Core Viewpoint - The convenience store industry is facing significant challenges, including increased competition and declining sales in traditional categories, prompting operators to adapt their business models and product offerings to meet changing consumer demands [2][4][5]. Group 1: Store Adjustments - Operators like Yuan Peng have implemented store renovations and product adjustments, introducing hot food equipment and school-related items, resulting in a 30% increase in customer traffic and a 50% rise in gross margin [3][4]. - The adjustments are driven by the need to align product offerings with local consumer preferences, particularly in school areas where demand for specific items is high [3][4]. - Effective supply chain management is crucial for the success of these adjustments, as new product categories can lead to inventory management challenges [3][4]. Group 2: Industry Challenges - The convenience store sector is experiencing pressure from the expansion of snack and discount stores, which offer lower prices and a wider variety of products, negatively impacting convenience store sales [4][5]. - Sales of high-end tobacco and alcohol products have declined, leading to inventory buildup and reduced revenue for convenience stores [4][5]. - Despite a compound annual growth rate of 17.4% in sales over the past nine years, profitability remains a significant issue for the industry, as exemplified by the struggles of foreign brands like 7-Eleven and FamilyMart [6][7][8]. Group 3: Shift to Food Services - In response to revenue pressures, convenience stores are increasingly focusing on fresh food offerings, which have higher profit margins, to offset losses in other product categories [10][11]. - The introduction of dining areas and fresh food stations aims to attract more customers, but this shift poses operational challenges, including space constraints and the need for specialized staff [11][12]. - The success of fresh food offerings in lower-tier markets is uncertain, as local preferences may not align with the products typically offered by foreign brands [12][13]. Group 4: Product Differentiation - Global trends show that convenience stores, such as those in Japan, are diversifying their product ranges to include non-traditional items like clothing and small appliances, moving away from a food-centric model [16][17]. - This diversification strategy aims to enhance store efficiency and sales without opening new locations, but it also increases operational complexity and inventory management challenges [17][18]. - The balance between expanding product categories and maintaining core competencies in convenience and food offerings is critical for long-term success [19].