the format of traditional hypermarkets, and the rapid growth of e-commerce seized a lot of market share of traditional retail. According to wind's statistics, since 2011, the growth rate of A-share supermarket chain enterprises has dropped sharply from more than 15% in 2011, rebounded to a certain extent in 2016, and fell to only 10% in 2020.
Take Carrefour as an example, the turning point may occur in 2008. At that time, the Beijing Olympic torch relay, which attracted much attention, was unfairly treated in Paris, France. The relationship between China and France was once tense, which directly or indirectly affected the development of Carrefour's business in China. Also from this year, Carrefour gradually removed its "crown" in China's retail industry.
In 2009, the number of Carrefour stores was surpassed by RT mart; In 2010, Carrefour's sales were surpassed by Wal Mart; In September 2011, the news of Carrefour's withdrawal from China appeared for the first time; In 2012, Carrefour announced that the revenue of supermarkets in France was weak, and there was another news that Carrefour wanted to sell its business in China. In the same year, Carrefour withdrew from the Singapore market and sold its Colombian business to sankosa group; In 2015, Carrefour closed 18 stores in the Chinese market. According to Carrefour's announcement, in 2015, China's market sales fell by 11.2% to 40.1 billion yuan. This year, Carrefour began online measures. In 2017, China's online retail market ranked first in the world, with an annual growth rate of 38%. At the same time, China's retail industry is also experiencing a round of unprecedented challenges. According to the data of the Institute of Business Economics of Beijing University of technology and industry, from 2012 to 2015, 138 department stores, 262 supermarkets and 6209 sports brand stores / markets were closed in China.
Carrefour's 2016 financial report showed that its profit decreased significantly, and its single store performance fell from 235 million yuan in 2009 to 158 million yuan in 2016. In the same year, the single store performance of competitors RT mart and Wal Mart was 254 million yuan and 175 million yuan respectively. By 2019, Carrefour's retail market share was only about 5%. At this time, Carrefour officially announced that it would sell 80% of the equity of China business to Suning.Com Co.Ltd(002024) .
However, the sale did not improve Carrefour's business dilemma in China. According to Carrefour's 2020 financial report, Carrefour China's net loss in 2020 was 795 million yuan; According to the announcement issued by Suning.Com Co.Ltd(002024) 2022 on February 11, the Chinese business of Carrefour has closed 7 hypermarkets, 8 convenience stores and 3 select stores since the second half of 2021, and the number of stores at the end of the year has decreased compared with that in 2020. In 2021, the overall operating revenue of Carrefour China also decreased by more than 10% year-on-year. Therefore, Suning.Com Co.Ltd(002024) at the end of 2021, Carrefour China made a provision for goodwill impairment of about 1 billion yuan. According to public information, Carrefour closed more than 80 stores in the Chinese market from 2018 to 2021. As for the future development of Carrefour, the reporter of business school sent an interview letter to Suning.Com Co.Ltd(002024) and the other party didn't reply as of press time.
Shen Meng, executive director of Xiangsong capital, pointed out that the closure of Carrefour's Beijing Centergate Technologies (Holding) Co.Ltd(000931) store in Beijing is a measure that the company has to take under the dual pressure of the erosion of general consumer demand by e-commerce and the tension of Suning's own capital chain in the current environment to reduce operating costs by closing stores.
"The original extensive model of Carrefour style hypermarkets is no longer applicable to today's refined market." Ge Jia believes that the main reason for the frequent closure of traditional businesses is the old business model.
Ge Jia pointed out, "At present, most supermarkets have two modes: one is the 'supplier cooperation mode', that is, the profit of the store mainly comes from suppliers, but the supermarket itself does not go deep into the supply chain process and source, such as Carrefour, Auchan and Yichu lotus; the other is the 'supply chain mode', which is equivalent to a shelf and makes money by selling goods, but the supermarket itself deeply participates in the supply chain processes such as manufacturers, logistics and warehousing Improve processes, improve efficiency and reduce costs, such as Wal Mart, Wumart, Hualian, Jingkelong, etc. However, with the rapid development of the Internet and the improvement of the consumer circulation environment, most of the competitiveness of once hypermarkets, such as channel advantages, high cost performance and strong convenience, have gradually lost. Online retail has replaced some offline demand for "shopping in supermarkets + shopping". Covid-19 pneumonia has exacerbated this situation, resulting in a slight disconnection between the hypermarket model and today's market development status. Another test brought to traditional supermarkets is the emergence of new challengers, such as Yonghui's front warehouse model, Metro's self-organized supply chain, Costco and Wal Mart member stores. The impact of new models on traditional supermarkets is a positive attack, which leads to difficulties for hypermarkets at present and in the future. "
The plight of our family
The cross-border transformation of traditional supermarkets is very difficult. Among them, changing the "enterprise gene" is the most challenging, that is, enterprises should change personnel's ability, thinking mode and behavior mode.
