Wen | Zhang Kexin of the Weekly Magazine of Finance and Economics
Editor| Yang Jie
At the beginning of March, when the A-shares and Chinese stocks were "bleeding into a river", the investors of Yonghui Supermarket ushered in a "surprise": the stock price of Yonghui Supermarket began to pick up.
On March 8, Yonghui Supermarket released its "monthly report" for the first time, announcing the performance report for the first two months of 2022. On the same day, Yonghui Supermarket won the first stop in nearly three years. In the next six consecutive trading days, the stock price of Yonghui Supermarket rose by 25%; on March 9 and March 14, the company closed two consecutive stop-and-go boards, causing more than 200,000 of its shareholders to exclaim "out of the demon".
Yonghui supermarket, is it going to "bottom out and rebound"?
According to the 2022 monthly performance report released by Yonghui Supermarket, in January and February 2022, the company's revenue reached 20.4 billion yuan, an increase of 3% year-on-year; in the same period, the operating profit reached about 760 million yuan.
This is the first time that Yonghui Supermarket has disclosed monthly data since its listing. Just a trading day before the release of the performance report, Yonghui Supermarket's stock price had just bottomed out to 3.32 yuan, the lowest value in nearly 8 years. The secretary of the board of directors of Yonghui Supermarket admitted to investors that "the company does feel that the stock price has fallen more severely", "We are mainly to convey to the market the signal that the company is still operating normally".
However, some insiders are worried that the rise in yonghui supermarket's stock price this time may also be a "flash in the pan". After all, just on January 28 this year, Yonghui Supermarket just pre-disclosed the company's first annual loss in 11 years of listing, and its net profit in 2021 was -3.93 billion yuan, down 320% year-on-year. "The growth of operating profit in January and February this year is most likely investment income. Yonghui Supermarket is in a period of strategic transformation, and it is difficult to reverse the loss of operating profits for the time being. ”
From March 15 to 18, the stock price of Yonghui Supermarket has experienced a slight correction, falling by 3.2% overall, closing at 4.11 yuan / share, with a total market value of 37.3 billion yuan.
Yonghui warehouse, can not catch young people
In Beijing Huilongguantai Hualongqi Plaza, a Yonghui supermarket red label store that has been open for more than 5 years has been officially upgraded to a warehousing store in late June 2021 after half a year of renovation, with an area of 5,290 square meters to 5,556 square meters, and the SKU has been reduced from more than 10,000 to about 4,000.
"Longqi Plaza store is known as the first Yonghui warehouse store in Beijing. I came here to take a look and found that nothing had changed, just removed some of the traditional shelves and added an additional baking and flower area. Wang Yu, a 25-year-old white-collar worker in Beijing, told The Weekly Magazine of Finance and Economics. Many consumers who live nearby also complained that the Yonghui warehouse, which was transformed from the old store, was "nothing special, and even the signboard was not changed."
The "warehouse-type retail" that began to test the waters in the middle of last year is the transformation focus proposed by Yonghui Supermarket in 2021.
Yonghui Supermarket said in its 2021 semi-annual report that since the first warehouse was landed on May 1, the sales of warehouse stores during the reporting period reached 150 million yuan, an increase of 139% year-on-year. However, as the first financial report year after Yonghui Supermarket implemented the model, Yonghui Supermarket recently released the 2021 annual performance report, but the company experienced the first revenue decline since its listing.
In Wang Yu's cognition, the warehouse store should be like Wal-Mart's Sam's Club or Costco, with a simple, industrialized style of high shelf layout, while Yonghui's warehouse store focuses on the previous parity model such as the red label store (cheap hypermarket), taking the "minsheng supermarket" route. Not only this store, but also the Yonghui supermarket warehouse store in many places has played a conspicuous red signboard of "daily parity, consistent".
At the same time, Yonghui Warehouse does not charge membership fees. This is its unique feature, but some people in the industry believe that the reason why Yonghui Warehouse does not have the strength to charge membership fees at present is not ruled out.
