Mass-selling snacks "kill" 6.8 million mom-and-pop convenience stores?

The war between the two leading enterprises of the mass snack system continues to escalate.

Recently, the snack is very busy group and Wanchen Group, the boss and second of the mass snack sellers, will spend 2.2 billion yuan for store expansion and operation, so that the entire track will roll up to a new height.

In the context of the hot track, we have noticed that the industry has begun to have such a voice: the development of mass snack will eventually replace China's large and small mom-and-pop convenience stores.

Is it groundless or is it true?

01. Going north and south, the snack track track is "hot"

On January 17, Snacks is very busy Group (including Zhao Yiming Snacks) revealed that it plans to invest more than 1 billion yuan in the next six months for the development of the national market, focusing on the northern region.

In order to "recruit troops" as soon as possible, the group has launched a great preferential policy for joining: during the period from January 22 to April 30, 2024, joining snacks is very busy and Zhao Yiming can enjoy time-limited preferential measures such as 0 franchise fee, 0 management fee, 0 training fee, 0 service fee, 0 decoration fee and 0 profit. Not only that, but you can also enjoy a one-time subsidy for opening a store, and a subsidy for the excess area of the store.

In the northern markets such as Jiangsu, Zhejiang and North China, Wanchen Group (its main wholesale snack chain brand is good to come) is naturally not far behind. It is reported that in order to carry out a national layout, Wanchen Group plans to invest 1.2 billion yuan in the future.

On the official website of Haoxianglai, preferential investment promotion policies such as 0 franchise fee, 0 management fee, 0 service fee, and 0 delivery fee have also been publicly played.

A total of nearly 2.2 billion subsidies have made the mass snack track "roll" to a new height again.

Returning to the track, behind the large investment of the Snack Group and Wanchen Group is the rapid development of the entire mass snack track and the consistent optimism of capital.

According to the "White Paper on Hard Discounts in China's Retail" released by the new distribution, the number of stores and sales scale of mass merchandiser snack stores have expanded from 2,000 stores and 6 billion sales in 2020 to about 22,000-25,000 stores and 700-80 billion sales in 2023, and the number of stores has increased more than tenfold in just three years.

Since 2023, the capital has accelerated the financing, mergers and acquisitions of mass snack stores, and more than 10 mergers and acquisitions have been announced.

Among them, the more well-known ones are Wanchen Group's announcement that it will merge its "Laiyoupin", "Hao Xiang Lai", "Di Di Di" and "Lu Xiao Glutton", and also acquired another mass-selling snack brand "Wife"; Hunan's "Love Snacks" acquired "Dinosaur and Teddy" and "Hu Weihong Snacks", and also announced that it would control Shaanxi's "Snack Bubbles"; and Snacks is very busy with Zhao Yiming Snacks......

02. Mass selling snacks VS mom-and-pop convenience stores

The fire of mass selling snacks is not only at the capital level.

On the consumer side, more and more consumers have also begun to prefer to buy products through the snack channel.

Among the consumers randomly interviewed in Chengdu, consumers over the 8th floor said that the prices of products in mass merchandiser snack stores are generally lower than the prices of nearby convenience stores, so they are more willing to go to mass merchandiser snack stores to choose products when the distance is not far away.

In fact, the price is indeed a big killer for the rapid development of mass selling snacks. In a busy snack system, a 500ml bottle of Coca-Cola costs 3 yuan in most convenience stores, while it is only 2-2.4 yuan or even lower in some "busy snacks" stores. In the "Zhao Yiming Snacks" store, the 5 yuan bottle of Yuanqi Forest in other stores is only 3.7 yuan, and the price of other products is also much cheaper.

While meeting the needs of mass consumers for snack consumption, mass snack stores have naturally taken away part of the market share of mom-and-pop convenience stores.

After all, compared with the bright and regular space experience, product display and circulation design of mass-market snack stores, husband-and-wife snack stores are more casual and lack standardized management. At the same time, in the commodity circulation link, because the husband and wife store in the sinking market is at the end of the circulation channel, after the dealer's layer upon layer of price increases, its terminal price is usually about 10 points more expensive than the supermarket.

Some people in the industry said that with high-quality goods and standardized and convenient service advantages, it is bound to change the consumption habits and consciousness of consumers, and it will definitely snatch away a large number of customers in mom-and-pop stores. Mom-and-pop stores account for 44% of the entire market, and the huge market allows mass snack stores to tell more good stories.

Of course, there are also people who say that there needs to be a reasonable profit in the link of commodity circulation, although the mass snack track is hot, but in fact their gross profit is not high, the current prosperity is "false", and only after the ebb tide will you know who is swimming naked.

Therefore, although the mass sale of snacks has a certain impact on mom-and-pop convenience stores, as the largest sales channel in China, the tenacious vitality of mom-and-pop convenience stores is immeasurable.

03. Mom-and-pop convenience stores have their own way of survival

According to Kantar retail data, there are currently 7 million convenience stores in China, and the stock size of mom-and-pop stores is about 6.8 million. However, unlike the current mass sales of snacks that mainly target first, second and third-tier cities, the main force in mom-and-pop convenience stores is "entrenched" in the lower-tier market. According to the data, at present, about 30% of mom-and-pop shops are located in towns and villages, and 46% are in third- and fourth-tier cities and county-level cities.

Although mass-merchandised snack stores want to conquer the sinking market, they do not simply copy and paste the goods and services and operating models of first- and second-tier cities, and the methodology of "one trick to eat all over the world" is no longer feasible for the vast Chinese market.

The consumption habits and price carrying capacity of different regional markets are very different, and how to understand the sinking market and make localized and down-to-earth products and services is a difficult problem for all snack chain brands that are eager to conquer the sinking market. Not to mention, the vast territory of the mainland, how to optimize supply chain management and cost control under the scattered stores.

After all, mom-and-pop convenience stores mostly exist in the form of husband and wife stalls, with a service radius of about 50 meters, concentrated in 1~2 nearby communities, with strong penetration, they can flexibly adjust the number and category of products according to the portrait of the service community, and pay attention to the update speed of goods to meet the daily needs of customers.

Mom-and-pop convenience stores also don't only sell snacks, their category structure is usually 30% for beverages, 40% for alcohol, and 30% for daily chemicals, and the main revenue comes from cigarettes, and most of them are currently profitable.

On the other hand, the mass merchandising snack chain stores are more concentrated on the streetside, and it is difficult for them to penetrate into the community like mom-and-pop convenience stores, reaching the end of circulation and consumption, and they are currently unable to mix the sale of tobacco, alcohol, beverages, snacks and daily necessities like mom-and-pop convenience stores.

At the same time, mom-and-pop convenience stores are also evolving, and more and more mom-and-pop stores are beginning to catch up with the gap between them and chain stores, for example, they will follow the example of chain convenience stores, providing ready-to-eat products such as oden and fried skewers, as well as putting online celebrity goodies on the shelves, plus more friendly services and local care, and business is still thriving.

In terms of digitalization, the system is also used by more mom-and-pop convenience chains by means such as automatic replenishment, automatic warehousing, automatic account building, and real-time inventory.

As long as the occupancy rate of the nearby community is high and the quality of the products is more guaranteed, the living space of the mom-and-pop convenience store is larger than imagined. "We don't need too high technology to do this kind of small shop, as long as the price is reasonable, plus the people are good, and we don't have to worry about no business. The owner of Longmen Town, Nanchong City, Sichuan Province, said.

Do you think that the impact of mass selling snack stores on mom-and-pop convenience stores is great?