In-Depth Analysis of Pangdonglai's Secrets to High Sales per Square Meter Operations

Based on the searched materials, I will systematically analyze the operational secrets behind Pangdonglai’s high sales per square meter from multiple dimensions.

I. Core Performance Data of Pangdonglai

According to the latest data, Pangdonglai’s operational efficiency ranks among the top in the retail industry:

Metric	Pangdonglai Data	Industry Comparison
Annual Sales per Store	Approximately RMB 380 million	Industry average approximately RMB 85 million
Sales per Square Meter	Far exceeds industry average	Yonghui’s renovated stores: RMB 3,295 per square meter
2024 Revenue	Nearly RMB 17 billion, with a year-on-year growth of 58.5%	Traditional supermarkets generally saw declines
Average Monthly Employee Salary	RMB 9,886 (January-February 2025)	Store manager monthly salary: RMB 78,058
Employee Turnover Rate	Only 2.01% annually	Industry average approximately 15-20%

II. In-Depth Analysis of Operational Secrets

Extreme Service Experience: Restructuring the “People-Goods-Place” Relationship

Pangdonglai has upgraded retail from a simple transaction to a “lifestyle solution platform”:

Detailed Service Matrix:

Over 30 free services: valet parking, free Chinese medicine decoction, pet storage, wheelchair shopping carts, etc.
Free on-site meat mincing and vegetable shredding in the fresh food section
Free tobacco and alcohol packaging service at cash registers
A dedicated service desk to help customers carry heavy items

Application of the SERVQUAL Service Quality Model:

Reliability
: Establish supply chain trust anchors to ensure product quality
Empathy
: Cover the needs of special customer groups (mother-and-child rooms, barrier-free facilities)
Responsiveness
: After-sales rapid response, implement “no-questions-asked returns”

“Pangdonglai doesn’t need excessive marketing methods, because we firmly believe that as long as we provide good service, customers will naturally come uninvited.” — Yu Donglai

Employee Happiness Philosophy: Treat Employees as “Owners” Rather Than “Tools”

Pangdonglai’s unique “Maximizing Employee Happiness” philosophy:

Salary System:

Level	Monthly Salary (2025)	Features
Store Manager	RMB 78,058	Annual salary approximately RMB 940,000
Assistant Store Manager	Over RMB 35,000	Management position
Regular Employee	RMB 9,886	Far exceeds local industry level
Minimum Guarantee	Over RMB 8,000	Net income after social security deductions

Innovative Work System:

Two Days Off per Week
: Break the retail industry’s convention of “one day off per week”
36-Hour Workweek
target
40-60 days of annual paid leave
10 days of “Unhappiness Leave”: paid leave without reason
No scheduling or makeup shifts on rest days

Employee Care:

Free three meals a day
Gym, library, activity room
Professional training and development opportunities
Employee travel benefits

Results

: In 2024, the employee turnover rate was only 2.01%, far lower than the industry average, forming a virtuous cycle of “Employee Happiness → Service Quality → Customer Satisfaction → Performance Growth”.

Supply Chain Restructuring: From “Channel Profit” to “Value Co-Creation”

Pangdonglai has established a differentiated supply chain system:

Private Label Strategy:

Established a central kitchen in 2023
Produces over 100 private label products (DL Series)
Private label products account for 30% of sales, far higher than the industry average

Supply Chain Model Innovation:

Traditional Model: Factory → Distributor → Wholesaler → Retailer → Consumer
Pangdonglai Model: Factory → Pangdonglai → Consumer (direct connection)

Procurement System Features:

Strict quality control and supplier screening
Eliminate traditional channel fees such as entry fees and barcode fees
Implement “direct procurement at bare price”, reducing procurement costs by approximately 15%
Payment terms shortened to within 45 days

Product Strategy: Differentiation and Quality First

Product Structure Optimization:

Store area: 3,000-7,000 square meters
Approximately 10,000+ SKUs, selected high-quality products
70-80% of low-efficiency single products have been removed from shelves
The proportion of imported products has increased to over 20%

Pricing Strategy:

Adhere to “high quality at fair price”, do not use extremely low prices as a selling point
Create hit products with customized items
For example, the 950ml customized Yili fresh milk priced at RMB 7.9 has become a bestseller

Quality Control:

Establish a strict quality control system
Each batch of products is traceable (traceability code management)
Zero tolerance for quality issues

Spatial Experience: Creating a “6A Scenic Spot”-Level Store

Store Design Concept:

Eliminate mandatory customer flow routes, allowing customers to browse freely
Reduce the height of island shelves to 1.6 meters to enhance transparency
Widen aisles to over 3 meters to reduce crowding
Professional display design for fresh food and seafood sections

Scene Experience:

Stores are not just shopping places, but also living spaces
Extended services such as valet parking and pet storage
Create an experience of “shopping, but more than just shopping”

Results

: Customer queues have become the norm, with over 50% of customers coming from other regions, and it has been called an “unlicensed 6A scenic spot” by netizens.

