The economically developed Shanghai is becoming the preferred city for retail giants to develop membership stores, and has become the main battlefield for them to compete for membership models.
At the beginning of the new year, Sam announced the opening of a new store in Shanghai, located in Jufeng Shopping Plaza, No. 205 Jufengyuan Road, Baoshan District, Shanghai. At present, a guardrail has been fenced around the site, which will also be Sam's fourth store in Shanghai, which will open in April this year.
Previously, on December 20, 2021, the People's Government of Nanxiang Town, Jiading District, Shanghai Little Sheep Industrial Co., Ltd. and Wal-Mart China signed a tripartite cooperation agreement, and the signed Sam's Club (Jiading Store) has a construction area of about 22,000 square meters, located in Plot 117, Huiya Road, Nanxiang Town (in the Little Sheep Wisdom Industrial Park). The project has entered the construction phase and is expected to open at the end of 2023.
Renderings of Sam's Club Jiading Store. (Image source: "Shanghai Jiading" official WeChat)
Carrefour's store opening plans are also speeding up. Following the fourth quarter of last year, Carrefour Chengshan store, Carrefour Qingpu Park store has been renovated, and transformed into a member store, recently, Suning Carrefour revealed the third store opening plan, the third store is located in Nanxiang Town, Fengxiang Road No. 3168.
It is worth noting that Carrefour Nanxiang store is only 3.7 kilometers away from Sam Jiading store. Previously, at the time of the new opening, the Carrefour Chengshan store and the Sam Beicai store, which had a "war of words" around whether to force suppliers to "choose one of the two", were only 2.3 kilometers away. There is no doubt that the "confrontation" competition that is not afraid of the "3-kilometer business circle" shows that the two companies are optimistic about the prospects of the membership store format.
The club is not a new format, and Shanghai is also one of the earliest cities in China to introduce a club store.
12 years ago, in 2010, Sam's Club, a high-end membership store under Wal-Mart, a Fortune 500 company, opened its first store in Shanghai, pudong Hi-Tech West Road Store, and since then, the "track" of the club has been silent for a long time. Until June 28, 2019, Sam's second store in Shanghai, Sam Zhao Lane Store, was opened, in October 2019, the American member store "veteran" opened the market cost opened its first store in Minhang, Shanghai, and in October 2020, Hema X member store opened its first store in Shanghai Pudong Senlan Merchants... In particular, on September 26, 2021, the world's largest Sam's Club officially opened in Waigaoqiao, Shanghai, and the club store began to become familiar to more and more Shanghai consumers.
The first store of Carrefour Club, Chengshan Store, opened in the fourth quarter of last year. (File photo)
Why until now, the club has finally ushered in the crowd?
Pei Liang, president of the China Chain Store & Franchise Association, believes that since the outbreak of the new crown pneumonia epidemic, the retail industry, especially traditional hypermarkets, has been affected by the epidemic, online sales diversion, slowing down the progress of transformation and other factors, resulting in poor operating conditions, and retail brands need to use new models to open up growth space. After a series of attempts to transform hypermarkets into community shopping malls and community supermarkets, they found that the membership model of member stores seems to be more suitable for the new situation of the current retail market.
The data shows that the sales scale of the top 100 domestic chains in 2020 fell by 7.2% year-on-year, while the paid membership system has performed remarkablely in recent years, in stark contrast with traditional supermarkets.
"The pain point of traditional supermarkets lies in the serious homogenization of front-end commodities and the constraints of the back-end profit model." He analyzed that the suppliers of traditional supermarkets manage inventory through channel fees, so suppliers with strong financial strength can shop in major supermarkets and occupy shelves; while the purchase of goods in member stores is a buyout and distribution model, member stores can directly purchase the world's most cost-effective goods and manage their own inventory, and because membership fees effectively enrich corporate income, so member stores do not have to rely too much on suppliers. It can be found that the shelves of each member-based supermarket have their own characteristics, the goods are new, more diversified, and the price is more affordable.
It is this piece of "fragrant food" that no one wants to give up, and the member shops that are "queued up and listed" in Shanghai this year also include:
Located in the sub-center of Shanghai Zhenru City, Sam Zhenru Store has started construction and is expected to open at the end of 2022, it will be the first Sam's Store in Shanghai to combine TOD and city park comprehensive development; the second store of Costco Shanghai, an opener in Kangqiao Industrial Zone, Zhangjiang Science City, Pudong, is expected to open in 2022. In the fourth quarter of last year, METRO China announced a comprehensive layout of its member stores, and by the end of last year, METRO China had upgraded 20 stores to member stores, involving 8 cities. It is expected that in the first half of this year, METRO Baoshan store will become the first METRO store in Shanghai to transform into a membership store, and by the end of this year, METRO's 8 shopping malls in Shanghai will be upgraded to membership stores.
Tian Rui, CEO of Suning Carrefour, said that the opening plan of Carrefour clubs also intends to speed up: "We plan to expand 100 paid membership stores in the Chinese market in the next 3 years. Our target user group is quality life users in 4 municipalities directly under the central government and 15 cities above the sub-provincial level. Taking the Shanghai market as an example, after 3 years, there must be a Carrefour club 15 minutes by car. ”