Since 2020, the outbreak and recurrence of covid-19 pneumonia have dealt a blow to the retail industry, but on the other hand, it has also promoted the further development of online retail such as e-commerce and community group purchase, and the e-commerce economy has led to the decline of the business format of super stores.
On May 17, Wal Mart's performance in the first quarter of fiscal year 2023 showed that its revenue exceeded market expectations, but Wal Mart's operating profit decreased by 23.1% after adjustment. On that day, Wal Mart's closing share price hit the largest one-day decline since 1987, down 11.4%. Wal Mart international, one of the three business segments, decreased by 13.0% year-on-year, and the gross profit in the Chinese market decreased, but the sales volume in China still increased by 7.2% year-on-year, mainly driven by consumer products. Undoubtedly, the promotion of Sam's club store has made a great contribution. Carrefour, which was 80% owned by Suning.Com Co.Ltd(002024) acquired, lost 770 million yuan in the first half of 2021. On the other hand, Yonghui, Jiajiayue Group Co.Ltd(603708) , Gaoxin retail and other supermarket listed enterprises have recently released their financial reports and operation data for 2021. Data show that about 70% of the sales and net profits of supermarkets have declined year-on-year to varying degrees. Among them, Yonghui lost 3.944 billion yuan Better Life Commercial Chain Share Co.Ltd(002251) 2021: the revenue in the first three quarters of 2021 declined, and the net loss attributable to the shareholders of the listed company in 2021 reached 184 million yuan; The net profit of Gaoxin retail, whose main business is RT Mart supermarket, fell 86% in the half year to the end of September 2021.
For the current market situation and future development of traditional supermarkets, the reporter of business school sent an interview letter to Yonghui Superstores Co.Ltd(601933) , Suning.Com Co.Ltd(002024) and other leaders of supermarkets. As of press time, no reply had been received. Wal Mart China told the business school reporter that with the rise of consumption classification and personalized consumption, the specific features of different consumer groups are becoming clearer and the differences in demand are becoming more and more obvious. Therefore, Wal Mart China believes that localized operation, using differentiated commodity selection system to serve consumers, the ultimate pursuit of efficiency, and the formation of a mutually successful supplier cooperation model are the key steps.
The report on the operation of chain supermarkets (2021) issued by China chain operation association pointed out that due to the high base formed by covid-19 pneumonia epidemic, the impact of repeated epidemic and community group purchase, the passenger flow of stores and the income of the same store decreased, and the growth of revenue and profit was under pressure.
Looking back at the foreign supermarkets settled in China, in 2014, Tesco in the UK packaged and sold its business in Chinese Mainland to China Resources Vanguard; In 2017, Lotte Mart announced its withdrawal from China; In November of the same year, Alibaba acquired 36.16% of the shares of Gaoxin retail, the parent company of RT mart, for us $2.88 billion; In 2018, Auchan's China business was taken over by RT mart; Since 2019, Wal Mart has closed more than 15 stores nationwide. At the same time, local traditional supermarkets such as Wumart and Yonghui are also facing business challenges.
In Shen Meng's view, previously, Chinese local enterprises were able to take over the business of foreign supermarkets because local enterprises still have a certain space in operating costs compared with foreign-funded enterprises, which can generate income. However, under the pressure of rising costs, the original income space of local enterprises gradually disappears, and offline businesses cannot compete with online businesses in terms of price and convenience.
Undoubtedly, under the market upgrading and digital development, the road faced by traditional supermarkets in the future is: exit or reform.
