This week's retail scene is as bustling as a market day. Yonghui finally admitted it hit the brakes on its "Fat Makeover" strategy, Sam's Club re-listed a batch of walnut cookies just 24 hours after customers found metal crowns in them, Hema closed three large stores in Beijing while simultaneously opening six smaller ones, and CCTV officially endorsed Henan's supermarket cluster—in short, some are cutting losses, some are facing crises, and others are pivoting to new paths.

Yonghui: After two years of "Fat Renovation," losses reached 25 billion yuan; finally halted.

On 7 28, Yonghui Supermarkets responded to the Shanghai Stock Exchange's inquiry letter regarding its 2025 annual report. One sentence in the response carried significant weight:No major store closures or Pango Lai-style renovations in 2026。

The numbers are sobering. In 2025, the company posted a loss of 25.52 billion yuan, closed 381 stores, and renovated 284 locations. One-time costs from renovations alone exceeded 12 billion yuan—covering asset write-offs, closure and renovation losses, lease penalties, and employee severance. Each item represents real cash outflows. With Zhang Xuansong's visit to Xuchang in 5 of 2024 marking the start, this more-than-two-year "copying Pang Dong Lai" reform drive has officially concluded.

Not entirely fruitless. Net profit turned positive in the first half of 2026, projected at around 2.5 billion yuan. Yonghui describes this phase as "recovery and consolidation." CEO Wang Shoucheng noted a shift from rapid restructuring to deep, refined operations. In plain terms: aggressive cuts have reached their limit; now it's time for meticulous execution.

A telling statistic: By the end of 2025, Yonghui's headcount dropped from nearly 10 before the "Pang" transformation to under 5. Two years later, the workforce was cut in half. Store count also fell from 775 to around 392, effectively halving its own footprint.

That said, admitting a path is unworkable is a hundred times better than forcing it. Yung Hing's real challenge now is figuring out what they can build after shifting from "copying others" to "being themselves." The answer may not come until next year.

Sam's cookies had a dental crown in them; the product was pulled and relisted 24 hours later.

This is probably the most outrageous thing that's happened this week.

On 7 25, a consumer in Dalian purchased Luxihe Nut Walnut Cookies on the Sam's Club app for 48.9 yuan. With over 20 monthly sales, it ranked 4 on the Biscuits & Pastries Best Sellers list. On 7 27, while eating the last piece, they bit into something hard and spat it out to find:Three connected metal dental crowns with an embedded natural tooth cross-section.。

A dental specialist commented that this was likely caused by a denture falling off during production and getting mixed into the dough before baking. The image is too vivid to stomach.

Sam's response was quite interesting. On 7/29, it was urgently delisted across all channels, sparking a #1 trending topic on Weibo. Yet, by the afternoon of 7/30, it was back online—just 24 hours after being taken down. The regulatory investigation is still ongoing.

The compensation process was a series of failed attempts: first, they offered a return plus $0; the consumer rejected it. Then, they escalated to a return plus $1, which was also refused. The consumer put it perfectly: "It's not about the money—it's whether you've actually investigated the root cause." Sam even tried to take the tooth crown as evidence, but that request was denied too.

This issue has escalated so significantly because Sam's Club food safety problems are not isolated incidents. In 2026, pesticide residues in freeze-dried strawberries exceeded limits; there was controversy over salmon standards; black pork traceability dates were falsified. On 6 15, the State Administration for Market Regulation just summoned Walmart China for talks.45 days after the meeting, another incident occurred。

CPG analyst Zhu Danpeng made a bold claim: "Sam's Club's quality control system has a major flaw—a systemic issue that cannot be resolved by simply replacing personnel."

Sam's Club achieved 2025 billion in sales in China with 1070 million paid members. Luxihe, founded in Nanjing in 2013, now operates 671 stores nationwide and recently secured over 100 million yuan in an A+ funding round in 5. On the Hei Mao Complaints platform, there are 309 complaints related to Luxihe. One is the industry leader; the other is a viral bakery brand—yet both have failed on quality control.

