Discount stores and exclusive supermarket chains thrive

Discount retailers and membership-only supermarket chains have outperformed the general retail industry, according to the latest industry survey by the China Chain Store & Franchise Association.

Membership-only shops such as Sam's Club, Costco and Metro have been blossoming in recent years, with an estimated number of 189 stores at the end of this year, a big jump from only 33 shops in 2020.

But new supermarket openings slowed down in the first half of this year, with 45 new stores in total.

According to the survey of 100 supermarket chains that cover over 28,000 outlets in the country, nearly 70 percent of supermarkets recorded a drop in foot traffic, but over 95 percent of them achieved higher online sales in the first 10 months of this year.

The combined number of outlets from the top 100 supermarkets increased by 2.9 percent to 28,502 by the end of 2021, with fresh food supermarkets and discount stores making up over 98 percent of these new openings.

Same-store sales at leading supermarkets also fell in 2021, and community stores suffered the most with an 8 percent drop while hypermarket chains were less affected with a 3.4percent dip.

Domestically listed retailers recorded a generally profitable first half this year, improving from the past two years' disturbance due to the pandemic. By the end of October this year, nearly half of supermarket chains reported profit increases from the same period a year earlier.

Retailers have also shifted their operation models with niche segments such as discount models, delivery, as well as integrated sales and service channels.