Business Philosophy: “Small but Beautiful, Slow but Steady”

Regional Deep Cultivation Strategy:

Do not pursue national expansion, focus on Xuchang and Xinxiang
Only about 40 stores currently
Multi-format combination: life plazas, electronics stores, clothing and shoe stores, comprehensive supermarkets

Core Philosophy:

“Do not pursue maximum profit, pursue maximum employee happiness”
“Quality rather than scale”
“Transform from conventional operation to quality operation”

Long-Termism:

Plan to control sales within RMB 20 billion in 2025
Set aside RMB 1 billion in profits for store construction and social contributions
Investment in the “Dream City” project is expected to be RMB 5-7 billion

III. Business Logic of the Pangdonglai Model

                    ┌─────────────────┐
                    │ High Employee   │
                    │ Satisfaction    │
                    │ (2% turnover)   │
                    └────────┬────────┘
                             │
              ┌──────────────┼──────────────┐
              ▼              ▼              ▼
       ┌──────────┐   ┌──────────┐   ┌──────────┐
       │ High     │   │ High      │   │ High     │
       │ Service  │   │ Product   │   │ Spatial  │
       │ Quality  │   │ Quality   │   │ Experience│
       └────┬─────┘   └────┬─────┘   └────┬─────┘
            │              │              │
            └──────────────┼──────────────┘
                           ▼
                    ┌──────────────┐
                    │ High Customer│
                    │ Loyalty      │
                    │ (Repurchase +│
                    │ Referrals)   │
                    └──────┬───────┘
                           │
                           ▼
                    ┌──────────────┐
                    │ High Sales per│
                    │ Square Meter  │
                    │ (3-4x industry│
                    │ average)      │
                    └──────────────┘

IV. Industry Impact and Replicability

Spillover Effect of the Pangdonglai Model:

Yonghui Renovation
: Since June 2024, 178 stores have been renovated, with passenger flow increasing by over 80%, and the gross profit margin of stabilized renovated stores increased to 22.1%
Bubugao
: Assisted in renovating 13 stores in 2024, turning losses into profits in the same year
Industry Demonstration
: Jiajiale, China Resources Vanguard, and others have successively learned and followed suit

Replicability Analysis:

Element	Replicability Difficulty	Key Points
Service Concept	Medium	Requires a complete transformation of corporate culture
Employee Salaries	High	Needs to bear short-term cost pressure
Supply Chain	Medium	Requires long-term supplier relationship building
Product Strategy	Medium	Needs to establish product selection and quality control capabilities
Spatial Design	Low	Can be directly referenced and learned

“Pangdonglai is not a ‘textbook’; simply ‘copying homework’ cannot truly ‘turn losses into profits’. But the reason for Pangdonglai’s success is clear: people’s consumer demand for a better life has never been absent.”

V. Conclusion

The core code behind Pangdonglai’s high sales per square meter is:

Based on employee happiness, with extreme service as the bridge, and high-quality products as the carrier, create an irreplaceable consumption experience

. This model has broken the vicious cycle of traditional retail’s “cost compression - price reduction - small profits but quick turnover”, and created a new path of “value enhancement - experience premium - quality premium”.

Under the dual pressures of e-commerce impact and consumption upgrading, Pangdonglai has proved another possibility for physical retail — when the consumer market shifts from rigid demand to improved demand, the demand for “emotional value for money” (xinjiabi) of emotional and experiential value is often no less than or even higher than the demand for “cost performance” of products.

References:

[1] Xinhua News Network - Qianbi Tower | How did Pangdonglai, a retailer, become a “6A scenic spot”? (http://www.news.cn/fortune/20250302/be74292d8264467d97737c5f514777da/c.html)
[2] The Paper - Cover Figure | Yu Donglai: A Visionary and Practitioner in the Retail Industry (https://www.thepaper.cn/newsDetail_forward_30258293)
[3] Securities Times - Pangdonglai: Average monthly employee salary was RMB 9,886 in the first two months of this year, store manager salary RMB 78,058! (https://www.stcn.com/article/detail/1624478.html)
[4] Sina Finance - Pangdonglai Releases Detailed Salary Information for All Employee Levels (https://finance.sina.com.cn/wm/2025-04-01/doc-inerrhrw3206014.shtml)
[5] Dongguan Securities - In-Depth Report on Yonghui Supermarket (601933) (July 2025)
[6] Guojin Securities - In-Depth Research Report on the Retail Industry (June 2025)

In-Depth Analysis of Pangdonglai's Secrets to High Sales per Square Meter Operations

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