For young white-collar workers such as Wang Yu, the membership store model is not unfamiliar. "In recent years, member stores such as Costco, Sam's and METRO PLUS have blossomed all over the country, especially in first-tier cities, and membership fees have long been no obstacle for everyone to visit supermarkets. I think that the most important thing in the iteration of new formats is to meet the changes in consumer demand, either like Sam's main customized products, which is convenient for a family or a group of friends to purchase; or like Hema, pay attention to store decoration and main selected goods to meet everyone's shopping experience and pursuit of consumer quality. The price of the goods in the club is not a problem for them, "what you buy is high quality and peace of mind."
The difference between the business model of the warehouse club and the hypermarket model lies in the pricing of goods and the characteristic customized product model. For Sam's Club and Costco, etc., they are through the membership system, select the middle and high consumer groups among users, and provide them with specific goods, create "explosive products" and private brands, in order to distinguish them from ordinary retail hypermarkets.
"This is a very test of the company's supply chain procurement and operation capabilities. For example, Costco's product characteristics stem from the supplier's complete compliance with the company's requirements to create product packaging and specifications, while strictly controlling the gross profit margin within 10%, once the gross profit margin of the product exceeds 14%, it needs to be reported to the CEO separately, and the board of directors discusses and approves it. Ding Liguo, a retail and marketing expert, said, "But Yonghui Supermarket does not currently have such capabilities." ”
Perhaps, this is also the reason why the warehouse stores of Yonghui Supermarket have been transformed from the original hypermarket stores and mainly focus on the parity model. In the early days of its transformation of the warehousing system, there was news that many suppliers were bitter because of Yonghui Supermarket's strong implementation of low-price demand.
In addition, the service of Yonghui Warehouse has also been criticized on social platforms. Many consumers complained that the attitude of the clerks responsible for cashiers, weighing dishes and shelf attendants in the store was not good. "There were also staff in the aquatic area who let us fish by ourselves." Wang Yu frowned.
In her opinion, Yonghui Warehouse is also a bit "outdated" in terms of customer base. "When I went, I found that there were very few young people, and most of them were middle-aged and elderly."
Previously, Jiuqian platform data had said that the user portraits of Yonghui Supermarket were older, especially in the morning, mostly middle-aged and elderly users. A consumer who lives near Yonghui Supermarket also said that the main parents at home like to go to Yonghui Supermarket to buy vegetables, "and often have to get up early to grab fresh food with the elderly people nearby."
But now, Yonghui Warehouse still hasn't captured the hearts of young people.
(Photo/Visual China)
At present, young people have gradually become the main force of mass consumption, and the cheap, fresh and fresh products that Yonghui has long relied on are often attracted by middle-aged and elderly consumer groups.
Over the years, Yonghui has taken pains to cater to young people. With the emergence of new retail formats such as Hema Fresh and Internet Fresh Supermarket, Yonghui, who "loves to learn", has repeatedly tested the new model. In order to ensure the stable growth of listed companies, the two brothers of Yonghui founders even "separated" to continue to look for the company's second growth curve.
From the launch of the "super species" in 2016, which focuses on the "supermarket + catering" format, to the "Yonghui mini" that later positioned the community fresh supermarket, as well as Yonghui Life and Yonghui Club, Yonghui has made many attempts, but has not succeeded in driving the growth of Yonghui.
Yonghui's "super species" once claimed to open 100 stores in 2018, but until the first half of 2021, the total number of stores did not exceed 100, and the news of the closure of stores in Chongqing, Shenzhen and other places has been reported. Yonghui then publicly responded that "super species" is no longer the core business of the group, and the main business of Yonghui in the future is to "return to the supermarket".
At that time, Ding Liguo once told the "Finance and Economics World" weekly that Yonghui's fresh products accounted for too high a model, resulting in its need for a lot of cash flow support, when trying new formats, it was also seriously constrained by financial problems.
2021 has become the "first year" of the transformation of retail hypermarkets to warehousing models, and the veteran paid membership retail brand Sam, the traditional hypermarket brand METRO, and the emerging players Hema and Fudi have all made efforts. Yonghui also clearly defined the focus of the Group's development as "transforming warehouse-based retail". However, compared with the previous active layout of "super species", this time Yonghui's pace is much more cautious.
