One, the impact of the epidemic
From last year, China, although there is no large-scale epidemic outbreaks similar to that of 2020, but the epidemic is still sporadic outbreaks in many parts of the country. And once the epidemic outbreak, everywhere will take urgent epidemic prevention and control measures. Among the many epidemic prevention and control measures, offline brick-and-mortar store closures are basically the most common. And once the store is closed, the loss for the physical store is very heavy.
In addition to paying high rents, brick-and-mortar stores also need to pay staff wages and so on. And for fresh food as the representative of the industry, as vegetables and fruits and other products require fast circulation, if once the store is closed for a relatively long time, and there is no cold storage, then it means that these brick-and-mortar stores must also bear the cost of loss of goods. In the case of a variety of costs together with the expenditure, physical stores and rely on what to achieve profitability?
The catering industry, for example, because the main part of the catering industry in China are small and medium-sized enterprises, small and medium-sized enterprises due to financial, human and material resources and other aspects of the limitations of the chain operation and market concentration and other aspects of the large enterprises there is a gap. And when an industry if the proportion of small and medium-sized enterprises is too high, then often the concentration of the market will be low, the industry scale effect is not significant.
In today's increasingly competitive restaurant market, SMEs reveal a series of problems, such as high customer mobility, lack of stickiness, poor use of online platforms, and cash flow constraints. The results of the China Catering Annual Report show that the market share of the top 100 catering companies is only 7%, and the main component of the catering market is still SMEs, thus there is still room for improvement in terms of standardization as well as market concentration.
As the epidemic continues, the advantages of large chain companies have been highlighted at this time, through their good brand image, as well as large scale, sufficient funds and other advantages in the crisis management demonstrated a huge self-help capacity and resilience. In contrast, the self-help ability of small catering enterprises is slightly insufficient.
When the epidemic first occurred, most of the small catering enterprises can only be forced to accept the blow brought by the epidemic, but some brand catering enterprises can be based on the development of the epidemic, take the initiative to deal with, constantly update and optimize the business model, and give full play to their own resources to provide anti-epidemic help, on the one hand, minimize losses, on the other hand, to establish a good brand image, and improve social influence.
While the small and medium-sized catering industry in the financing ability, large-scale chain enterprises in obtaining bank loans and social support than compared to small enterprises easier, in the epidemic continued to develop stage, some of the capital flow tensions and even broken chain of small catering enterprises appeared to close down the phenomenon, while some large-scale chain enterprises have taken advantage of the opportunity to finance the expansion of the chain. Too decentralized form of industrial capital makes the catering industry, which is dominated by small-scale enterprises, significantly less able to withstand risks.
Two, the epidemic led to a decline in people's income
In accordance with the relevant theories of economics, factors affecting people's consumption in addition to people's current income, the expected future income also has a great impact. For example, in the first 2 years before the outbreak, when you see a several hundred dollar dress in the mall, you will buy it without thinking, even if you use your credit card to pay for it.
Because this is the time when everyone is optimistic about their expected income, but as the epidemic continues and the cost of raw materials has continued to rise since last year, corporate profits have been severely compressed. In this case, many small and medium-sized enterprises are either caught in the closure, or through layoffs to achieve self-help. Even last year, the Internet companies, once seen as a high-paying industry, have been caught in a wave of layoffs.
At this time, the public is generally pessimistic about their expected future income, which has led to people not daring to spend freely even if they have money in hand. Instead, the money will be deposited in the bank to resist the uncertainty of the future of the family, and when the people do not dare to consume, which also makes our consumer market into the trough. Dare I ask how people can make money doing business under these circumstances?
Three, the impact of the e-commerce industry
In fact, the impact of e-commerce on the physical industry did not start last year. Its impact on the entity has a long time, especially in the outbreak of the epidemic in these 2 years, the rapid rise of live e-commerce, but also the survival of many brick-and-mortar stores is worrying. The impact of e-commerce on the entity is multi-faceted, for example, the impact of price, the impact of transaction time and space, the impact of cost and so on.
For example, the Spring Festival is approaching, families began to buy new year's goods. The same kind of New Year's goods in your area sells for 200 yuan, while in Jinduoduo on the selling price of 120 yuan. At this time of the year, many people choose to go to Poundland to buy. This also means a serious loss of customers for brick-and-mortar stores. But this kind of loss is not perceived by the owner of the physical store. But compared with the e-commerce channel, brick-and-mortar stores are having a hard time getting prices down.
The reason for this is that in the cost of the physical store, the cost of rent and personnel costs in the physical store accounted for a high proportion. Even a lot of entity owners are jokingly called their own is to work for the landlord, in the case of relatively high costs, entity owners can only increase the price of goods to achieve profitability. Otherwise, it is a loss for the physical stores. But this also led to the physical store business is more and more difficult to do, and this situation in the short term there is no good way to solve.
Summary:
From the above analysis, although China has a huge population. But the consumption power brought by the huge population is limited, especially in these 2 years under the impact of the epidemic, our people are generally pessimistic about the future expected income, resulting in a serious downgrading of the consumer market. Obviously, this situation will not be well improved in a short time.