Source: Bloomberg
3 US dollars of KFC set meal containing chicken sandwiches, fries and soda.German supermarket 1.20 US dollars of beer.A new grocery chain store only sells for large discounts.
As the consumption confidence of the world's second largest economy has gradually weakened, shoppers can save it, and foreign and local brands have launched some preferential activities to attract them.On the commercial street of China, from clothing to cosmetics, it is full of discounts and special products advertisements, which reflects the amazing transformation of consumption attitude, and retailers rush to respond.
Alibaba's grocery chain Hema announced in October that the price of more than 5,000 products was reduced.It also adds more "Hema Olympics" stores and sells products that are about to the shelf life to attract customers who are sensitive to price.
German chain supermarket ALDI (ALDI) has always positioned itself as a high -end chain supermarket in China for many years, but last year it changed its strategy and claimed that it was a cheap community supermarket and launched a new slogan: "Good quality, enough enough, enough quality, enoughLow price.
Some brands and companies that have traditionally positioned themselves as high -quality choices in China's middle class, and now sacrifice low -cost strategies.Steering discount products, representing the new economic reality of China, their sales strategies have undergone tremendous changes, which also puts pressure on their prospects.Some companies that do not reduce prices are caught up by competitors with cheaper prices, such as Starbucks.
Kevin Yin and other JP Morgan Chase analysts wrote that the slowdown in demand for demand originated from economic weakness, deterioration of unemployment, and fragile consumer confidence. "No participants can be spared."They wrote in a report on Friday that these discounts will erode profit margins until the warming price war is normalized, and they have also lowered the neutral rating of Yum!
China's consumer prices are declining to the maximum within three years, causing people to doubt that China will fall into a napalized spiral.Although central banks in many parts of the world are committed to curbing inflation, the People's Bank of China vowed to use monetary policy to promote low prices.
Competition in the end
High -end companies that have not yet added products at a low price as possible are undergoing consequences.
Starbucks, which had occupied more than half of China's coffee market, lost the leader's throne last year. Ruixing Coffee later became the largest coffee chain store. The price of the latter was only 9.9 yuan ($ 1.39).This American coffee chain has revenue in China in the past two quarters of US $ 822 million and US $ 841 million, and Ruixing Coffee is 6.2 billion yuan (US $ 870 million) and 7.2 billion yuan.
Yu Jian, general manager of Greater China, Kantar Worldpanel, said that last year, as the economy faced pressure and consumer confidence was weak, consumer brands widely adopted low -cost strategies.The Kaidu Consumer Index is an analysis company that tracks 62,000 household consumption behaviors in China.I can't see the end.He said that the tightening trend will continue in 2024.
As consumers attach more attention to value, KFC, Yumsung China has increased its promotion, launched cheaper Chinese burgers, with fries and soft beverages, the price is as low as RMB 20.9 (2.90 US dollars)EssenceWith weak economic growth and weak consumer confidence, Yum! China has joined the ranks of some retailers (including Apple, Nike, Haidilao and Starbucks), and the expected decline in sales or price targets will be reduced.
JP Morgan Chase analysts wrote that almost all catering brands are adding promotional activities to meet consumers' demand for value products.The main risks include how long the price war will last, the demand is fast to pick up, and whether it will modify the 2024 target.
