In China, the food and retail industry is in chaos, with the entire economy in a slump. Recently, a video about the revenue of a small takeaway shop run by a couple has gone viral on the mainland Chinese internet. The video revealed the meager profits in the current food industry, sparking widespread social concern.
According to the data shared by the couple, their food shop achieved a monthly revenue of 182,675 yuan in September. However, after deducting various fees, subsidies, discounts, and subtracting labor costs and other expenses, the actual operating income was only 10,086 yuan, without even accounting for the couple’s wages and social security contributions.
In September, the shop’s monthly revenue was said to be 182,675 yuan, but after deducting various fees automatically by the system, the shop was left with 156,735 yuan. After deducting their promotional expenses, they were left with 125,903 yuan, and further subtracting the delivery fee subsidies for customers, it reduced to 118,195 yuan. Another cost to deduct was the discount promotions, resulting in an actual operating income of 111,743 yuan.
Next, deducting the cost of ingredients by 45,954 yuan, left them with 54,106 yuan. After subtracting the salaries of the two employees, 24,000 yuan in total, they were left with 30,106 yuan.
They also had to pay rent, water, electricity, and gas bills, leaving them with 23,106 yuan. After deducting packaging and promotional costs, they were left with only 10,086 yuan.
The video also caught the attention of popular internet influencer “Master Mei.”
He pointed out that although the couple ended up with an income of 10,086 yuan, this was not their net profit as their wages were not deducted. Additionally, there were other expenses not accounted for such as store renovation costs, equipment fees, hygiene permits, business licenses, and monthly taxes, which would further reduce their profit.
The food business in China has been struggling, with many people opting for lower-cost options like takeout, but even takeaway shops are not making much profit.
According to “Master Mei,” many people who consult on starting small businesses end up failing miserably. The economic downturn in the food industry reflects the overall sluggish state of the economy, making it challenging for most ventures to succeed.
In the past, physical stores were an integral part of daily life in China, but with the rapid growth of the e-commerce industry, many physical stores are feeling immense pressure. Reduced foot traffic and increasing difficulties have led to numerous malls and supermarkets closing down.
Carrefour has closed hundreds of stores, Yonghui Superstores incurred losses of up to 2.7 billion yuan, and even RT-Mart has felt tremendous pressure from e-commerce.
As the Chinese economy has been on a downward trend in recent years, a large number of physical stores have closed down in droves.
Blogger “Observing the Rising Tide Coldly” mentioned how it has become common to see signs of “prosperous shop for transfer” while out shopping, indicating a trend where various businesses are struggling or closing down. The increasing competition, rising rental costs, escalating labor expenses, and intense price competition have posed significant challenges for traditional businesses.
While physical stores face hardships, the e-commerce industry is also facing its own set of difficulties.
Blogger “Old Yang” emphasized that physical stores and e-commerce are not in a simple opposition, as e-commerce has its share of challenges. Though e-commerce prices are generally lower than physical stores, high return rates have become a burden for merchants, especially in categories like clothing, shoes, and food where customers often resort to “no reason returns.”
Amid the backdrop of challenging economic conditions, consumers are seeking value for money, causing businesses to bear the risks of high shipping and return costs, making e-commerce operations equally challenging.