A few days ago, a RT-Mart store in Kunshan, Jiangsu Province, was exposed to the news that employees stepped on bulk frozen food, which pushed RT-Mart to the cusp of public opinion, and this is not the first time that RT-Mart has been caught in the vortex of food safety problems, after which RT-Mart was also exposed to sell overnight meat and other issues. Not only are food safety problems frequent, but the former retail leader is now struggling to hide its declining performance, and its net profit has fallen sharply. The current situation of RT-Mart is only a microcosm of the store economy, in the Internet economy has become a trend, community group buying to accelerate the layout of today, the traditional supermarket market share is eroded by many parties, which can not help but think about the exhausted store economy where to go.
Eventful autumn
A few days ago, a video of a RT-Mart employee in Kunshan, Jiangsu Province, stepping on bulk frozen food was fermented on the Internet. A video circulated online shows a supermarket employee sitting on the edge of a freezer with his feet on the bulk food inside the cabinet. The employee then moved to another compartment in the freezer, his feet still resting on the goods. Above the freezer are hung signs of "frozen aquatic products" and "frozen shrimp", and labels such as "fish fillet egg dumplings" and "squid" are also attached next to the stepped area. The employee holds a clear glue in his hand to fix the label, and there are customers passing by. According to reports, netizens said that the incident occurred on February 14 at the Suzhou Kunshan RT-Mart Qianjin West Road store.
On February 16, staff of the Kunshan Municipal Market Supervision Bureau said in an interview with the Southern Metropolis Daily that the bureau had opened an investigation into the matter. At present, the bulk food in the frozen aquatic production area involved in the incident has been completely sealed and destroyed.
RT-Mart related persons publicly responded that the goods that were trampled on the freezer had all been destroyed on the day of the incident, and the freezer was fully cleaned and disinfected. The company has severely criticized the employees involved and transferred them out of the food department, and the relevant management of the store will also be held accountable.
In fact, this is not the first time that RT-Mart has been exposed to food safety accidents. In August last year, RT-Mart's Bolu store in Jinan Province was exposed to selling overnight meat that had not been processed the day before. According to reports at the time, those overnight meats that were not fresh and did not taste much were sold as special meat for 9.9 yuan a kilogram; the smell was obvious and rinsed off the smell and then put on the counter; and the smelly deteriorated and could not be processed, directly twisted or filled with sausages. Just a few days before the accident was exposed, the Jinan Municipal Market Supervision Bureau just interviewed the person in charge of RT-Mart's North China headquarters, and at the same time interviewed the recent complaints and reports, which mainly focused on the suspected sale of food beyond the shelf life and the production date of tampered food.
Jiang Han, a senior researcher at Pangu Think Tank, told Consumer Titanium, "For RT-Mart, food safety is a core problem, because RT-Mart started with fresh food, and if the food safety problem is not solved, there will be more and more trouble left for RT-Mart." ”
Net profit fell by 80%.
Wave after wave of unevenness, RT-Mart's troubles are far more than that. On the one hand, the eventful autumn of food safety issues, on the other hand, the decline in net profits is highlighted.
According to the first half of 2021 performance report released by RT-Mart parent company Gaoxin Retail, The operating income of Gaoxin Retail during the reporting period was 41.534 billion yuan, down 5% year-on-year, and the profit attributable to shareholders was 117 million yuan, down 86% year-on-year. At the same time, Gaoxin's retail gross profit margin was 26.3%, which was also 0.6 percentage points lower than 26.9% in the same period last year.
For the decline in performance, Gaoxin Retail said that in 2021, the physical retail industry was affected by many unfavorable factors such as the impact of community group buying, the continuous decline in food CPI, the slowdown in consumption, the recurrence of the epidemic, and the frequent occurrence of disaster weather, and the revenue and net profit growth of Gaoxin Retail were under pressure.
From the performance of Gaoxin Retail, it is not difficult to see that under the downward trend of the overall retail industry, Gaoxin Retail, which is mainly based on store formats, cannot stay out of the matter. According to Gao Xin Retail, in the six months during the reporting period, the group opened 3 new RT-Mart hypermarkets across the country, opened 36 new RT-Mart stores, and the number of medium-sized supermarkets RT-Mart Super signed reached 16, while closing 2 stores. As of September 30, the Group had 491 hypermarkets, 6 medium-sized supermarkets, 68 small supermarkets and 3 fresh processing warehouses in China.
