Research on the Transformation of the Traditional Supermarket Industry: A Case Analysis of Yonghui Supermarket's Losses

Based on the above in-depth analysis, I will provide you with a comprehensive research report on the traditional supermarket industry’s response to e-commerce impact and consumption downgrade.

According to the performance forecast released by Yonghui Supermarket (601933.SS) on January 12, 2026, the company expects a net loss attributable to shareholders of approximately RMB 2.14 billion in 2025, an expansion of approximately 45.6% compared to the net loss of RMB 1.47 billion in the same period of 2024 [0][1]. This means that Yonghui Supermarket will record annual losses for the fifth consecutive year, with cumulative losses exceeding RMB 10.2 billion since 2021 [1].

Looking at the latest financial data, as of the end of the third quarter of 2025, Yonghui Supermarket achieved operating revenue of RMB 42.434 billion, a year-on-year decrease of 22.21%; the net loss attributable to shareholders was approximately RMB 710 million, a year-on-year expansion of more than 8 times [0][2]. The company’s asset-liability ratio is as high as 88.96%, facing severe debt repayment pressure and capital challenges [2].

Indicator	Value	Industry Comparison
2025 Expected Net Loss	RMB 2.14 billion	Far Exceeds Industry Average
Year-on-Year Revenue Decline	22.21%	Significantly Higher Than Peers
Asset-Liability Ratio	88.96%	At a Dangerous Level
ROE (Return on Equity)	-49.76%	Severe Losses
Current Ratio	0.63	Weak Short-Term Solvency

Yonghui Supermarket attributes its performance decline to two factors [1][2]:

1. External Environmental Pressure
   : The retail industry is in a fierce competition, and consumers’ requirements for shopping experience and product quality are increasing, which has impacted both customer flow and average transaction value.
2. Proactive Internal Adjustments
   : The company closed some stores during the transformation and renovation process, leading to a decline in same-store sales and the number of stores. Since 2024, the company has closed more than 300 stores, and the number of store closures reached 331 in the first three quarters of 2025 [2].

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According to the 2024 China Top 100 Supermarkets List released by the China Chain Store & Franchise Association, the top 10 enterprises account for 66.6% of total sales, a further increase compared to previous years [1]. The industry shows an obvious trend of head concentration, and the living space for small and medium-sized supermarkets has been further compressed.

The market share of traditional hypermarkets dropped from 35% in 2023 to 28% in 2025, while the share of warehouse club stores increased from 12% to 18%, and the share of hard discount stores grew from 10% to 15% [1][3]. This structural change reflects a fundamental shift in consumer preferences.

Competitive Format	Representative Enterprises	Core Advantages	Development Trend
E-commerce Platforms	Taobao, JD.com, Pinduoduo	Price Advantage, Convenience	Accounts for 42% of Channel Share
Community Group Buying	Duoduo Maicai, Meituan Youxuan	Low Price, Social Fission	Accounts for 25% of Channel Share
Hard Discount Supermarkets	ALDI, Haoxianglai	Ultimate Cost-Effectiveness	ALDI will exceed 100 stores in 2026
Warehouse Club Stores	Sam’s Club, Hema	Quality, Experience	Accelerating Expansion

1. Normalized Price Wars
   : Platforms such as Pinduoduo and Douyin seize market share with ultra-low prices, and traditional supermarkets lack price competitiveness.
2. Rise of Instant Retail
   : Platforms such as Meituan Flash Purchase and Ele.me achieve delivery within 30-60 minutes, eroding instant consumption scenarios.
3. Replacement of Consumption Scenarios
   : Fresh food e-commerce and community group buying have diverted a large number of daily shopping demands.
4. Rising Customer Acquisition Costs
   : Online customer acquisition costs continue to climb, while offline customer flow continues to decline.

PwC’s 2025 Global Consumer Insights Survey: China Report shows that China’s consumer market presents a “two worlds of ice and fire” characteristic [3]:

• The FMCG industry shows the characteristic of “volume growth and price decline”, with sales volume steadily increasing but average selling price continuously declining
• Consumers are increasingly budget-conscious in daily consumption, and price sensitivity continues to rise
• 32% of mainland respondents are worried about living costs, and 45% of households have an annual income of less than US$10,000

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Since 2024, traditional supermarkets represented by Yonghui Supermarket have been learning the “Pangdonglai model” to seek breakthroughs [1][2]:

• As of the beginning of 2026, the number of transformed and renovated stores has exceeded 300
• Inefficient SKUs have been removed from transformed stores, with a product replacement rate of 50%-70%
• Strengthened private labels and direct sourcing, and launched at least 60 new private label products
• The proportion of fresh food has increased from about 5% to 20%

• The monthly sales per square meter of 47 stores that have been transformed for 6 months reached RMB 3,295/sq.m, which is higher than the benchmark of RMB 2,800/sq.m
• The gross profit margin of transformed stores in steady operation reached 21.4%
• Customer flow in some stores increased by more than 80%

• Profits are still under significant pressure in the short term
• Private label sales contribute only 5%-15%, lagging behind the industry’s better level of 20-25%
• Supply chain capabilities and private label construction test long-term profitability

Strategy	Specific Measures	Expected Effect
Private Label Development	Target to increase the proportion to 20-25%	Increase gross profit by 15-20 percentage points
Product Structure Optimization	Eliminate 50%-70% of inefficient SKUs	Improve turnover efficiency
Fresh Food Upgrade	Increase the proportion of fresh food to 20%	Enhance customer flow attraction
Quality Upgrade	Introduce high-quality suppliers	Increase average transaction value

