EqualOcean has learned that the first Carrefour (Chinese: 家乐福) store in Shenzhen, the second in China, has officially ceased operations since June 10 due to poor operations, sparking media reports and concerns. The old store, located in Shenzhen's Nanshan district, has served Shenzhen residents for 27 years, and residents near the store have expressed regret.
Carrefour is not alone in closing its stores. Carrefour's rival, Walmart (Chinese: 沃尔玛), has also launched a wave of big-box store closures in recent years. According to media statistics, from 2016 to 2022, Walmart closed a total of more than 130 hypermarkets in the mainland Chinese market.
Factors such as the impact of e-commerce, rising offline costs, and changes in consumer shopping habits have made it increasingly difficult for traditional supermarkets to operate, forcing them to close stores. Analysts say that in terms of the ecological evolution of supermarkets, from the 1.0 era of kiosks and mini-markets to the 2.0 era of hypermarkets, it has now long entered the era of boutiques and new retail 3.0. The closing tide of traditional supermarkets and hypermarkets is the inevitable development of the times.
In stark contrast to the tide of traditional supermarket closures, warehouse membership stores continue to grow at a rapid pace. Sam's Clubs (Chinese: 山姆会员店) is accelerating its layout in the Chinese market and expanding its stores at a much faster pace. At present, Sam's China has opened 43 stores, and the fifth store in Shanghai, a new store located in Shanghai Putuo District Zhenru City Sub-center, has opened, and Walmart plans to open 30 new Sam's Clubs in mainland China in the future.
Sam's Club has become a new growth engine for Walmart in the Chinese market. According to Walmart's earnings data, Walmart China's Q1 net sales were $5.3 billion, up 28.3% year on year, mainly due to the expansion of Sam's Clubs and online channel sales performance, and Sam's Club's own brand Member's Mark also achieved 46% sales growth.
In addition to Sam's, old rival Costco (Chinese: 开市客) continues to accelerate its presence in China, and domestic new retail giant FRESHIPPO (Chinese: 盒马) launched its first warehouse member's store in September 2022. Older players, including RT-Mart(Chinese: 大润发), Carrefour, and Metro(Chinese: 麦德龙), are also actively expanding the warehouse membership store model.
However, doing well in warehouse membership stores is not as easy as one might think. Like traditional supermarkets, warehouse membership stores have a very obvious brand effect, a warehouse membership store usually radiates around the regional market, forming a regional brand aggregation effect. Behind the brand advantage and effect of a warehouse member store are the supply chain management ability, domestic and international sourcing ability, and rapid market response-ability, which will directly determine the overall competitiveness of a warehouse member store's products. From these aspects, the advantages of Sam, Costco, FRESHIPPO, and other key players are apparent.
However, behind the continuous development of warehouse member stores, there are some hidden risks that deserve attention. First of all, the warehouse member store has appeared serious homogenization phenomenon, from the model, goods, supply chain and other aspects of almost no difference, the industry into the quagmire of homogenization; Second, the warehouse member store is not suitable for all markets, especially in the first and second-tier cities, the new first-tier cities, relatively speaking, the market capacity is ultimately limited, and warehouse member store sink market is extremely limited, the county below the prefecture-level city, are not enough to support the warehouse member store operation.
In the future, the warehouse membership store model is promising, and the market is attractive. But for the forces that want to enter the game, the layout of the warehouse member store to be reasonable, not in the number of more, but in the fine, to refine, boutique, sustainable operation, rather than a herd, leaving the market hidden problems.