In the face of difficulties, traditional supermarkets are also actively seeking change. Taking Carrefour as an example, foreign supermarkets have made various attempts in reform. In 2015, Carrefour launched the "easy Carrefour" convenience store in Shanghai; In 2018, Carrefour cooperated with Tencent to launch Le March é, a new business type smart life supermarket. At the same time, it launched a small program to improve operation efficiency and open new traffic acquisition channels with the help of Tencent's digital ability; In 2019, Carrefour opened Wangfu central store, which is different from the traditional Carrefour's main store and exact consumer group. This is its first attempt of a new business type store; In 2020, Carrefour adopted its own business model and opened its first restaurant project, Mr. Fu; In 2021, Carrefour opened its first community quality life center store; In October of the same year, Carrefour opened its first member store in Shanghai. Now it seems that Carrefour's innovative business format continues, but it has not stopped its pace of decline.
Chinese supermarkets such as Yonghui Superstores Co.Ltd(601933) , are also actively trying new business forms, such as its water testing "super species". However, the rapidly expanding super species have suffered losses year by year. Public data show that Yonghui yunchuang lost 116 million yuan and 267 million yuan in 2016 and 2017 respectively, and the loss range expanded to 945 million yuan in 2018. Finally, when disclosing the annual report in 2018, Yonghui Superstores Co.Ltd(601933) announced that Yonghui yunchuang, whose main business is super species, was stripped out of the listed company system because of serious losses. At the same time, Yonghui Mini store, which is also trying the small store model, also ushered in the same fate of gradually closing the store; Then, Yonghui Superstores Co.Ltd(601933) began to try the business type innovation of the front warehouse mode, and continued to explore under the current market development.
Zhuang Shuai thinks, "Under the reasonable control of financial risks, it is normal and necessary for major supermarkets to try new models. In a sense, these attempts are acceptable trial and error methods for enterprises. In the retail industry, the exploration of new business cannot stop, and no company can stick to a model all the time. However, whether a model is suitable for the company depends on market competition, market acceptance and its own experience Adjust the operation capacity and capital scale. "
Facing the reality that the effect of business type adjustment is not significant, Zhuang Shuai pointed out, "The cross-border transformation of traditional supermarkets is very difficult. Among them, changing the 'enterprise gene' is the most challenging, that is, enterprises should change the personnel's ability, mode of thinking and behavior. For example, from hypermarkets to convenience stores, the operation and maintenance, category selection and site selection will be adjusted, and the adjusted learning cycle requires investment in cost and time. As a result, most enterprises can only imitate learning, but it is difficult to do it in the second business form For effective business differentiation in market competition, it is also difficult to build a set of most suitable, efficient and low-cost operation mode according to their own personnel ability. This is also why Carrefour has made new business forms, but they can't make achievements and other good business forms. "
Ge Jia believes that Carrefour's digital action is slow and late. Even if the application of digital can improve some efficiency later, the market dividend has disappeared. on the other hand, "For Carrefour, the stores of these formats are not profitable, with high investment cost and low efficiency. Even if Carrefour is acquired by Suning, Suning's capital chain also has problems. These stores are more symbolic than practical. Carrefour's practical significance is to operate its old stores across the country. On the one hand, we should actively move closer to digitization, reduce costs and increase efficiency; on the other hand, we should also pay attention to the development of the market The consumption structure is changing, the original consumption demand is upgrading, and the personalized demand of the new generation of young people is more prominent. The consumption demand of the original unified service of old stores should be adjusted to meet the layered demand of the consumer market. "
in the future, has the outcome of Shangchao been determined
The fundamental reason why hypermarkets break the situation is to change their thinking, shift the focus from upstream suppliers to downstream consumers, change the "landlord" operation thinking, incarnate the "housekeeper" and "expert" shaping and promoting consumers' lifestyle, and pay attention to consumers' experience in the whole chain.
Under the background of this era, how to survive the traditional supermarkets has become a difficult problem.
According to the 2021 supermarket format survey express released by China chain operation association, in 2021, the sales volume of 67.1% of supermarket enterprises decreased year-on-year, the net profit of 72.2% of enterprises decreased year-on-year, and the passenger flow of 68.39% of enterprises decreased year-on-year.
He Xiaoqing, global partner of Kearney and President of Greater China, "With the development of the times, the core group of supermarket retail is moving away from hypermarkets, and the number of visitors and customer unit price have declined, especially during the covid-19 pneumonia epidemic. What's more terrible is that this' departure 'trend includes not only the young groups of the' new generation ', but also the main customers of traditional hypermarkets such as pragmatic families. The fundamental reason for the' separation 'between hypermarkets and consumers is that the traditional store model has been difficult to meet the needs of the new day Changing consumer demand. In the face of many alternative channels represented by new retail, hypermarkets are relatively lack of new ideas in terms of selection, display, environment, service and other aspects, so it is difficult to provide consumers with sufficient reasons to go to the store. "
In the face of the proposition of "living", does the traditional supermarket seem to have a definite outcome?