Yonghui Warehouse opened its first store in Fujian on May 1, 2021, and within the next month, 20 warehouse stores were reopened nationwide, mainly in Fujian, the base camp of Yonghui Supermarket, as well as first-tier and new first-tier cities such as Beijing, Shanghai and Chongqing. "In the future, Yonghui will continue to speed up the transformation of warehouse stores and maintain the steady growth of warehouse stores." A person close to Yonghui told Caijing Weekly.
However, at present, the smoke of warehouse stores is everywhere, users have also issued questions about the increasing homogenization of the products of each terminal store, and the upstream and downstream suppliers of the industry have also reported that they are facing the situation of "choosing one of the two" of each brand. With the transformation of old stores, no membership fees, and the lack of customized specialty products holding high the banner of "affordable", Yonghui Warehouse still seems to be somewhat "unremarkable".
Yonghui "down the mountain"
Yonghui's stock price temporarily "warmed up", but investors who experienced Yonghui's once falling into a trough did not restore confidence.
"Two years, I waited for two years, and finally waited for a stop-and-go board in Yonghui Supermarket." Liu Yun shook his head and said, "But this has nothing to do with me anymore." ”
In the middle of 2020, Liu Yun, who observed Yonghui Supermarket for half a year, bought almost 50,000 shares at a price of about 8 yuan per share. "In the first quarter of that year, Yonghui Supermarket rose particularly well, the stock price rose directly from 7 yuan to 11 yuan, and I thought at the time that as long as the company can continue to grow as before, there should be no big problem."
However, since April 2020, after the stock price of Yonghui Supermarket reached 11.05 yuan, it has "fallen and fallen" all the way. At the beginning of this year, when its stock price fell to around April, Liu Yun finally endured the pain of liquidating all of its positions. "They all say ' low position does not come out, high position does not love', but I really can't hold it!"
Behind the brief stock price rally brought about by the announcement of Yonghui monthly report, in six trading days, the turnover rate of listed companies has been maintained from the past average of 0.5% per day, soaring sharply, reaching a maximum of 3.65% in a single day. "Many of my friends have taken advantage of this wave of price increases and rushed to 'run'." Liu Yun said.
After the emergence of the epidemic in 2020, many large supermarkets undertook the food supply function of the past wet market and farmers' market to residents, so the performance increased rapidly. By the first quarter of 2021, Yonghui Supermarket's operating income increased by 32% year-on-year, much higher than the previous average growth rate, and Yonghui Supermarket briefly crossed the mark of 100 billion yuan in market value.
But the good times were short-lived. Since the second half of 2020, the community group buying war has entered a white-hot situation, including Internet giants such as Meituan and Didi, and have stolen the business of many offline supermarkets with huge subsidies. The community group buying format with fresh food as the entry point also hit the "life gate" of Yonghui Supermarket.
As one of the first batch of circulation enterprises in China to introduce fresh agricultural products into modern supermarkets, Yonghui has been hailed as a model of "agricultural reform". In 2018, Yonghui Supermarket's fresh business revenue accounted for 45%, higher than other competitors. At that time, the fresh revenue of RT-Mart, Wumart and other stores accounted for about 20%-30%.
In recent years, the aura of hypermarkets has gradually dissipated. In 2019, Carrefour and METRO have successively "sold themselves" due to poor management; among local brands, RT-Mart and Wumart supermarkets have also reported the contraction of closed stores. However, Yonghui Supermarket has gradually developed from 380 stores in 2015 and officially entered the "era of a thousand stores" at the end of 2020. From 2018 to 2019, the company maintained a revenue growth rate of about 20% per year, with a profit scale of about 1.5 billion yuan per year. Some insiders believe that the fresh business is the key factor for Yonghui Supermarket to retain the position of domestic hypermarket giant.
"Freshness is recognized as hard work. The production end of the domestic fresh industry is still relatively primary, and the degree of supply chain standardization is not high, so it is extremely difficult to use a standardized supermarket system to manage non-standardized fresh business. At the same time, the high loss rate and high logistics costs make the gross profit margin of fresh products generally not high. The industry insider said. But he also believes that the fresh food business, as a high-frequency demand of consumers, also has an absolutely irreplaceable advantage of other products.