1. Instant Retail Layout
   : Cooperate with platforms such as Meituan and Ele.me to achieve delivery within 30-60 minutes
2. Member Digitization
   : Establish a precise marketing system to increase repurchase rate
3. OMO Integration
   : Integrate online and offline channels to create an omnichannel shopping experience
4. Community Business
   : Stay close to consumers and develop the community fresh food store model

• Supply Chain Optimization
  : Reduce intermediate links and improve procurement efficiency
• Store Network Adjustment
  : Close loss-making stores and optimize store portfolio
• Cost Control
  : Streamline personnel structure and improve labor efficiency
• Standardized Operations
  : Learn from the extreme cost control of hard discount stores such as ALDI

German hard discount retail giant ALDI provides another transformation idea [3]:

• Private labels account for as high as 90% of products
• Streamline SKUs and select popular products
• Extreme cost control
• Standardized operation system
• Opened 30 new stores in 2025, and is expected to exceed 100 stores in the first quarter of 2026

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Transformation Strategy	Effectiveness Score	Implementation Difficulty	Short-Term Effect	Long-Term Effect
Store Closure to Stop Losses	High (80)	Medium	Stop Losses	Scale Reduction
Transformation with Pangdonglai Model	Medium-High (75)	High	Increased Customer Flow	To Be Verified
Digital Transformation	Medium (70)	High	Efficiency Improvement	Capacity Building
Instant Retail Layout	Medium (65)	Medium	Limited Increment	Must-Win Territory
Private Label Development	Medium (60)	High	Gross Profit Improvement	Core Barrier
Supply Chain Optimization	Medium (55)	High	Cost Reduction	Long-Term Competitiveness

1. Critical Turning Point for Yonghui Supermarket
   • The company expects the transformation and renovation to be completed in 2026
   • The number of operating stores will basically remain at about 450
   • Shift from “blood transfusion” to “blood production”, focusing on profitability
   • According to the company’s calculation, the renovation project can achieve profitability after T+3 years, with an estimated average annual net profit of RMB 565 million

2. Accelerated Industry Integration
   • Further increase in head concentration
   • Accelerated clearance of small and medium-sized supermarkets
   • Surviving enterprises will gain larger market share

3. Reconstruction of Profit Model
   • Shift from scale expansion to single-store profitability
   • Shift from product price difference to service value-added
   • Shift from traffic dependence to member value

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1. Transformation Progress Falls Short of Expectations
   : It remains doubtful whether the Pangdonglai model can be replicated nationwide
2. Capital Chain Pressure
   : With an asset-liability ratio as high as 88.96%, financing capacity affects the sustainability of transformation
3. Intensified Industry Competition
   : E-commerce and hard discount stores continue to seize market share
4. Uncertainty in Consumption Environment
   : Downward pressure on the macro economy may further compress consumption

1. Same-store sales growth of transformed and renovated stores
2. Progress in increasing the proportion of private label sales
3. Changes in asset-liability ratio and financing progress
4. Whether the loss reduction target can be achieved in 2026

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The figure above shows:

• Annual net loss trend of Yonghui Supermarket attributable to shareholders (2021-2025)
• Quarterly revenue change trend
• Comparison of store closures in the traditional supermarket industry
• Evaluation of the effectiveness of transformation strategies

The figure above shows:

• Changes in market share of supermarket formats (2023 vs 2025)
• Consumer preferences for shopping channel selection
• Comparison of competitiveness between traditional supermarkets and new formats
• Key success factors for transformation

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[0] Jinling API Market Data - Real-time Quotes and Financial Data of Yonghui Supermarket (601933.SS)
[1] China Economic Net - “Yonghui Supermarket Expects Loss in 2025, Cumulative Losses Exceed RMB 10 Billion in 5 Years” (http://finance.ce.cn/stock/gsgdbd/202601/t20260114_2701093.shtml)
[2] Stockstar - “Borrowing Money, Transforming… Why is Yonghui Supermarket, Which is Undergoing Continuous Transformation, Still Trapped in Losses?” (https://finance.sina.cn/stock/ssgs/2026-01-14/detail-inhhhhqv4110092.d.html)
[3] Retail Circle - “Top 10 Leadership Changes in Retail in 2025: Sam’s Club, ALDI, P&G, Nestlé” (https://www.headscm.com/Fingertip/detail/id/52728.html)
[4] Winshang - “One Year After the First Batch of ‘Pangdonglai-Style Transformed Stores’ in the Country, How Much of the ‘Pangdonglai’ Essence Remains?” (https://m.winshang.com/videoApplet/videolist.aspx?lm=31)
[5] Zhihu Column - “Sam’s Club, Hema, Genki Forest Place Collective Bets! PwC Report Deciphers: 5 Types of Chinese Consumers Are Reshaping the 49 Trillion RMB Market” (https://zhuanlan.zhihu.com/p/1987850599253972355)

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The continuous losses of Yonghui Supermarket are a typical microcosm of the traditional supermarket industry under the dual pressures of e-commerce impact and consumption downgrade. Facing challenges, enterprises are seeking breakthroughs through multiple paths such as learning the Pangdonglai model, developing private labels, and promoting digital transformation. 2026 will be a crucial year to test the effectiveness of transformation. Enterprises that successfully transform are expected to gain larger market share in industry integration, while those that fail may be eliminated by the market. The competition in the traditional supermarket industry has shifted from scale expansion to a new stage of single-store profitability and differentiated competition.