A number of RT-Mart announced the closure of traditional supermarkets at the end of the membership store?

Cover News Reporter Xiong Yingying

Just after the end of the year, 3 RT-Mart announced their closure. Recently, RT-Mart supermarkets in Zhenjiang, Jiangsu, Deyang, Sichuan, Zhuzhou, Hunan and other places have successively closed stores. According to statistics, at least 13 RT-Mart supermarkets have closed or announced their closures since 2023.

On the one hand, local supermarkets continue to close stores, while on the other hand, warehouse-style membership stores represented by Sam's Club are soaring in China. According to Walmart's latest financial report, net sales in the international market in the fourth quarter of fiscal 2024 were $27.6 billion, a year-on-year increase of 13%, of which Sam's Club and e-commerce business in China performed well. As of the end of 2023, Walmart has 47 Sam's Clubs in China.

In the face of fundamental changes in the market environment and consumption habits, traditional supermarkets are obviously inadequate. However, in addition to the road of closing stores, many businesses are also seeking a way out in terms of improving differentiation and expanding business channels.

△RT-Mart supermarket

The parent company lost 378 million yuan in the first half of the year

RT-Mart is looking for an exit in a member store

On February 17, RT-Mart Sichuan Deyang Store announced that it will cease business from February 26, 2024, and consumers can still carry out after-sales service at the in-store service desk before the 26th, and enjoy all membership rights and interests at any RT-Mart store from the 26th. On the same day, RT-Mart Jiangsu Zhenjiang Xuefu Road Store announced that it will cease operations from February 29, 2024. Two days later, RT-Mart Hunan Zhuzhou store also announced the closure of the business.

Up to now, RT-Mart's official website can still find the relevant information of the above three stores, but the reporter has called the service numbers of the three stores, but no one answers. RT-Mart also did not give a clear explanation for the specific reason for the closure.

"It may be that the lease expires, the general environment is not good, and some stores are not profitable and they are closed, but they will be opened elsewhere. An RT-Mart employee told reporters.

In the view of industry experts, the expiration of leases and business adjustments are only superficial reasons, and the impact of e-commerce, changes in consumer shopping habits, high operating costs of physical stores and homogeneous competition are the key behind them, and RT-Mart's store closure is the result of the combined effect of these factors.

Life is not easy, and this is also more directly reflected in the financial report data. According to the financial report of Sun Art Retail, the parent company of RT-Mart, for the six months ended September 30, 2023, the company achieved revenue of 35.768 billion yuan, a year-on-year decrease of 11.9%, and a net loss of 378 million yuan, a loss margin that widened compared with the same period last year.

△Sun Art Retail Financial Report

In the face of declining revenue, Sun Art Retail is also actively transforming, including vigorously developing its own brand products, increasing the proportion of product differentiation, accelerating store restructuring and large-scale scene transformation, and expanding online multi-channel. At the same time, the company also began to venture into membership stores.

On April 28 last year, Sun Art Retail's first member store landed in Yangzhou, Jiangsu Province. According to the financial report, as of September 30, 2023, the number of paid members of Yangzhou membership stores has exceeded 50,000, and the total number of members is close to 100,000. In the second half of fiscal year 2024, two self-owned stores in Nanjing and Changzhou will also be converted into membership stores and open for business.

A number of traditional supermarkets have closed one after another

But that's not the only way out

Not only RT-Mart, but also many chain supermarkets have been accelerating the closure of stores in recent years.

On October 13 last year, Chengdu Carrefour Shuangqiaozi Store announced that it would stop business with the public. So far, Carrefour has completely withdrawn from the Chengdu market. According to the financial report of Suning Tesco, Carrefour China's parent company, as of June 30, 2023, the number of Carrefour's self-operated stores is 41, and 106 stores will be closed in half a year.

According to the official website of Yonghui Supermarket, the number of stores that have opened so far is 1,001, a decrease of more than 400 from the high of 1,440 in 2019.

After the closure of some long-term loss-making stores and the implementation of measures such as optimizing internal management processes, Yonghui Supermarket's financial pressure has indeed eased. According to the company's latest performance forecast, the net loss attributable to shareholders of listed companies in 2023 is expected to be 1.34 billion yuan, a year-on-year decrease of 1.42 billion yuan.

However, store closures are not the only way out, and traditional supermarkets are trying to find new ways to survive. Zhu Keli, executive director of the China Information Association and founding director of the National Research Institute of New Economy, pointed out that many businesses have begun to try to go digital transformation and seek to cooperate with online platforms to improve sales and customer experience. At the same time, some supermarkets are also trying to attract consumers through store renovation and increasing experiential consumption.

"Transitioning to a member warehouse is also an option worth considering. Zhu Keli believes that member warehouses are characterized by low-cost and high-volume sales, which can attract price-sensitive consumers and establish a stable customer base through the membership system.

However, he also said that this transformation is not applicable to all shopping malls, and needs to take into account factors such as the geographical location of the mall, the target consumer group and the supply chain management capabilities. In addition, the transformation process also requires a large amount of investment in store renovations, system upgrades, and staff training. Therefore, adequate market research and risk assessment should be carried out before deciding to transform.