Declining Store-Level Profits of Mingming Mangang Expose Six Plaguing Challenges in the Snack Industry

Based on the latest data I have collected, as China’s largest casual food and beverage chain retailer, the decline in Mingming Mangang’s monthly store-level profits indeed reveals the deep-seated challenges facing the current snack industry. The following is a systematic analysis:

According to public financial data, Mingming Mangang’s average monthly store-level profit dropped to approximately

in H1 2025, a nearly two-fold gap compared to its main competitor Wanchen Group’s [1][2]. The situation is even more grim as follows:

• Extended Payback Period
  : From the industry’s initial average of about 12 months to an
  average of 29 months
• Declining Store-Level Revenue
  : Average monthly revenue slightly dropped from RMB 313,600 in 2024 to
  RMB 300,700
• Profitability Gap
  : The net profit margin in H1 2025 was only
  3.68%
  , lower than Wanchen Group’s
  4.28%
  [1]

Internal calculations by franchisees show that under the current cost structure of rent, labor, and goods, a store needs to achieve a monthly turnover of

to barely reach the break-even point. This break-even threshold has become insurmountable for many stores.

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The snack discount retail industry has fallen into a highly homogeneous red ocean of competition. Product portfolios, store images, and even “low-price” slogans are largely similar, making it difficult for brands to build effective moats [1][3]. Price wars have become the main competitive tactic:

• “Involution” was the most frequently mentioned term in the industry in 2024, which is essentially homogeneous competition [3]
• “Low price” was once a winning strategy in the casual snack industry, but severe product homogenization has forced brands to rely on “price wars” to attract customers [4]
• Some brand snack stores have upgraded their monthly member days to multiple times a month, with increasingly larger discounts and higher frequency [4]

Mingming Mangang and Wanchen Group have adopted extreme “store over-saturation” to saturate the market, attempting to block competitors’ penetration opportunities through the density of their physical networks [1][2]. However:

• Mingming Mangang took only about
  15 months
  to expand from 10,000 stores to over 20,000, with its store expansion pace comparable to Luckin Coffee and Mixue Ice Cream at their peaks
• Most new stores do not expand the consumer base but merely divert revenue from existing stores, leading to continuous dilution of store-level output
• Expansion is no longer a growth engine; instead, it has become an “involution” that erodes the brand’s core market share [1]

Mingming Mangang’s business model is characterized by its extreme “low-margin, high-turnover” approach [2]:

Metric	Mingming Mangang	Wanchen Group	Industry Comparison
Gross Profit Margin (H1 2025)	9.3%	11.41%	Significantly lower than competitor
Net Profit Margin (H1 2025)	3.68%	4.28%	Lower than competitor
Comprehensive Gross Profit Margin (2022-2024)	~7.6%	-	Low end of the industry

This “thin-profit” model relies on extreme control of costs and efficiency to support its large revenue scale, resulting in an

. Any increase in upstream raw material costs, inevitable escalation of industry price wars downstream, or slight decline in operational efficiency such as internal logistics and product loss can easily break through the already paper-thin profit barrier [1][2].

Mingming Mangang’s 10,000-store empire is almost entirely driven by its franchise system. This light-asset model was the core engine behind its geometric expansion in recent years [1][2]. However:

• As industry dividends fade and competition intensifies, numerous franchisees supporting its vast network are generally facing severe challenges of declining profitability
• Widespread profitability difficulties may trigger a loss of confidence among franchisees, decline in network service quality, and even localized store closures, which in turn damage brand reputation and shake the foundation of the entire business empire [1]

The previous growth path relying on “forcing inventory onto B-end distributors” has now triggered

across all categories and the entire industry [5]:

• Taking the linkage between pre-packaged and bulk food as an example, once the price system of pre-packaged food is unbalanced, sales of bulk food will be hindered simultaneously
• Distributors have low sales target completion rates, commodity gross profit margins continue to decline, and there is a talent gap among manufacturers
• A large number of distributors have chosen to transform or terminate cooperation due to continuous losses, and the sales confidence of the entire channel system urgently needs to be restored [5]

Snack discount retail channels have had a significant impact on traditional brand chain stores:

Brand	2022 Revenue	2024 Revenue	Trend
Bestore	RMB 9.44 billion	RMB 7.159 billion	Continuous decline
Laiyifen	RMB 4.382 billion	RMB 3.370 billion	Continuous decline
Three Squirrels	RMB 7.293 billion	RMB 10.622 billion	Recovered slightly but ranking declined

Traditional brands face a dilemma in transformation: Three Squirrels’ core weakness is offline channels, Laiyifen’s development bottleneck is online layout, while Bestore, despite achieving online-offline balance, is limited by supply chain shortcomings [5].

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Mingming Mangang became the first in the industry to launch private label brands in February 2025, and has now launched over 30 private label products. By increasing the proportion of private label brands, the traffic brought by the low-price brand perception can be converted into high-stickiness repurchases, and price advantages can be further converted into profit advantages, forming a positive cycle of

[3].

Mingming Mangang, Wanchen Group, and others have tested the waters in the discount supermarket track. Mingming Mangang launched its 3.0 store model, adding categories such as general merchandise, daily chemicals, stationery, trendy toys, bakery products, fresh food, and frozen products [4].

The industry consensus is shifting from “low price” to “high cost-effectiveness”. Mingming Mangang has proposed launching a “Health Index” label in collaboration with industry players and relevant institutions, marking food packaging with four grades A, B, C, and D to distinguish different health levels [4].

Qiaqia Foods has launched channel-customized SKUs to meet the needs of discount snack stores. Its high-end nut gift box co-developed with Sam’s Club achieved sales of over RMB 100 million during the Mid-Autumn Festival season; Three Squirrels tested a 1,000-square-meter full-category lifestyle store, with the first store generating over RMB 1 million in revenue in three days [5].

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The decline in Mingming Mangang’s monthly store-level profits is a typical signal that the snack discount retail industry has entered an adjustment period from a high-speed expansion period. This phenomenon reveals that the snack industry is at a critical transition node

. Industry participants need to build real competitive barriers in terms of supply chain efficiency, private label brand construction, and channel differentiation to achieve sustainable development in the fierce market competition.

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[1] Sina Finance - “Monthly Store Profit Less Than RMB 10,000: How Can Mingming Mangang Break the ‘Profit Curse’ After Listing?” (https://finance.sina.cn/stock/xg/xgzx/2026-01-07/detail-inhfnktp6268615.d.html)

[2] StockStar - “Gross Profit Margin Only 9.3%, Monthly Store Profit Less Than RMB 10,000: How Can Mingming Mangang Break the ‘Profit Curse’ After Listing?” (https://wap.stockstar.com/detail/IG2026010700021569)

[3] The Paper - “Snack Discount Retail 2025: Breaking Involution, Competing with Private Operations” (https://m.thepaper.cn/newsDetail_forward_30177526)

[4] National Business Daily - “Snack Discount Retail ‘Involution’ Escalates: Price Wars Out, Private Label Brands In” (https://www.nbd.com.cn/articles/2025-02-24/3762193.html)

[5] The Paper - “Snack Industry 2025: Breakthrough Transformation and Long-Term Growth Paths” (https://m.thepaper.cn/newsDetail_forward_32327058)