Hema closed three major stores in Beijing while simultaneously operating six smaller locations.

Hema's moves in Beijing this week can be described as "closing on the left while opening on the right."

The three Freshippo stores that closed are Yizhuang (closed on 8/3), Jinyuan (closed on 8/4), and Lize. The Haidian flagship at Yue Mao remains open but is downsizing its footprint. These three closures involve older locations opened around 2018, which were part of the legacy from Alibaba's strategic new-retail partnership with Easyhome, having operated for seven to eight years.

They are all launching simultaneously. Six ultra-computing NB stores will cover areas like Wangjing, Huilongguan, Sanyuanqiao, Tongzhou, and Huairou. In short: closing large stores and replacing them with smaller ones.

This reflects Hema's new strategy:Fresh Store + NB Small Shop + Forward Warehouse: Three Engines Driving GrowthAfter Yan Xiaolei (former CFO) took over, the core logic boiled down to eight words: "If a single-store model doesn't work, cut it." For older stores with high rents, declining foot traffic, and renewal price hikes, it's better to terminate them at lease expiration.

Hema has no cash flow issues. Alibaba's latest financial report shows Hema's overall GMV reached 1070 billion yuan, up about 43% year over year, with adjusted EBITA positive for the second consecutive year. Closing stores isn't a loss-driven amputation; it's a proactive adjustment while profitable. This is entirely different from Yonghui's forced store closures.

Hema is expanding nationwide without slowing down.

News about Hema opening stores this week has been coming thick and fast:

Qingdao's Chengyang district has seen its first Hema store open at MixC, spanning 8410 square meters and drawing massive crowds on launch day. In Xiamen, a K11 Select flagship is set to open in Q3 with an area of approximately 1500 square meters. This marks Hema's return to Fujian after six years—having partnered with Xinhua Department Store in 2017, exited in 2020, and now re-entering via a direct-operated model. Two more locations are planned for Xiamen, while expansion in Fuzhou is underway.

Tongling's first Hema Fresh store opening date has been confirmed; Huadu Park-style Commercial Street will also host Hema on 8/8. The Yongjia Hema launch was a huge hit, and the Dongguan Chashan Super Hema is now open.

One sentence: Hema is accelerating, driving growth across both online and offline channels. Online GMV now accounts for over 60% of total transactions.

Hema Bakery Supply Chain Adopts a New Approach

A less obvious update on 8 1: Haitong Technology (300915.SZ) acquired a 55% stake in Tangbox Food for 1.3 billion yuan, becoming the controlling shareholder.

Who is Tangbox Foods? It was incubated by Hema. Before the transaction, Hema held 80% of Tangbox via Tangdoo Technology. After the deal, Hema relinquished its controlling stake. The three parties also signed a five-year strategic cooperation agreement, under which Hema commits to placing annual orders with Tangbox of no less than 2.1 billion yuan through the end of 2030.

Tanghe Food achieved 2025 billion in revenue and 1839 million in net profit. This business is profitable. Why would Hema give up majority control?

At its core, this shift reflects Hema's evolving strategy for its private-label bakery supply chain: moving from "fully in-house ownership" to "upstream collaboration." Building factories and production lines internally involves heavy assets; partnering with specialized suppliers allows Hema to operate more lightly while leveraging their expertise in R&D and manufacturing. The focus hasn't disappeared—it's simply being approached differently.

CCTV officially recognizes Henan's supermarket groups.

From 7 to 30, CCTV's "Economy Half Hour" aired a special report titled "New Industrial Momentum: Why Do Henan Supermarkets and Grocery Stores Defy the Market Trend?"

