In the transformation of brick-and-mortar retail, hypermarkets are starting to change. Recently, Carrefour's first fusion renovation store in Beijing was officially opened. The Beijing Business Daily reporter learned that the upgraded store goods have been optimized, SKUs have been reduced, pre-made dishes and small household appliances have been added, and the internal consumption flow has also been adjusted.

The "one-stop shopping" undertaken by hypermarket formats has been differentiated by fragmented shopping methods. The "smaller" store has become one of the main demands of supermarkets. Under the new trend of consumption, the competition in the hypermarket industry is intensifying, who can be the first to find a development direction that suits them?

Halve the business area and SKU

The old store has been reopened, and Carrefour's first integrated transformation store in Beijing has entered the market. Carrefour optimized the products in the Shuangjing store, and the sales area of the store was reduced from 1,5 square meters to about 6000,2 square meters. The number of SKUs in the store has been reduced from 5,1 to 2,<>, and a small home appliance zone and Suning Yipin area have been added.

At the same time, Carrefour re-planned its business format, product layout and consumption flow. The Beijing Business Daily reporter saw at the scene that Carrefour stores also added a pre-made vegetable area and a product tasting area. According to reports, in 2023, Beijing Carrefour will promote the construction of pre-made dishes in stores in phases, and carry out the planning of supporting tasting experience, and will continue to promote the pre-products of Beijing cuisine, Cantonese cuisine, Sichuan cuisine, Hunan cuisine and other special dishes on the shelves, providing consumers with staple food, hot dishes, cold dishes, desserts, breakfast, soup and other categories, with annual sales expected to reach more than 2000 million.

The checkout line of the store is shortened and re-leasing is underway. It mainly faces the surrounding life service formats. At present, Carrefour Shuangjing store has a laundry and redressing shop.

The third floor of the renovated Carrefour Shuangjing store was changed from a supermarket store to a Suning Tesco home appliance area, and at the same time implemented services such as home appliance cleaning, mobile phone repair, trade-in, home decoration, and intelligent experience. According to reports, by the end of April this year, all 4 stores of Beijing Carrefour will be transformed into community quality life centers.

It is worth noting that hypermarkets have begun to "slim down". Since 2017, Walmart's newly opened hypermarkets have a business area of several thousand square meters. Previously, hypermarkets had a business area of more than 1,1 square meters. Before the renovation, the Wumart Lenovo Bridge store had a business area of 2,6000 square meters, and the store operated at a loss. After the renovation, the store business area was reduced to 1,8 square meters, the number of SKUs was reduced from 9000,<> to <>,<>, the store sales increased, and the operation turned from a loss to a profit.

Fragmented consumer cutting market

In the transformation of physical retail, different formats are clearly differentiated, while new models and new format stores are sharing the market accumulated by hypermarkets. Walk out of Shuangjing subway station to Carrefour Shuangjing store, less than 1 km away, three fresh supermarkets open their doors at community property stores along the way. At 10 a.m., many consumers buy vegetables, staples and other goods in these fresh supermarket stores.

In the Shuangjing community, the three fresh supermarkets and Carrefour stores are jointly operated, which means that the three fresh supermarkets and Carrefour Shuangjing stores jointly share the flow of customers in the community, and to a certain extent, they restrict and influence each other.

According to iMedia Consulting's "2021-2022 China Convenience Store Industry Development Status and Consumer Behavior Monitoring Report", the market size of China's convenience store industry is growing year by year, and it is expected to reach 2023.3566 billion yuan in 18, and the number of stores will reach 5,<>. In addition to convenience stores, more and more community consumption patterns are emerging to facilitate people's lives. Fresh supermarkets and small community shops are opening more and more, cutting away the "cake" of hypermarkets.

It is worth noting that community consumption has become a new sector with rapid growth in social consumption, and its consumption scenarios are more suitable for the majority of urban residents, and community consumption may become a new engine for economic growth. Relevant data mentioned that under normal circumstances, 30%-40% of urban residents' consumption expenditure is concentrated within 1 km of the community, and 92% of residents choose to solve "firewood, rice, oil, salt, sauce and vinegar tea" at their doorstep, and with the impact of the epidemic, this proportion has accelerated in recent years.

"Sinking" approaching consumers

Whether it is changes in consumption habits or policy guidance, they are "urging" hypermarkets to follow the trend and accelerate the speed of transformation.

Under the intensification of competitive pressure, consumption at the "doorstep" has attracted much attention, and favorable policies are also tilted in this direction. According to the "Several Measures to Accelerate the Construction of a Quarter-Hour Convenient Living Circle and Promote the Transformation and Upgrading of the Life Service Industry" previously issued by the Beijing Municipal Bureau of Commerce, in 2025, the city will achieve full coverage of the quarter-hour convenient living circle, forming a diversified, diversified life service system covering urban and rural areas.

For the landing of the new model store, the relevant person in charge of Beijing Carrefour said that Carrefour will continue to promote the upgrading of the store format of the community quality life center, based on Carrefour and Suning Tesco stores, to build a community commercial system with complete functions, perfect services and diverse levels, according to the location of the store and the service needs of residents, facilitate consumers' daily life, improve the urban commercial structure, and help Beijing build a quarter of an hour convenient living circle.

Wang Peng, a researcher at the Beijing Academy of Social Sciences, pointed out that from an internal point of view, hypermarkets with large scale, many personnel and a large supply chain system can produce economies of scale, but when external demand changes, these are easy to become a burden for enterprises. In addition, the "post-90s" and "post-00s" pursue personalized and high-quality goods, and the original supply chain of hypermarkets has been greatly challenged.

Optimizing products, tilting online, and increasing marketing will also attract consumers to stores. Meng Qi, an expert in the retail industry, said that in addition to improving the efficiency of traditional offline operations, hypermarket companies should also actively embrace online development, such as home service, social marketing, etc., to reshape brand and product image, and reverse the current word of mouth.

Beijing Business Daily reporter Wang Weiyi