Produced by One View Commercial
Author/Meng Jiayi
Edit/Wooden Fish
The consumption data for the first quarter is out.
According to data released by the National Bureau of Statistics, the total retail sales of consumer goods in the first quarter of this year 120327 100 million yuan, a year-on-year increase of 4.7%. Among them, the retail sales of goods 106882 billion yuan, up by 4.0 percent, and the catering revenue was 1,344.5 billion yuan, up by 10.8 percent. The overall stability is improving, catering is still the majority of consumption, and the game between e-commerce and entities is also approaching a critical point.
F&B is standing, and retail sales growth is sluggish
People take food as the sky, and catering consumption has maintained a high growth rate. According to the data, the mainland's catering revenue in the first quarter was 1,344.5 billion yuan, an increase of 10.8%. The growth rate was lower than the same period last year, but last year was the first year after the impact of the epidemic was removed, and consumption rebounded strongly, and this year it still maintained a growth rate of more than 10%, which is not easy, and the growth rate of catering consumption is still significantly higher than the growth of commodity consumption.
However, behind the strong recovery of the catering industry, industry competition is also intensifying.
First, the growth rate of catering revenue tends to be stable, and the peak and valley phenomenon is obvious with the holiday situation, and the overall situation is in the shape of a "roller coaster", with the difference between the highest point and the lowest point by more than 6 times.
Second, the speed of survival of the fittest in the industry has accelerated. According to Qichacha data, as of December 21, 2023, the number of domestic catering enterprises has exceeded 1.265 million, which is more than double the number of revocations of catering enterprises in 2022. According to business statistics, more than 700 restaurants will be closed in the first quarter of 2024, and many brands will suddenly disappear and go out of business.
Compared with the high-growth catering industry, the growth rate of retail sales of physical goods is relatively weak. According to the data, the retail sales of goods in March were 3,505.6 billion yuan, a year-on-year increase of 2.7%, the lowest increase since August 2023. In terms of breakdown, the categories with better year-on-year growth performance include sports/recreational goods, communication equipment, tobacco and alcohol products, and other categories are slightly flat.
Among them, the retail sales growth rate of sports/recreational goods led the retail sales of goods with 14.2%. One View Business found that this category will begin to be listed separately in 2023, and the growth rate has been high since June 2023, which may be related to the outdoor economy that has exploded in the past two years. Relevant data show that from 2022 to 2023, outdoor sports such as ice and snow, road running, cycling, cross-country, and camping will show explosive growth. In the first half of 2023, the number of orders related to outdoor sports increased by 79% compared to the same period in 2022 and by 221% compared to the same period in 2019. In addition, tobacco and alcohol products have maintained a rapid growth trend, and in the view of One View Commerce, as the epidemic passes, people's demand for tobacco and alcohol products in social, gathering and other occasions has increased, which has promoted the growth of the retail market. In addition, tobacco and alcohol are addictive consumer goods, and compared with other categories, consumers are willing to repurchase tobacco and alcohol, which also ensures the stability of consumption.
However, not all categories have maintained high growth.
The cultural and office supplies category performed poorly, with sales down 8% in the first quarter. One View Business believes that the decline in such supplies may be related to paperless office. In September 2022, the State Council made it clear that by the end of the year, paperless reimbursement, accounting, archiving, storage, etc. of invoices will be realized, which has greatly promoted the paperless process, which is also reflected in the sales data: since 2022, the growth rate of sales of cultural and office supplies has begun to slow down, and it has been declining since 2023.
In addition to office supplies, the growth of daily necessities consumption is also significantly weak, with a year-on-year increase of less than 1% in the first quarter. According to Euromonitor's International Consumer Voice survey, in 2023, up to 74% of global consumers are concerned about the rising cost of daily necessities, and nearly half of consumers want to save money.
The game of online and offline channels is approaching a critical point
From the perspective of sales channels, online retail sales continue to grow, and online channels have become "sweet and sweet".
From January to March 2024, the national online retail sales reached 3,308.2 billion yuan, a year-on-year increase of 12.4%, accounting for 27.49% of the total retail sales of consumer goods. Among them, the online retail sales of physical goods were 2,805.3 billion yuan, an increase of 11.6 percent, accounting for 23.3 percent of the total retail sales of consumer goods.
In fact, the figures for online retail sales have been very impressive. On the one hand, the growth rate has basically stabilized at about 10%, and it was close to 30% at the peak. On the other hand, the proportion of online retail sales remained stable at about 28%, of which the proportion of online retail sales of physical goods remained stable at about 24%.