Shen Meng believes that the positioning of stores is to make small profits and sell more, but the end of small profits and sell more is e-commerce. No matter how hard physical stores try, they can't compete with e-commerce in the format of hypermarkets. However, we also see that Wal Mart China continues to reduce low-income businesses such as Wal Mart Supermarkets and expand high-income businesses such as Sam's club stores, which fully shows that offline consumption has not been completely defeated by e-commerce. As long as it can provide consumers with sufficient reasons to attract their offline consumption, offline consumption still has living space.
The development of Wal Mart Sam's club store is still "strong" in the Chinese market. Official data show that by the end of 2020, Sam's club had 31 stores in China, with more than 3 million paying members. By the end of 2021, the number of stores exceeded 36, and the scale of new stores under construction and planning reached 23. Sam's club has said that there will be 40 ~ 45 member stores in China in 2022. Its performance is also gratifying.
Wal Mart's annual report for fiscal year 2022 shows that the company's net profit attributable to ordinary shareholders in fiscal year 2022 was US $13.673 billion, a year-on-year increase of 1.21%, and its operating revenue was US $572754 billion, a year-on-year increase of 2.4%.
Figure source: Wal Mart annual report for fiscal year 2022
Shen Meng pointed out that Wal Mart's report card showed China's retail industry the advantages of leading enterprises in operation, strategy, supply chain and so on. For traditional supermarkets, it is particularly important to find a reason for target consumers to enter physical stores. "After all, online or offline is not the key to determine the retail industry. They are just the form of retail. Online or offline depends entirely on the relationship between enterprises and consumers. If offline stores can not provide consumers with the attraction beyond online consumption, why should consumers choose Offline? No matter what form of retail industry, providing consumers with services that better meet their needs is the only way to win Path. If we can't break through this thinking bottleneck, there will be only a dead end waiting for the traditional retail industry. "
Ge Jia pointed out that in the past, the business model of traditional large supermarkets was the underlying logic, that is, flow economy. Its focus is not on consumers, but on traffic. The current market is more like the upgrading of flow economy. Enterprises need to accurately locate users through operating consumers, so as to bind users (including members and apps) to solve the problem of repurchase rate and develop long-term benefits. Operating consumers also include internal services (such as internal supply chain management).
Ge Jia believes that the shelf mode of Shangchao (i.e. selling goods to suppliers at the site) will not disappear, but it must no longer be applicable to daily consumer goods, but products with high commodity value. Because the rich formats of the market make commodity prices increasingly transparent, commodity price sensitive commodities such as daily necessities will no longer have high profits. This leads to enterprises in this kind of commodity selection must do their own supply chain, rather than relying on suppliers. Developing its own supply chain can not only reduce costs and increase efficiency to a great extent, but also make it easier to obtain consumer demand, so as to make products that meet consumer demand to realize the differentiation of commodity selection.
He Xiaoqing said that the supply chain is not only a moat for the transformation of hypermarkets and their continued survival in the Chinese market, but also the fundamental support of commodity power. In order to achieve the goal of "high quality and low price", it is necessary to control the cost on the basis of ensuring the supply quality and efficiency through the supply chain, such as OEM self support, direct purchase of origin, supplier negotiation, packaging optimization, validity period management, and even store warehouse location. He Xiaoqing pointed out that the trouble of hypermarkets, or the retail industry of Chinese supermarkets, lies precisely in being far away from consumers. This "distance" lies in whether to understand China's complex consumer groups in essence, as well as their differentiated "pain points" and "itching points". In the face of changing consumption trends, the fundamental reason why hypermarkets break the situation is to change their thinking, shift the focus from upstream suppliers to downstream consumers, change the "landlord" operation thinking, incarnate the "housekeeper" and "expert" shaping and promoting consumers' lifestyle, and pay attention to consumers' experience in the whole chain. But it is worth noting that behind the service corresponds to the cost. Therefore, for hypermarkets with different positioning, it is necessary to balance the demands of consumers and the cost of services, so as to match the appropriate service combination.
