Yonghui killed the two vice presidents, and it was time to wake up to the dream of offline retail

E-commerce newspaper Pro

2024-04-30 10:22Published on the official account of Guangdong E-commerce News

Yonghui supermarket has a big change

In the turbulent retail world, traditional brick-and-mortar stores are experiencing waves of impact.

Yonghui Supermarket has been making frequent moves recently, and the traditional retail giant is facing a painful period of strategic adjustment.

Recently, Yonghui Supermarket officially issued an announcement announcing two major executive changes: the removal of the company's two vice presidents, Wu Guangwang and Lin Jianhua.

The former is because the company believes that its capabilities during the current critical period of transformation no longer match the company's needs, while the latter has another appointment for medical reasons.

At the same time, Yonghui Supermarket's changes are not limited to personnel adjustments, but also go deep into the asset level.

The company disclosed an asset sale plan - the sale of 65% equity of Yonghui Yunjin Technology Co., Ltd., with a total transaction price of about 336 million yuan.

As an important layout of Yonghui Supermarket in the field of financial technology, the divestiture of Yonghui Yunjin's equity shows the adjustment and optimization of the company's non-core business.

It is worth noting that after the equity transfer, Yonghui Supermarket still retains 35% of the equity of Yonghui Yunjin, which shows that the company has not completely withdrawn from the fintech field, but has selectively retained the possibility of the future.

Source: Shanghai Stock Exchange

Behind this series of operations, it can be seen that Yonghui is now under a lot of pressure.

In recent years, Yonghui Supermarket has been losing money.

Looking back on 2023, Yonghui Supermarket's performance has declined significantly, with revenue falling by 12.71% year-on-year, with annual revenue of 78.642 billion yuan and net profit attributable to the parent company of -1.329 billion yuan.

In order to improve the decline of losses, Yonghui has been "saving money".

While optimizing stores, laying off employees and closing unprofitable stores, it is also saving R&D costs, and although the loss has narrowed compared with the previous year, it has still not been able to completely turn losses into profits.

In four years, Yonghui has closed 440 stores, and has lost as much as 8 billion yuan in the last three years. Under the impact of e-commerce and emerging retail formats, Yonghui Supermarket seems to be becoming more and more difficult to do.

In the face of difficulties, Yonghui slimmed down and reduced its burden, including the sale of assets such as Wanda Commercial Management shares, Hongqi chain, etc., to alleviate the tension in the capital chain.

In addition, Yonghui also tried to launch innovative formats such as Super Species, Yonghui Mini, and Yonghui Minsheng Warehouse Membership Store, but in the end it did not succeed.

This year, Yonghui is still actively exploring transformation.

On the one hand, Yonghui has strengthened its online business. According to the financial report, in the first quarter of 2024, Yonghui's online revenue increased by nearly 2% year-on-year, accounting for 18.9% of total revenue.

On the other hand, in January, Yonghui once again tried a new model - catering + retail, and launched Yonghui Canteen to meet the needs of consumers and focus on cost-effectiveness and daily consumption trends.

Yonghui Supermarket understands that the pains of transformation are inevitable. It optimizes and adjusts, hoping to regain growth through strategic adjustment, and finally achieve "rebirth through the cocoon".

Yonghui Supermarket's personnel changes and asset sales are the epitome of changes in the retail industry.

In the offline retail industry, where the overall trend is declining and the competition is fierce, many companies are adjusting their management, focusing on their core businesses, and revitalizing their assets in order to keep up with the pace of transformation in the fierce competition.

The major retail giants have been making moves recently

Recently, retail giants have been making strategic adjustments and transformations in response to changes in the market and consumer demand.

As a pioneer of "new retail" with high hopes from Alibaba, Sun Art's recent financial situation is not optimistic.

According to the latest financial forecast, Sun Art Retail may lose as much as 1.6 billion to 1.7 billion yuan this fiscal year, compared with the net profit of 78 million yuan in the previous year, the decline is staggering.

This loss was largely attributable to the operating conditions of stores with negative cash flow and the shrinkage in the value of right-of-use and fixed assets due to store closures, as well as the knock-on effect of goodwill impairment.

Excluding impairment losses, Sun Art Retail's underlying loss is expected to shrink to between $600 million and $700 million, but it is still not to be underestimated.

RT-Mart announcement

Faced with this dilemma, Sun Art Retail has taken a series of actions to turn the situation around.

