Facing severe business pressures, Chinese chain supermarket Yonghui Superstores has accelerated its “amputation for survival” strategy, with a total of 325 stores closed in the first three quarters of this year. In the third quarter alone, a net total of 102 stores were closed while only 2 new stores were opened.
According to recent financial reports, Yonghui Superstores saw a 22.21% year-on-year decrease in revenue to 42.434 billion yuan in the first three quarters, with a net loss expanding to 710 million yuan. This marks a decline of more than 80% compared to the same period last year.
Yonghui attributes the decline in performance to intensified industry competition, decreased foot traffic, lower customer spending, and short-term sacrifices in profit margin during the active restructuring process.
In the recent wave of store closures, the closure announcements of two quality stores in the core business district of Shenzhen have drawn the most attention.
According to a report by the “Shenzhen Business Daily,” the closure of the stores in Luohu Sun Plaza and Nanshan Lai Da Zhong Plaza will be official on November 16. Notably, Luohu Sun Plaza has recently started a clearance sale to attract a large number of customers. The “Southern Metropolis Daily” indicates that the closure of Nanshan Lai Da Zhong Plaza is due to “poor store operation,” with no restructuring plans in place for now.
It is worth noting that Luohu Sun Plaza was certified as a “National Quality Store” in 2024. Its closure signifies that Yonghui’s store optimization is no longer limited to peripheral or inefficient areas but has extended to the core prime business districts of high-tier cities, indicating the advancement of its optimization strategy into a “deep-water area.”
Facing severe business pressures, Yonghui Superstores has adopted a dual strategy of “store closure for slimming down and store upgrade.” Financial reports show that 232 tail-end stores were closed throughout the last year.
Yonghui Superstores, known as the “top supermarket” in China, was once a unique player in the supermarket industry, with a total of 1,440 stores in 2019. However, it has been in continuous losses since 2021. According to data released by the China Chain Operations Association, in 2024, Yonghui Superstores ranked fourth in sales among supermarkets in China, following Walmart, RT-Mart, and Hema.
Starting from May 2024, Yonghui Superstores began learning from the “Pinduoduo” business model, undergoing comprehensive reforms in aspects such as product supply chain restructuring and employee welfare enhancement.
However, amid the dual squeeze of weak consumer spending in China and the traditional retail industry facing the impact of e-commerce, whether Yonghui Superstores can truly achieve a turnaround through store restructuring remains to be further tested by the market and time.