Yonghui Supermarket has built a competitive barrier for itself in the field of fresh food. The company has developed a set of ERPs exclusive to the fresh business; invested in upstream companies to further master the supply chain; and built its own logistics. The gross profit margin of the fresh business is not high, but Yonghui Supermarket relies on the differentiation strategy of focusing on fresh food, and still achieves expansion in the face of the decline in the performance of other hypermarkets, resisting the impact from e-commerce channels.
But the emergence of community group buying gave Yonghui Supermarket a heavy blow. Yonghui's "chasing the wind" new format transformation over the years has not achieved the success of imagination, pulling its performance out of the mud.
In the first half of 2021, the overall revenue of Yonghui Supermarket fell for the first time since its listing, with a total revenue of 46.8 billion yuan, a decrease of 7.3% year-on-year, and a net loss of 1.1 billion yuan.
At that time, the seven major theaters under the traditional "war zone system" of Yonghui Supermarket were "completely destroyed", and none of them recorded revenue growth during the reporting period. Among Yonghui's two major business segments, "Fresh & Processing" and "Food Supplies", the former was seriously frustrated, with revenue falling 12% year-on-year in the first half of 2021, and gross profit margin falling by nearly 5 percentage points, leaving only about 10%.
In July 2021, Zhang Jingyi, the secretary of the board of directors of Yonghui Supermarket, who had accompanied the company for 12 years, left his job, and one of his circle of friends went viral on social media. In it, Zhang Jingyi wrote, "Sorry, I went home to honor my parents." He mentioned that Yonghui "has achieved a common dream in ten years and climbed to the top of a mountain of thousands of stores and hundreds of billions of dollars", and also said, "We are going down the mountain to restore physical fitness, update equipment, and reorganize logistics."
When Zhang Jingyi left, yonghui supermarket's stock price had fallen to about 4.8 yuan, a drop of nearly 60% compared with the 2020 high of 11.05 yuan.
On August 5, 2021, Li Guo, CEO of Yonghui Supermarket, resigned, and Li Songfeng, the CTO of the company for only half a year, took over as CEO.
Along with the new leader taking office, Yonghui made drastic adjustments. On the one hand, Yonghui decided to transform warehouse-based retail, on the other hand, Li Songfeng put forward the slogan of "Technology Yonghui".
In this round of adjustment, Yonghui abolished the original "war zone system" and changed it to a new organizational structure directly managed by the headquarters platform and directly responsible for the general managers of various provinces and regions.
At the same time, Yonghui promotes flat management, and establishes an organizational structure of a large science and technology center that matches the strategy of "Science and Technology Yonghui", which is clearly divided into three major sections: front desk, middle office and back office. The front desk is the front office operation department represented by the province and region, which is mainly responsible for the operation ability and customer service degree of the store; the middle office is the middle office service supported by procurement, supply chain, marketing, technology and other sectors; and the back office mainly includes legal, financial, human resources and other functional departments. In the eyes of industry insiders, this is a typical Internet company management model, which is consistent with Li Songfeng's experience in the past decade in JD.com's mobile technology department, platform transaction research and development department and middle office sharing technology department.
Can the new "Technology Yonghui" drive the company to the top again?
Can Yonghui's new transformation be successful?
The traditional "war zone system" and partnership system in Yonghui's organizational structure have been widely used in the industry.
In the past, the successful development of Yonghui Supermarket was inseparable from the courage of the founder Zhang Xuansong and the two brothers who dared to "delegate power and responsibility". "The top priority of the traditional retail industry is the detail management, and the detail management relies on people. In the same store, the performance of different store managers may vary greatly. Ding Liguo said.
In the past, Yonghui Supermarket used store profits to bind the salaries of personnel at all levels of the store, which greatly mobilized the employees' service awareness and work enthusiasm; at the same time, it also decentralized and authorized the employees. "Especially for employees in the fresh business, their staffing ratio, rights and responsibilities, and income are higher than others in the same store, laying a solid fresh foundation for Yonghui." According to the above-mentioned people close to Yonghui.
As for the theater system, in 2019, Li Guo publicly stated that it "can not only promote mutual learning between theaters, but also promote mutual competition and promote development through internal competition."
