Traditional Culture Encyclopedia - Traditional culture - Mid-year financial reports are mixed, traditional super how to "do incremental in the stock"?

Mid-year financial reports are mixed, traditional super how to "do incremental in the stock"?

August is China's traditional super half-yearly earnings season, from a few I often pay attention to the national chain of super, whether it is revenue or profit, have appeared different degrees of decline.

Fujian-based Yonghui Supermarket even posted its first loss in 11 years, at -1.083 billion yuan, down 158% year-on-year, while Shenzhen's Renren Le reported a net profit of -365 million yuan, down 157.84% year-on-year, second only to Yonghui Supermarket!

These nationally recognized veteran listed superstores, why have revenues and profits been under pressure in the past two years? In the era of multi-industry, how will they transform and upgrade, and get incremental to achieve new growth?

By carefully analyzing the financial reports released by traditional supermarkets, although some supermarkets believe that "community group purchasing" is the main reason for the decline in performance, but most of the supermarkets are still looking for internal and external reasons.

After an in-depth comprehensive analysis, I think there are three main reasons for the decline in the performance of traditional supermarkets:

For external reasons, with the acceleration of China's urbanization process, the trend of consumption upgrade is obvious.

In order to cope with the changes in consumption, the continuous development of online front warehouses and community group purchases, the core categories of traditional supermarkets: fresh food and FMCG, the online rate is increasing.

In addition, the rapid development of Boxmart Fresh Life and Convenience Bee, and the high-profile entry of COSTCO into China, these new community stores, convenience stores, and membership warehouse supermarkets are also competing with traditional superstores.

In China, a multi-format pattern has been formed with offline traditional superstores, convenience stores, community stores, membership warehousing supermarkets, and online home delivery, front warehouses, and community group purchases focusing on fresh food and FMCG categories.

In August 2019, the General Office of the State Council issued the "Opinions on Accelerating the Development of Circulation to Promote Commercial Consumption", the first article clearly stated: innovation circulation development, the formation of more circulation of new platforms, new formats, new models.

And the normalization of the epidemic control so that the traditional super in business management, promotional activities and other aspects need to be more flexible to respond.

For internal reasons, in order to face the competition, the traditional super began to adjust the category structure and internal organizational structure, the adjustment process will also lead to inventory pressure and labor costs, and different degrees of impact on the normal business management.

There are also many traditional hypermarkets that have been in existence for more than 20 years, and some of the stores are aging and have experienced severe rent increases, population shifts, and other reasons for closing or redecorating the stores.

Sichuan Red Flag Chain closed 10 stores in the first half of 2021 and upgraded 58 old stores!

It is clear that the competition faced by traditional superstores is not as simple as "low price expansion of community group purchasing"; the decline in net profit of traditional superstores is caused by a combination of factors. Community group buying is just one of the reasons.

After all, in such a volatile competitive environment and pressure, although the loss of traditional super accounted for the majority, but there are still revenues and profits of the super, showing that they have known how to deal with internal and external competition:

Whether it is a loss or profit, and ultimately faced with the same consumer market and competitive market, as well as the same mode of competition and competitors.

To solve the problem is still how to do incremental in the era of multi-format business: Is it to optimize and upgrade through the stock? Or is it to transform and try new business models? Or is it both?

Traditional super to achieve new growth, the first thing you need to do is to face up to the competition, change attitude.

I see from a number of retail listed companies in the financial report, many have been or will soon start the community group purchasing project: "will accelerate the transformation, vigorously expand the community group purchasing as a new field of business, in order to enhance the company's market competitiveness."

The attitude toward "community group purchasing" has shifted from antagonism to integration and development, and this shift in traditional superstores is a good start for change.

Yonghui Supermarket internal news revealed that the super species is exploring the community group purchase business, has been in Shanghai, Beijing, Fuzhou, Hefei, Chongqing and other cities on line. According to BBK's financial report, the company's group-buying business revenue in 2020 increased by 42.5% year-on-year compared to 2019, and the group-buying business enhancement is expected to become the company's performance growth point. It is understood that my old boss Walmart is also testing the community group buying business through community stores across the country, and has developed more than 10,000 group leaders.

Hubei Zhongbai Supermarket likewise in 2020 has been actively exploring community group buying and other emerging sales models, research and development to the home business center stage, *** there are 962 stores on-line community group purchasing small program, to carry out on-line group, solitaire and other new business. In 2021, Zhongbai focused on expanding its community group-buying business, promoting the rapid growth of online ordering, store pickup and group-buying business, while further improving the functions of the group-buying business on platforms such as the small program, increasing the ability of stores to attract and absorb customers, and steadily increasing the proportion of online sales.

Based on the perspective of "fast and economical", the focus of community group buying is "save" and "fast".

