China Business Daily (Reporter Ran Longnan)Yonghui Supermarket, which has undergone executive changes and business adjustments, released the 2021 semi-annual report on August 27. Data shows that in the first half of the year, Yonghui’s operating income was 46.827 billion yuan, a year-on-year decrease of 7.3%, and non-net profit was negative 925 million yuan, a year-on-year decrease of 166.35%. For the first time, Yonghui Supermarket reported a half-year loss. It is worth noting that although the number of closed stores in the second quarter exceeded the number of new stores in the first half of the year, its online performance was more impressive.
First half-year loss
Compared with the same period in 2020, the market competition faced by Yonghui Supermarket in the first half of 2021 is obviously more intense.
The financial report shows that in the first half of the year, Yonghui’s operating income was 46.827 billion yuan, a 7.3% drop from the high base under the influence of the new crown pneumonia epidemic in the same period in 2020, and the net profit attributable to the parent turned from profit to loss year-on-year, deducting non-net profit to negative 9.25 100 million yuan, a year-on-year decrease of 166.35%. This is the first half-year loss of Yonghui Supermarket.
Although there was a first loss in half a year, in the financial report, Yonghui Supermarket stated that under the fierce market competition, Yonghui’s operating level is showing a quarterly improvement and a steady recovery. In the second quarter of 2021, Yonghui’s revenue decline has slowed down. In July of this year, Yonghui’s revenue growth rate has rebounded to 9.4% year-on-year. Especially in the Fuzhou area, Yonghui’s July revenue increased by 16.8% year-on-year, and its average daily passenger flow increased by 28.4% year-on-year. It is on the track of steady growth again.
However, the financial report also showed that Yonghui Supermarket’s comprehensive gross profit margin was 18.82%, a year-on-year decrease of 3.55%, of which the fresh and processed gross profit margin was 10.27%, a year-on-year decrease of 4.69%, and the food supplies gross profit margin was 15.68%, a year-on-year decrease of 3.54%. Regarding the reasons for the decline in gross profit margin, Yonghui said that taking the initiative to reduce inventories and adjusting the structure is the main reason, the competition of community group buying, and the recurrence of the new crown pneumonia epidemic are external reasons.
Continuous adjustment of management and business
In the first half of 2021, Yonghui Supermarket can be said to be constantly adjusting. Both the management and the business have very frequent adjustments and changes.
In terms of personnel changes, just after the resignation of the Secretary of the Board in July, Yonghui Supermarket dropped a blockbuster “bomb” in August-the CEO was replaced. In addition, the August 28 announcement revealed that its vice president Jin Bin will resign on August 31.
In terms of business, the adjustment of stores may most directly show the decision-making direction of Yonghui Supermarket. In the “Announcement on Resolutions of the 31st Meeting of the Fourth Board of Directors of Yonghui Supermarket Co., Ltd.” issued on August 28, it was mentioned that the proposal on “closing 13 Bravo stores and 55 small stores” was passed. The proposal shows that 68 stores (including 13 Bravo stores, 9 mini stores, 10 super species stores and 36 Yonghui life stores) will be closed in the second quarter of 2021, of which 13 Bravo stores are due to poor sales performance, The store’s lease contract expired and the property owner’s breach of contract was closed. Nine mini stores, 10 super-species stores and 36 Yonghui life stores were closed due to losses and adjustments to the company’s operations. This time the store closure is expected to lose RMB 80,481,900.
While closing stores to stop losses, Yonghui is also opening stores, but the speed of opening stores has obviously slowed down a lot. The financial report shows that in the first half of 2021, Yonghui Supermarket opened 28 new supermarket stores, a total of 1,026 stores (including 20 renovated warehouse stores), and 202 reserve stores.
It can be seen from the opening and closing of the store that the “super species” that used to be a new retail test format has basically been abandoned by Yonghui Supermarket. Since the beginning of this year, there has been news that the super species has closed stores in many places across the country. But in contrast, Yonghui Supermarket is vigorously developing a new format of warehouse stores.
Unlike most of its peers who reopened stores, Yonghui Supermarket’s warehouse stores mainly renovate existing stores and increase the inventory. In May 2021, Yonghui Supermarket opened the country’s first warehouse store in Fuzhou that is positioned for people’s livelihood. As of the end of June 2021, Yonghui has reopened 20 warehouse stores nationwide. During the reporting period, the sales of warehouse stores increased by 139% year-on-year, and the average daily passenger flow of a single store increased by 136% year-on-year.
How far is “Technology Yonghui”
It is worth noting that how to use technology to improve quality and efficiency has become the main development goal of Yonghui Supermarket.
The replacement of the CEO shows its courage to transform “Technology Yonghui”. On August 5, Yonghui Supermarket announced that it plans to hire Li Songfeng as the company’s chief executive officer (CEO) to better take the lead in establishing an organizational system for technology-driven operations and lead the company to technology Yonghui. It is worth noting that Li Songfeng’s previous position was the Chief Technology Officer (CTO) of Yonghui Supermarket. Such personnel changes are really rare in the industry.
The announcement shows that Li Songfeng has 20 years of technology and management experience, and he is good at building digital capabilities suitable for enterprise development in business reforms. Digitization is an important track where Yonghui Supermarket and other industry peers are working hard. On this track, Yonghui Supermarket chose to invest heavily. In the first half of 2021, Yonghui Technology invested nearly 300 million yuan. As of the end of June 2021, Yonghui Technology had over 1,000 employees.
Although Li Songfeng has just taken office, Yonghui Supermarket’s online business has already performed well. In the first half of 2021, Yonghui’s online sales reached 6.81 billion yuan, an increase of 49.3% year-on-year, and its proportion of main operating revenue increased to 14.1%. As of the end of June 2021, the “Yonghui Life” App has covered nearly a thousand stores and the number of members has reached 72.2 million.
According to Yonghui Supermarket, since the new CEO took office, Yonghui is using Fuzhou City, Fujian Province as a pilot to promote the implementation of the “three 30%”, that is, through data governance combined with business governance, to provide users with a more streamlined, more matched, and More affordable SKUs, better services, introduce and accumulate traffic, increase conversion and repurchase, and achieve a 30% increase in ping efficiency; through the integration of stores and warehouses, refined and intelligent procurement, transaction, and contract fulfillment operations , To achieve a 30% increase in human efficiency; to achieve end-to-end visualization, relying on big data and the Internet of Things, continue to build an intelligent supply chain, optimize category structure, reduce inventory shortage rates, reduce inventory turnover days, and achieve a 30% increase in product efficiency.
Thanks to the empowerment of the Yonghui Zhongtai system of science and technology, the rapid test of “sales, warehouse and home warehouse” of Yonghui Warehouse Store has also been carried out smoothly. The financial report shows that as of the end of June, the average daily passenger flow of the 20 warehouse stores opened by Yonghui in the first half of the year increased by 136% year-on-year, and the customer satisfaction of the store has increased significantly.
Yonghui said that in the next ten years, the company will comprehensively promote the implementation of the “Science and Technology Yonghui, Digital Empowerment” strategy. In the second half of this year, the company will continue to promote the strategic transformation of omni-channel business, focusing on the digitalization of the supply chain and the digital development of stores. At the same time, Yonghui will continue to focus on the three elements of product quality, customer service, and business efficiency, increase investment in technology, and strive to achieve the three major improvements of “flood efficiency, human efficiency, and product efficiency”, and become a more consumer-loved technology retail company. .Return to Sohu to see more
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