Shocked! A well-known supermarket chain suddenly closed down! At one time, there were more than 200 stores

"I used to buy daily necessities here, but why did I suddenly close the store?" Ms. Zhang, a Shanghai resident, said, pointing to Biyide, a discount supermarket near her home.

Just a few days ago, the discount supermarket chain that focuses on low prices suddenly closed down, and according to the announcement it issued, Biyide supermarket will be suspended from December 22, 2023.

The first financial reporter came to some Biyide stores in Shanghai and saw that these stores have been closed, but there are still promotional advertisements for December on the door, and many nearby residents are looking outside the store, and there are still some goods in the store through the glass windows of the store.

According to public information, Biyide was founded in 2017 and is a discount store brand founded by German Philipp Spangenberg in China. During the period of rapid development, Biyide has opened more than 200 stores in Shanghai and Jiangsu. Most of the sites are located in the community, focusing on cheapness and convenience. In April 2021, Biyide launched an online platform to provide home-to-home delivery services, with two dedicated logistics and distribution centers in the north and south of Shanghai, each serving around 140 stores. In September 2021, Biyide received an exclusive investment from Argan Capital with a financing scale of hundreds of millions of yuan. Argan Capital is an independent private equity fund focused on acquiring European mid-market companies.

According to the reporter's on-site observation and interviews with all parties, most of the store area of Biyide is 200~300 square meters, and the number of SKUs in a single store is 500~600, and fresh vegetables and other goods are specially added to attract consumers.

In fact, Biyide basically copied the model of ALDI, the founder originally came from ALDI, ALDI is a discount store in Germany, focusing on cost-effective goods, and a small store based on the concept of parity. At the beginning, Biyide did a good job, once there were more than 200 stores, and Biyide were all directly operated stores, so the investment was still relatively large. A person familiar with the matter told the first financial reporter.

According to the official data of Biyide, the compound annual growth rate of its sales in 2017~2021 is 120%, and its own brands account for about 40% of total sales. Biyide has said that it hopes to have 800 stores by 2025.

According to people familiar with the matter, there are currently 158 stores in Shanghai and Kunshan, and the announcement said that it would be closed from December 22, but it was actually closed from December 23.

"Since November, the rent of some stores has been unable to be paid, and some of the payments on the part of the suppliers have also started to be in arrears. There is no specific solution in sight, and Biyide is temporarily entrusting the follow-up matters to a law firm, and the relevant operators and employees are still waiting for the law firm to give a solution. Insiders told the first financial reporter.

So, why did a discount supermarket that has been in operation for 7 years suddenly announce its closure?

Some people close to the said that the investment model is heavier than Yide, basically directly operated stores, although it is a small discount store, the area is not large, but in order to attract customer flow, most of the stores are opened along the street, the rent of such stores is very expensive, and the direct store means wholly-owned investment, which is a high-cost model for low-profit affordable retailers.

"In addition, there are too few product categories in Biyide, with only 500~600 SKUs in a single store, which makes customers have very few choices. In terms of operation and management, discount stores themselves are facing challenges such as supply chain and price control, and the epidemic has also had a certain impact on the retail industry. Insiders told the first financial reporter.

Of course, the market is too competitive and one of the problems is too fierce. Some insiders revealed that the market of discount stores was relatively blank 7 years ago, but now the low-price competition is becoming more and more fierce, such as the expansion of Hema Outlets, which has brought a great impact to Biyide, which makes Biyide "worse".

It is understood that in recent years, due to rising costs and intensified competition, membership stores, supermarkets and hypermarkets have similar challenges, before Carrefour has fallen into the store closure turmoil, and the competition in the field of membership stores can be described as "a red sea", this year there was also a "moving mountain price" and other low-price competition, which makes retailers face greater challenges.

Duty Editor: Dragon King