And the traditional supermarkets to carry out community group purchases of goods directly from the store, goods channels and supply chain does not need to make much change.

Therefore, the traditional super can make up for the shortcomings of the community group buying, in some goods quality, size, brand and other community group buying have a fight.

More importantly, traditional superstores have a strong and mature supply chain, with branded merchants and suppliers who have been partners for many years and are able to receive greater support.

Through private exchanges with a number of brand merchants, as well as in the analysis of their published financial reports and public information, I found that after 2021, with most traditional super clear embrace of community group purchasing, there are many other brand merchants:

Jinlongyu told investors that the company's attitude towards community group purchasing is to embrace it positively, and hope that through cooperation with the community group purchasing platform to achieve ************************************************************************************. group-buying platform cooperation to realize **** win. Golden Dragonfish executives showed their attitude towards community group-buying: "The company's business in the community group-buying channel is progressing well." They believe that the real advantage of the community group-buying model is to use a shorter supply chain to deliver products to consumers quickly and more efficiently. Currently, Goldfish's model of cooperation with community group buying is to provide customized products.

Laiyifen first-half net profit soared 777%, for the first half of the net profit rose, Laiyifen in the performance forecast prompted, 2021 combined with the advantages of the community stores, the construction of the "community group to the store to pick up" and "takeaway timely delivery to home. The company's business is to promote the construction of the enterprise microblogging community. In the first half of the year, Laiyi's community group purchasing business realized operating income of more than 160 million yuan, an increase of 80% year-on-year.

COFCO Coca-Cola's financial report for the first half of 2021 showed that revenue achieved a new historical record of breaking 10 billion yuan, reaching 11.22 billion yuan, a year-on-year increase of 19.3%. Realized net profit of 746 million yuan, up 33.2% year-on-year. Among them, community group purchasing, a new business, contributed a new increment of 160 million yuan to COFCO.

This means that community group purchasing as one of the new business, traditional supermarkets and brands attitude has been very clear: firmly embrace, *** with the development.

The attitude change to the new business, especially community group buying can make the traditional super and brand merchants to reduce the psychological burden, light load, the next is the specific practice and the corresponding effect.

In May of this year, Zhang Xunsong, chairman of Yonghui Supermarket, said that the current retail market has begun to enter the stage of inventory competition, Yonghui will return to the origin of the user-centered people's livelihood supermarkets, through the innovation of business models, to strengthen the scientific and technological capabilities and supply chain capabilities, so that the family mainstream customers to return to Yonghui stores, in the inventory to do the incremental.

In fact, with Zhang Xunsong holds the same view of the traditional super is the majority, whether it is a community group purchase, to the home mode and front warehouse, or warehouse membership store and new community stores, convenience stores, traditional super and new forms of synergistic development has become "in the stock of the incremental" of the mainstream.

I summarized the traditional super and new forms of synergistic development of the "four strokes" for reference and discussion:

The first stroke: storage supermarkets and new community stores, convenience stores, the layout of the new forms.

In May 2021, Yonghui Supermarket opened the country's first warehousing store positioned for people's livelihood in Fuzhou. As of the end of June 2021, Yonghui opened 20 warehouse stores in the country for reorganization.

During the reporting period, warehouse store sales increased by 139% year-on-year, and the average daily customer traffic of a single store increased by 136% year-on-year.

The model of "store and warehouse" is an important model for the synergistic development of traditional superstores and community group purchases. Walmart Supermarkets chose to open new community stores to carry out community group purchases, and the adjustment of traditional superstores to warehouse stores also has the same strategic significance of synergistic development with the community group purchase model.

RenRen has formed a multi-format development pattern of online and offline integration by combining the new hypermarket Le supermarket, the boutique supermarket Le super, the community life supermarket Le life, the community fresh food supermarket Le fresh, the department stores and shopping centers, and the RenRen micro-store, RenRen cloud store, and the third-party platform.

In its half-yearly report, Zhongbai Group revealed that the number of its chain outlets has increased by 58; it has accelerated the innovative development of warehousing supermarkets, created the first "Zhongbai Cloud Store", and added 2 hypermarkets; it has opened 78 new convenience stores, and the total number of convenience stores has reached 556.

The second move: accelerate the combination of online and offline.

From the financial data of the major supermarkets, the combination of online and offline is accelerating and achieving significant growth.

The financial report shows that in the first half of 2021, Yonghui online sales amounted to 6.81 billion yuan, an increase of 49.3% year-on-year, accounting for 14.1% of the proportion of main revenue. By the end of June 2021, the "Yonghui Life" APP has covered nearly 1,000 stores, with 72.2 million members.