However, in Li Songfeng's view, "the original 'theater system' led to excessively long communication links between various theaters and headquarters, low efficiency, and greater resistance and weak penetration when the headquarters strategy was implemented." ”
From the past "decentralization of powers and responsibilities" to the sudden tightening of company management and the abolition of the "war zone system", it is inevitable to involve the maintenance of the relationship between the company's original war zone team and procurement system. In the eyes of industry insiders, under the loss, Yonghui has the meaning of "painful thinking, scraping bones and healing wounds", but it is bound to face huge pressure; but whether it is sooner or later, this is the "only way" for Yonghui.
"As early as five or six years ago, we proposed to Yonghui a similar technological transformation, that is, to adjust the strategic direction based on technology application." A consultant told Caijing Weekly that compared with wal-mart, Carrefour and other retail companies, Yonghui's technology application is not too much to put the first priority. "But the development stage of domestic supermarkets is different, and Yonghui has been in the stage of 'attacking the city' for many years." Under this goal, the partnership system and the war zone system at that time were indeed more conducive to its accelerated layout and covered more areas. ”
The aforementioned consultant also said that for many years, extensively achieving the "scale of a thousand stores" has always been the first goal of Yonghui's development, which is why when around 2015, including hema and community fresh supermarkets, Yonghui also expressed anxiety and began to follow suit, but "how to learn badly" reasons.
At the end of 2020, Yonghui announced that it has stepped into the "Era of a Thousand Stores" and achieved its goal. "Since this time, Yonghui has really begun to think about the next stage of things, that is, how to achieve refined operation through technology." As for what problems "Technology Yonghui" specifically wants to solve, the above-mentioned consultants believe that solving labor costs, achieving omni-channel operation and adapting to consumer needs are all problems facing Yonghui at this stage.
Traditional retail is a labor-intensive industry, but in recent years, domestic labor costs are growing rapidly. "Ten years ago, Walmart recruited a cashier, the salary was only seven or eight hundred yuan, and the resume submitted was still a lot." An industry insider said, "But now, with the development of urbanization and the impact of e-commerce live broadcasting, traditional offline retail is facing a serious labor shortage, and the rising wages may not necessarily be able to recruit people." ”
At the same time, under the impact of online e-commerce, the technological transformation of retail enterprises has become an inevitable trend. In the eyes of the outside world, Yonghui is not early to enter the game at this time. As of the first half of 2021, Yonghui online sales accounted for less than 15% of the main revenue. In 2020, the MAU (monthly active users) of yonghui life APP is about one million, while the MAU of Hema and Daily Excellent Fresh has basically exceeded 10 million. Being able to open up omni-channel retail and develop in synergy with the home business will also help Yonghui's performance improvement.
Yonghui is striving to improve the company's operational efficiency through digital operation and digital supply chain construction. It is understood that Yonghui Science and Technology Center has completed the formation of a thousand-person team, and yonghui's self-developed full-link retail digital system "YHDOS" has also been put into use on a large scale in Fuzhou and other places.
However, Yonghui's determination to transform technology is still not to be underestimated. "In 2021, the company's investment in science and technology has exceeded 600 million yuan, and in previous years, it may have been 200-300 million yuan." The above-mentioned person close to Yonghui told Caijing Weekly that the company will continue to invest this year, "not less than the amount of investment in 2021." ”
However, with increased investment, Yonghui wants to quickly turn losses into profits, and I am afraid it will take time. According to the pre-disclosed performance report of Yonghui Supermarket, the company's net profit in 2021 is -3.93 billion yuan, which has almost lost the net profit of the past two years. "It can only be said that turning a profit will be the company's goal this year." The aforementioned close person said, "After all, the transformation of science and technology itself is not a thing that can be effective immediately." ”
From "Agricultural Reform Super" to "King of Chinese Supermarket Chains", Yonghui Supermarket has always been an industry leader featuring fresh food in the past. On the way forward, Yonghui is firmly determined to open the ultimate goal of opening a thousand stores, but ignores the continuous progress of the times.
Under the big waves of the new retail industry, Yonghui has long been reduced to the companion of the times, and whether Yonghui, which is struggling to catch up, can really "rebound against the trend" still needs time to verify.
(At the request of the interviewees, Liu Yun and Wang Yu are pseudonyms)