Text: One View Business, Meng Jiayi.As soon as the Spring Festival holiday ended, 4 RT-Mart announced the closure of stores. RT-Mart Xuefu Road store, formerly known as Auchan Supermarket, finally bid farewell to consumers after 13 years of opening, and RT-Mart Deyang store, which has been open for 10 years, is also about to end its business, and RT-Mart Huanggang store and RT-Mart Zhuzhou store, which opened at the beginning and end of 2015, have also withdrawn within a month. RT-Mart has not provided a specific reason for the closure at this time.Edited by Wooden Fish.
According to incomplete statistics, since January 2023, at least 13 RT-Mart stores have closed or announced their closures, involving Hunan, Jiangsu, Hubei, Sichuan and other provinces, mainly due to lease expiration and business adjustments. Among them, the Panzhihua shop, which opened at the end of 2018, officially closed down after only four years. Seeing the former "King of Land Wars" frequently closing stores, it is inevitable that there will be some sighs.
RT-Mart's situation is caused by many reasons.
First of all, the entire supermarket industry is on a downward trend. Judging from the store closure data, according to incomplete statistics, at least 38 supermarkets will close in the third quarter of 2023. Among them, Carrefour's total number of stores closed nationwide in the first three quarters has reached 137. In addition, in 2022, more than 200 Lianhua supermarkets will be closed, and more than 100 BBK stores will be closed, and some supermarkets that are still open are also facing a situation of fewer customers and cold business.
Judging from the revenue data, according to the 2023 performance forecasts released by the six listed supermarkets, except for Sanjiang Shopping, Jiajiayue and Liqun Shares, which are profitable, several other large supermarket companies are facing huge losses, with Yonghui being the most. Yonghui expects a loss of 13 in 2023400 million yuan, the loss amount is more than ten times the profit of Sanjiang Shopping.
Secondly, from the perspective of competition, RT-Mart has to face not only traditional supermarkets such as Wal-Mart, China Resources Vanguard, Yonghui Supermarket, but also the instant retail business of platforms such as Meituan Flash Sale, Ele.me, and JD Daojia, but also to deal with the impact of the rise of warehouse membership stores in the past two years. According to statistics, most of the stores RT-Mart currently chooses to close are old stores that are more than 10 years old, and they are not as good as new stores in terms of product display and interior decoration.
Finally, from the perspective of a listed company, closing stores that are not doing well can reduce losses, optimize book data, and put more money where it is needed.
It is worth noting that Alibaba's financial report for the third quarter of fiscal year 2024 shows that "all other" revenues including Sun Art Retail, Yintai, Hema and other businesses are 470$2.3 billion, down 7% year-over-year, and adjusted EBITA down 87% year-over-year. The financial report also specifically mentioned Sun Art Retail, saying that the decline in revenue was "caused by the decline in Sun Art's retail revenue due to the reduction of the scale of the ** chain business and the decrease in customer unit price", and the physical retail business became a drag.
On February 7, Alibaba Group Chairman Joe Tsai said in the third quarter of fiscal year 2024 that Alibaba will gradually withdraw from the traditional physical retail business in a planned manner, and RT-Mart is likely to lose a strong "backer".
However, One View Business believes that RT-Mart has passed the run-in period of the new team and is moving forward at a faster pace. At the same time, RT-Mart has already thought clearly about the future development.
At the RT-Mart Fresh New Retail Supply Conference in April last year, RT-Mart CEO Lin Xiaohai announced four major development strategies for the new fiscal year: differentiated commodity strength, online inspection center, online fulfillment center, and multi-format omni-channel. From the current point of view, Sun Art Retail has formed three kinds of store structures: "small, medium and large", and has determined to stabilize the basic market of hypermarkets, make every effort to expand small stores, and explore the strategic layout of high-end warehouse membership stores.
In particular, last year, RT-Mart's high-end warehouse membership store, M Club Store, developed rapidly, and 3 M Club stores will officially open in 2023. According to Sun Art's new financial report, M Club has started preliminary work such as attracting new customers to four and five stores, and recruitment. On the first day of the opening of the Nanjing store, Lin Xiaohai, CEO of Sun Art Retail, said in an interview with One View Business that the M Club will open at least five stores by the next fiscal year. As of now, the number of members of the three M member stores that have opened has reached 120,000. In addition, according to incomplete statistics from Yilan Commerce, there are 100 warehouse member supermarkets nationwide. Among the many warehouse member stores, M member stores belong to the second echelon in China, second only to Sam's, Costco and other head warehouse member supermarkets.
In the view of One View Commerce, the "latecomer" Sun Art Retail has certain advantages. In terms of the pace of store openings, as of September 30, 2023, Sun Art Retail's hypermarkets have 333% of the property is self-owned, which provides an industrial foundation for RT-Mart to transform into M member stores, which can shorten the time for preliminary negotiation and development, and the rollout speed will be faster than that of other competitors. Sun Art Retail's first M Club store was renovated from RT-Mart Yangzhou Jiangyang store, and the two M Club stores in Nanjing and Changzhou were also renovated from their own stores.
From the perspective of store location, due to RT-Mart's early entry into the inland and rapid promotion, its location is mostly near business districts or residential areas. The M Club store that has been renovated on this basis can allow consumers to arrive faster and have a more obvious competitive advantage.
However, Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Great Aim Brand Positioning Consulting, pointed out that if M Club stores continue to use the original brand elements, it will be difficult for Sun Art Retail's transformation to succeed. On the one hand, the high-end transformation is first faced with changes in consumer groups. Unlike traditional hypermarkets, membership stores are open to the public, and if RT-Mart is blindly transformed into a membership store, without considering the economic strength and consumption concept of consumers, it is likely that the bamboo basket will be empty.
On the other hand, M Club stores need to be "unique" in order to attract customers to come and buy. First, it is different from RT-Mart, the first-class system of the membership store must be cut from the hypermarket, and it is difficult to ensure the renewal rate of the member. Second, it is different from competitors, due to the late start of Sun Art's own brand, there is still a certain gap between Shan's product research and development capabilities and the first-chain system, and it will lag behind other competitors in terms of commodity cost control.
One View Commercial has visited M member stores many times, which can be seen that Sun Art Retail is cautious and optimistic about the format of member stores.
As for the closure of stores, One View Commercial believes that this is not a bad thing to a certain extent, as many industry insiders said, "timely adjustment has a future." ”