Alcohol retailers face razor-thin margins despite high sales volume, forcing unprofitable business models

Chinese liquor store chains are experiencing a critical profitability crisis where 76% have gross margins below 15%, making it impossible to sustain operations on alcohol sales alone. Retailers are forced to diversify into unrelated categories like tea and sea cucumber just to achieve acceptable profit levels, indicating the core alcohol business is fundamentally broken. Current wholesale pricing structures and competitive dynamics have made premium liquor sales a loss-leader rather than a profit driver.