Data from BBK's half-yearly report shows that by the end of June, BBK's digital members amounted to 27.71 million, contributing 71.5% of total sales; online GMV in the first half of the year amounted to 3.037 billion yuan, exceeding the 2.33 billion yuan of the whole year of 2019 before the epidemic.

According to the data in the prospectus of Wumai Technology, as of December 31, 2020, Wumai has 80.9 million APP users, and the retail sales generated by APP users account for more than 70% of Wumai's retail sales.

In 2020, Zhongbai Group's O2O to home business will have a cumulative total of 1,056 stores on line, with sales up 133.44% year-on-year, and the total number of orders up 95.92% year-on-year; the multi-point platform will be on line with Zhongbai's large kitchen commodities, and the total number of online fresh food varieties will reach 1,240.

The existing traditional super online and offline combination of basically self-built platforms and third-party social platforms, content platforms, with the continuous investment in the online business, the traditional super online and offline combination of the ultimate online and offline combination of the two-way combination of the "top down and bottom up, from the inside out and outside the outside in" mode.

The third move: the development and sale of private label goods.

With the continuous development of the member warehouse supermarket model, as well as the growth pressure brought about by the decline in profits, the private label business will become a major traditional super, as well as the traditional e-commerce platforms, emerging forms of the "profit increment".

In fact, as early as more than a decade ago, Carrefour, Walmart, Watson's and other foreign supermarkets, the proportion of its own brand reached 15% -20%.

In 2020, Liqun Group's sales of private label products amounted to 230 million yuan, accounting for 6% of the total sales of its supermarket business, an increase of 15% year-on-year.

The data in the half-yearly report of Jiajiayue 2021 shows that the operating income of private brands increased by 10.42% year-on-year, and the proportion of private brand income is more than 12%.

Data from Boxmart Fresh Life shows that since 2020, Boxmart has launched more than 20,000 new products, of which more than 6,000 are Boxmart's own branded goods, and the speed of new product iteration is three to four times faster than the industry.

In Yonghui Supermarket, there are also "Yuzizhi", "Pure Ease", "Mei Zhi Zhi", "Yousong", "Miaosong", "Miaosong", "Miaosong", "Miaosong", "Miaosong" and "Miaosong".

There are also private labels such as "Yuzi in", "Pure Ease", "Mei Zhi Zhi", "You Song", "Miaowei Si" and other private labels, which cover a wide range of daily necessities from furniture, tea sets, household paper, hairdressing tools and other categories.

Although the private label development time is long, but in the traditional super still accounted for less, this is because the traditional super compared to the brand merchants, in the commodity research and development efficiency is low, slow update, before the lack of digital tools to support, it is difficult to grasp the latest market trends and consumer preferences, even if it is a private label, but also very difficult to have a bright spot in the goods.

With the traditional super to increase investment in technology, in the use of big data, the integration of traditional super and supply chain channels will certainly give rise to personalized innovative genes, which will be the core of the development of traditional super private label.

Fourth move: improve technology investment, realize the digital upgrade.

Public information shows that in the first half of 2021, Yonghui Technology invested nearly 300 million. As of the end of June 2021, the number of people in Yonghui Technology has exceeded one thousand.

At the beginning of August this year, Yonghui Supermarket released an executive appointment announcement - the appointment of the former CTO Li Songfeng as the company's Chief Executive Officer (CEO), the main responsibility is to establish a technology-driven operation of the organizational system.

Through the integration of stores and warehouses, refinement and intelligent operation of procurement, trading, fulfillment and other aspects of the operation, Yonghui Supermarket will achieve the "three 30%" target of 30% increase in ping efficiency, 30% increase in people efficiency and 30% increase in product efficiency;

On June 1, 2021, Zhongbai Group released an announcement. It is proposed to invest 100 million yuan of its own funds to set up a wholly owned subsidiary, Wuhan Zhongbai Digital Intelligence Technology Company Limited (tentative name), to promote the transformation of the new retail, expand the new retail online business, and realize the "digital" operation and marketing of efficient linking and accurate reach.

Although we can't get more information from public sources about traditional superstores' investment in technology, my understanding of the industry shows that more and more traditional superstores have realized the importance of technology and are clear about the relationship between investment in technology and growth in revenues and profits, which makes traditional superstores' investment in technology more certain and confident.

For traditional super, the stage of the multi-format era is bound to experience pain, there is always a suitable method for their own business to get through this stage, the key is to be able to understand the laws of development and the essence, and then determined to move forward.

Whether it is a traditional super, e-commerce platform, community group purchasing or storage membership store, as a member of the retail industry, as long as the road, the competition will always follow.

Fortunately, the industry has been constantly standardized, consumers are becoming more and more mature, the traditional super in the pain period should not be pessimistic, fear and complain, as long as you continue to meet consumer demand, you can continue to gain profits and growth, not be eliminated by the times.

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