The company plans to close loss-making stores that have dragged down performance, and Sun Art Retail is considering selling non-core or underperforming assets to further reduce losses.

At the same time, the company will concentrate on the Yangtze River Delta, Pearl River Delta, Shandong Peninsula and other advantageous areas for intensive layout, these areas not only have strong consumption capacity, but also have a high degree of market maturity, in these places, Sun Art can obtain better development opportunities.

Hema Fresh is also currently in a critical period of strategic adjustment. This year, Hema announced major personnel changes - founder Hou Yi announced his retirement. Recently, Hema has also reintroduced the membership system and upgraded and adjusted the membership benefits.

Source: Freshippo

As one of the representatives of new retail, Hema has been exploring diversified retail formats, from Hema neighborhood focusing on community services to small convenience stores such as Hema MINI, with the aim of covering the market and consumer needs more broadly.

However, frequent experimentation with different formats may blur the brand positioning, and it may be difficult for people to clearly define the brand image of Freshippo, which will affect their brand loyalty.

Therefore, Freshippo's return to membership can be seen as a re-examination of itself and a return to its original intention.

The dilemma between Sun Art Retail and Hema is actually a common problem in the entire offline supermarket industry.

Under the impact of online e-commerce, brick-and-mortar supermarkets are not only facing the problem of declining customer traffic, but also reducing sales. In addition, they are also burdened by high rents and personnel expenses offline.

Therefore, traditional supermarkets urgently need to transform, see their own advantages and disadvantages, and keep up with the pace of the market.

At present, brick-and-mortar retail still has irreplaceable advantages, such as shopping experience, immediacy, and so on. Fat Donglai's transformation of BBK is an affirmation of the potential of physical retail, showing its confidence and determination in the physical retail industry.

Fat Donglai has transformed BBK's employee treatment, product quality, supply chain, service improvement and so on.

BBK's Changsha Meixi Lake store originally had an average daily sales of about 150,000, but its performance continued to rise after the adjustment, and even reached 1 million in just a few days.

The adjusted performance of the BBK Changsha Meixi Lake store

Hema Fresh once again made efforts to develop the membership system, Sun Art Retail began to renew its stores, and Fat Donglai Group made every effort to transform BBK...... The move by the retail giants also shows that the industry as a whole is undergoing significant changes and struggling to adapt to new trends.

The offline retail industry must be transformed and upgraded

In order to cope with the impact of Internet e-commerce and the changes in consumer preferences, the offline retail industry is going through a period of transformation.

On the one hand, the rise of discount formats has become a highlight of the industry, such as Yonghui Supermarket, Hema and other traditional supermarkets have launched discount stores and discount zones to reduce costs through supply chain optimization, provide more attractive prices, and meet consumers' pursuit of cost-effectiveness.

On the other hand, digitalization has become the key to the transformation and upgrading of offline retail, and through data analysis, digital operation and other means, the product structure is optimized, the customer experience is improved, and the integration of online and offline is realized.

Moreover, offline retail has begun to pay attention to scene experience and establish emotional connections to meet the diversified and personalized needs of consumers.

For example, RT-Mart's creative marketing uses interesting advertising slogans "fireworks literature" and "cold palace vegetables" to shorten the distance with young people and attract customers to return offline.

RT-Mart's "Cold Palace Vegetables" advertisement

Vanguard, on the other hand, has opened boutique supermarkets and upgraded its business formats, such as BLT supermarket, to emphasize quality life and meet consumers' pursuit of high-quality goods and services.

Community-based operations are also becoming more and more critical, and small and accessible community convenience stores have become an indispensable part of retail transformation due to their convenience and intimacy, further consolidating the position of offline retail in consumers' daily lives.

We should realize that the transformation and upgrading of offline retail is not only a technical level, but also involves the adjustment of corporate strategies and the discovery of consumer needs.

Enterprises need to change their thinking to focus on improving consumer experience, and at the same time solve the problems of employee development and benefit distribution to ensure the sustainable development of enterprises.

In addition, the transformation of traditional supermarkets also needs to pay attention to new business models, such as warehouse membership stores, community-based supermarkets, etc., as well as establish emotional connections with consumers, and enhance brand influence through warm and creative marketing activities.

The key to the future of offline retail lies in how to combine digital means to improve efficiency, optimize the supply chain, and create a unique experience that is different from online to meet consumers' dual pursuit of quality and emotion.

Author | E-commerce Jun

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