Why did the franchised convenience stores that were popular on the streets in the past go bankrupt one after another? Store manager reveals sad history
[Introduction] Walking on the street, I accidentally discovered something was missing. After careful reflection, I found that the original convenience store was closed, and it was replaced by a mother and baby store, a bakery store or a small restaurant. This kind of situation not only happens in our second-tier cities, but also in international metropolises like Beijing, Shanghai, Guangzhou and Shenzhen. So I can't help but wonder: Why are more and more convenience stores closing down one after another?
A store owner who once joined a chain of convenience stores in a certain area confided to the author: The convenience store seems to be crowded, but it doesn't actually make money. It's completely losing money and earning shoutouts. There are 3 reasons for this:
NO.1 Shop rent is high
Although the location selection of convenience stores is not as strict as that of supermarkets and electrical flagship stores, it must not be opened by renting a shop casually. Generally speaking, the rents are not cheap in places with a lot of passenger traffic, but there are almost no traffic in places with cheap rents. There has always been an irreconcilable contradiction between store rent and customer flow. However, no matter whether you choose a prime location or a remote alley, the house rent accounts for almost 30% to 40% of the profit of the store. In this way, it is completely working for the landlord.
NO.2 The joining fee is too high
Convenience stores are different from small stores in the past. They generally exist in the form of regional chains. Many stores join in by signing exclusive supply agreements with brand suppliers. Although there is no franchise fee paid on the surface, more "franchise fees" are paid secretly. For example: the purchase price of a red (red) bull is 6 cents higher than the ordinary purchase price, and the retail price is also 5 cents higher than the suggested retail price in order to ensure profit margins. In this way, not only our shop owners feel wronged, but consumers also feel wronged.
NO.3 The cost of personnel is too high
As a service industry, convenience stores are naturally inseparable from people. Since they hire people, they have to pay wages. A 20-square-meter store employs two employees, working in two shifts, and it costs seven or eight thousand in a month. Staff costs have accounted for nearly 50% of store profits, which is too high for the physical industry. Small convenience stores simply can't afford it. Compared with e-commerce, there is no high store rent, no franchise fee, and the personnel cost is extremely low, so it can survive with less cost.
Dear netizens, have you considered joining a convenience store? What's your take on this situation? Welcome to share in the comments section!