In the past, whenever people thought of Henan supermarkets, they immediately thought of Pang Dong Lai. This time, CCTV's point is:It's not just Pang Dong Lai.。

Xianfeng Life, Tao Xiaopang, Huayu Baijia, Farmer Mr. Liu — a wave of local brands has been spotlighted. Within 6 km of Zhengzhou's CBD in Zhengdong New District, 13 major supermarkets are densely packed, exceeding the density of core business districts in Beijing, Shanghai, and Guangzhou. Yet all are thriving, with no price wars.

They each have their own way of doing things. Farmer Mr. Liu transformed his store into a cave, water feature, and Wizard of Oz-themed greenery, even keeping ducklings. He samples over 300 products daily but stocks just 60. Huayu Baijia operates like a community canteen, offering on-site cooking for groceries you buy. Tao Xiaofang goes further: its 800 private-label brands account for 30% of sales, with the Baolong Plaza location generating ¥1.8 billion in revenue in the first half of the year alone.

Pang Dong Lai's own data is equally impressive: 2026 first-half sales reached 139.5 billion yuan, a year-over-year increase of 24.23%. The company has stably employed over 1.9 thousand people and attracted more than 100 thousand study tours from across the country.

The Ministry of Commerce and eight other departments recently issued the "Opinions on Accelerating the Innovative Development of Retail," proposing a "one store, one policy" approach to create new retail scenarios. This batch of supermarkets in Henan is shifting from competing on price to focusing on service, direct sourcing from production areas, and private-label brands—aligning well with these policy initiatives.

Interestingly, while Yonghui's attempt to replicate Pang Dong Lai's model fell short, local brands in Henan have each carved out their own success. This is worth reflecting on.

Pang Dong Lai: Constantly Trending

Pang Dong Lai made headlines several times this week, though not by choice.

The issue of free drinking water being treated as a public tap has gone viral. Pang Dong Lai responded that they won't stop it and even provide hot water in winter. With this stance, how are other supermarkets supposed to follow suit? They can't.

Someone spread false rumors online claiming Pang Dong Lai in Zhengzhou was offering monthly salaries of 7000-10000 yuan. Pang Dong Lai issued a statement clarifying that no such job postings were ever made. While the misinformation has been debunked, it highlights just how hot Pang Dong Lai's brand has become—so much so that people are fabricating stories to ride the trend and gain traffic.

There's one more thing—he spent 200 million on a top-tier sound system, installed in the store for customers to enjoy free karaoke. That's 200 million! Dong Laila has always operated this way: invest heavily in customer experience without hesitation.

Other notable points

ALDI is opening a new store in Suzhou.Xujing Li store is under renovation and scheduled to complete on 8/20. So far, 2 stores have opened in Suzhou, with 3 more planned. ALDI's expansion pace in East China remains very steady.

New brands like Jinlimen are targeting the "fresh snacks" segment in Jingjiang convenience stores.The combination of convenience stores and freshly made snacks is emerging as a new growth driver in lower-tier markets.

News of a 24-year-old rider's death in Hangzhou at Hema has sparked discussions about platform labor management.This is a heavy topic, but it's one the industry can't avoid. Riders' labor protections and platforms' employment responsibilities shouldn't be overlooked in pursuit of new retail GMV growth.

Sam's Club Jiangyin Store has new updates: Wuxi's 3th Sam's Club will open this year.Sam's Club is ramping up store density in the Yangtze River Delta. On one hand, food safety issues keep arising; on the other, expansion continues. Seeing these two trends side by side feels quite surreal.

Starting next week, pre-event content for the China Supermarket & Convenience Store Expo (CSC) Hangzhou will go live. All key developments this week — Yonghui's strategic pivot, Sam's Club's quality control crisis, Hema's supply chain adjustments, and Henan retailers' differentiation breakthroughs — point to one critical question: how can the retail industry find a truly sustainable business model? On 8/19 at the Hangzhou International Expo Center, these issues will be extensively discussed. With less than three weeks until the event, it's worth paying attention now.