Online channels account for nearly one-third of the total, and there are three main reasons for this.
First, consumers' spending habits have changed. First, due to the impact of the epidemic, consumer purchase channels have shifted from offline to online. Second, the cost of online shopping is relatively lower - merchants reduce rent, utilities and other expenses, and consumers can buy products of the same quality at a lower price. Third, online shopping reduces time costs, and consumers can find the goods they want in a short period of time, and at the same time shop around. Due to multiple factors, consumers are more willing to shop online.
Secondly, the process of planting and pulling weeds of commodities has formed an online closed loop. With the rise of short videos, live broadcast rooms appear, as long as you open your mobile phone, you can see the goods, understand the feelings of other consumers, place orders with your fingers, and the goods can be delivered to your door. The more "effortless" consumers are, the more they are willing to shop online.
Most importantly, the degree of product standardization continues to increase, promoting the development of online shopping. The so-called "standard products" refer to products with stable and unified commodity characteristics, such as clothing, shoes, mobile phones and other products. For merchants, standard products can not only help with transportation and loading, but also effectively reduce losses. The variety of standard products continues to increase, and merchants are willing to open online channels, and consumers have a wider range of choices. Liu Zhaowen, manager of Beijing Wumart Lenovo Bridge store, once told the media that after the implementation of standardization, the vegetable and fruit counter in the supermarket reduced the loss by 120,000 yuan.
It is not difficult to find that in the past year or so, the growth rate of online channels has begun to slow down, and the proportion has stabilized.
However, even if the online channel tends to stabilize, its diversion of physical consumption should not be underestimated.
The entity remains under pressure
One View Business calculates offline retail sales and their year-on-year growth rates, and compares them to online retail sales. Obviously, since the third quarter of 2021, the growth rate of offline retail sales has been lower than that of online retail sales, and there has been a negative growth trend for a while.
The characteristics of different business formats are different.
In the first quarter of 2021, the growth rate of all business formats was the highest in the past three years, which may be related to the epidemic. The growth rate of specialty stores and specialty stores is very stable, the former is maintained at about 5%, the latter is about 1%, and the growth rate of specialty stores can almost be regarded as "standing still".
Among them, the growth rate of convenience stores is at the forefront, stable at about 7%. According to the 2023 China Convenience Store Development Report jointly released by CCFA and KPMG, the total number of convenience stores in China has increased from 132,000 in 2019 to 300,000 in 2022. At the same time, CCFA also mentioned that the saturation of convenience stores in most cities is in the range of 3,000-9,000 people per store, and there is still a lot of room for improvement from reaching the stage of mature markets, and the retail sales of convenience stores may maintain this high growth trend.
It is worth mentioning that the growth of supermarket and department store formats seems to show a trend of one and the other. In 2022 and 2023, it will be more obvious: in 2022, the growth rate of the supermarket format will be stable at about 6%, and the growth rate of the department store format will be negative for the whole year, and the growth rate of the department store format will begin to pick up in 2023, while the supermarket format will begin to decline, and it will show negative growth for most of the year.
In fact, for supermarkets and department stores, sluggish growth is no longer the main problem, but more important is how to survive.
Judging from the store closure data, according to incomplete statistics from One View Commerce, in the first quarter of 2024, about 1,200 stores in China announced their closures, including Walmart, Yonghui Supermarket, RT-Mart, Hema and other large channel stores. From the perspective of business formats, there are at least 140 supermarkets and 2 department stores.
From the performance point of view, among the 12 supermarket companies that have announced performance reports or performance forecasts, 7 are in a state of loss, 4 are in a state of slight profit, and the Hongqi chain, which has achieved the most remarkable results, has only achieved a net profit of 561 million.
Regarding the situation faced by the physical industry, economist Yu Fenghui told One View Business that online consumption not only brings pressure to traditional retail enterprises, but also provides opportunities for transformation. He pointed out that enterprises should strengthen the integration of online and offline, and improve sales performance through online and offline complementarity, in order to survive. At the same time, pay attention to market changes, adjust product strategies and marketing strategies in a timely manner, and improve service levels in order to live well.
Overall, China's consumer market is recovering steadily, and consumer demand is also being released. In the retail industry, the competition of product strength, the optimization of team management and brand building have become the key to determining the success or defeat. The war is still burning, the market reshuffle is accelerating, and no company can lie flat.