Lin Xiaohai, CEO and executive director of Gaoxin Retail, admitted that at the beginning of the year, he did not expect the competition for community group buying to be so fierce, nor did he expect the CPI to fall so badly and the epidemic would be repeated, so he proposed high double-digit growth at that time, but the changes in the operating environment in the first half of the year made the group's performance decline in low units.
In fact, in the retail market, RT-Mart was once the general existence of "hegemony". As early as 2010, RT-Mart was the champion of mainland retail. Public information shows that RT-Mart was founded in 1996. In July 1998, RT-Mart opened the first mainland hypermarket in Shanghai, positioning itself as a large-scale membership chain supermarket. In 2011, Gaoxin Retail Co., Ltd. was established, which owns two major retail brands, "RT-Mart" and "Auchan", and was publicly listed in Hong Kong in July of the same year. In October 2020, Alibaba Group controlled Gaoxin Retail with 72%.
In fact, the downturn in the performance of Gaoxin Retail has long been foreshadowed. As early as 2018, Gaoxin Retail had a double decline in net profit. At that time, Gaoxin Retail achieved total sales revenue of RMB101.315 billion, down 1.0% year-on-year, and profit attributable to equity shareholders of the company was RMB2.588 billion, down 7.3% year-on-year.
As Lin Xiaohai said, to some extent, the rise of community group buying has caused the downturn in the format of stores. Jiang Han analyzed to "Consumption Titanium", "The downturn in the store economy is actually the result of the competition of new formats, and the rapid rise of community group buying and fresh tracks has largely seized the market share of traditional supermarkets." ”
The store economy is in full swing
RT-Mart's downturn is actually a microcosm of the economic downturn of the entire store. With the rapid development of the Internet era, e-commerce led by Alibaba and JD.com has quickly seized the market, facilitating people's lives and changing people's shopping concepts. This also makes the rise and fall of Internet retail in stark contrast to the sluggishness of the store economy. At the same time, community group buying through online and offline channels has expanded rapidly. For a time, the store economy faced a multi-faceted attack.
When combing the performance of major stores, "Consumer Titanium" noted that not only did RT-Mart decline in performance, but the entire store format inevitably declined. Among them, Jiajiayue expects a net profit loss attributable to shareholders of listed companies of 260 million yuan to 300 million yuan in 2021, and Yonghui Supermarket expects a net profit loss of 3.93 billion yuan attributable to shareholders of listed companies.
The butterfly effect under the multi-faceted attack has brought about a wave of store closures in the store format. According to incomplete statistics from the Retail Research Center of Lianshang Network, a total of 291 stores were closed in 10 supermarket-listed enterprises in the first three quarters of last year. Taking Yonghui Supermarket as an example, only 48 stores were opened in the first three quarters, and 23 stores were closed at the same time.
In the face of changes in the market, traditional supermarkets have not chosen to sit still, they either compromise with e-commerce to enter the community group purchase, or actively explore new ways out. For RT-Mart, on the one hand, it "teamed up" with Alibaba to enter the jianghu of community group buying, on the other hand, it actively laid out the medium-sized supermarket RT-Mart Super, and said that it would focus on opening stores in the future.
It is understood that in September 2020, RT-Mart's first medium-sized supermarket "RT-Mart Super" opened in Changzhou. This is another new attempt by RT-Mart in the development of multi-channel and multi-format after testing the water boutique supermarket and RT-mini. Different from the mini shop's focus on three meals a day consumption, RT-Mart super meets the rich purchase needs and good consumer experience of customers with a larger area.
Jiang Han told "Consumption Titanium" that the logic of laying out medium-sized supermarkets can only be said to be an attempt, and whether it can succeed is still inconclusive. For the traditional supermarket industry, on the one hand, you can choose a way of playing like Costco and Sam's Club, on the other hand, you must also rethink how to make consumers willing to buy this proposition.