1.29 billion in fines imposed, 100 retail stars visit Xuchang: This week, supermarkets are taking a crucial lesson.
Retail Industry News · Weekly Review
1.29 billion fines issued; 100 retail stars head to Xuchang
This week, supermarkets are catching up on a crucial lesson.
2026 10 12 — 10 18 (Week 42) · Super Meeting
Retail this week has a subtle atmosphere.
On one side, Walch mooncakes, Shuanghui's "problematic pork," and Costco apricots were repeatedly cited, resulting in a 1.29 billion yuan fine directly imposed on the chairman. On the other, the Ministry of Commerce gathered top-performing retailers from across China in Xuchang, Henan, for their inaugural session—where Dong Yulai took the stage to deliver a core message: "Make products genuine, treat people with dignity."
Hot and cold are actually two sides of the same coin:The era of rapid expansion in retail is over. Today, success hinges on trust, quality, and mastering the fundamentals.No major company can skip this course.
Headline 1: Food safety oversight tightens as Double Hui's 1.29 billion yuan fine is levied directly on the chairman
The biggest signal this week isn't that one company failed, but that the regulatory bar is rising.
On 10 month 12 day, the Central Political and Legal Affairs Commission issued the "Opinions on Strictly Investigating and Punishing Illegal Acts That Endanger Food Safety in Accordance with the Law," which was publicly explained by relevant responsible officials. The "Opinions" directly named...Meat products, campus food, health supplements, fruits and vegetablesFour key areas and critical links—including production and processing, online sales, on-premise dining, and food imports—will see decisive action. Strict control over the application of suspended sentences and exemptions is required; severe cases must face heavier penalties. Simultaneously, we will address longstanding issues such as "fines instead of criminal prosecution" and "failure to penalize when warranted." We also explicitly commit to accelerating amendments to the Food Safety Law toFresh food e-commerce, restaurant delivery, live streaming commerceIntegrate emerging business models into the regulatory framework.
This isn't empty rhetoric. Just this week, Shuanghui, known as the "King of Pork," received its penalty notice.
On the evening of 10 month 9, Shuanghui Development announced that the company, its subsidiary Wangkui Shuanghui, Chairman Wan Hongwei, and other senior executives received a total of 8 penalty decisions.Total fines and confiscations approximately 1.29 billion yuanThe incident began in 2025, when a sample of Shuanghui's "pork hind leg" from Wangkui, Heilongjiang Province tested positive for veterinary antibiotics during an inspection.Lincomycin residue: 7700 μg/kg, which is 37.5 times the national standard limit of 200 μg/kg.Involving 910 pigs. Inspectors also uncovered a series of management loopholes, including insufficient pre-slaughter fasting and resting for less than 12 hours, failure to appoint a food safety director, and non-compliance with self-established sampling inspection protocols.
The two most critical points for the industry to consider are: one,Responsibility has been assigned to the individual.The Chairman, Wan Hongwei, was personally fined 3764.62 yuan; the President, Vice Presidents, and Chief Engineer were collectively fined an additional approximately 1870 yuan. Second, Shuanghui's initial attempt to blame upstream farmers was rejected, and its apology statement contained a critical error—listing "batches" instead of "heads"—which violated the Anti-Unfair Competition Law, resulting in a further fine of 200 yuan. The company expects this penalty to reduce its net profit attributable to shareholders for year 2026 by approximately 6380.66 yuan.
Editor's Note:The shift from penalizing companies to holding executives accountable, and the tightening of links between administrative and criminal enforcement, is leaving food businesses with less room for ambiguity. For distributors relying on suppliers or private-label brands, this serves as a stark warning: co-branding does not grant immunity. Every step in product selection and quality control may face retrospective scrutiny.
Headline 2: The Ministry of Commerce Launches in Xuchang, Elevating Pang Dong Lai's Experience to a "National Curriculum"
From 10 to 16, the Ministry of Commerce held an event in Xuchang, Henan.National Retail Innovation and Transformation Training ProgramThis marks the first nationwide industry training organized by the Ministry of Commerce specifically for retail enterprises, with approximately 100 representatives from provincial commerce authorities, industry associations, and dozens of leading national or regional companies in attendance.
The opening session was led by Yu Donglai, founder of Pang Dong Lai, with the topic "Shining with Humanity: Building a Happy Enterprise." Participants also visited Pang Dong Lai's Tian Shi City Store, Central Kitchen, and Logistics Center. Representatives from Hebei Xinyulou, China Resources MixC, Changchun Zhe Youshan, and Beijing Daoxiangcun shared insights on department store self-operation, business district management, and revitalizing heritage brands.
Here's a taste of the weight of this "sample": The total sales for Pang Dong Lai in the first 8 months of this year have already exceeded195 billion yuan;Spurred by its success, Xucheng City welcomed over 4800 million tourists and achieved a comprehensive tourism revenue exceeding 340 billion yuan. Earlier this year in 7, the Ministry of Commerce and 9 other departments issued the "Opinions on Accelerating the Innovative Development of Retail," which formally incorporated practices pioneered by Pang Dong Lai—such as "developing private-label brands," "weighing goods without packaging" ("skin-to-weight"), and "encouraging no-questions-asked returns"—into policy documents.
Editor's Note:A regional supermarket in eastern Henan, which avoids capital markets and prioritizes steady growth over rapid expansion, has emerged as a national leader in retail transformation. This shift reflects a broader reevaluation of the past decade's obsession with scale. By hosting its training center in Xuchang, the Ministry of Commerce signals a clear direction: future policy incentives will favor retailers that return to core values—products, service quality, and employee well-being.
Walmart Group: Own-Brand Controversy Unfolds Alongside Accelerated Expansion
· Wojixian mooncakes caught in controversy over "0 trans fat" claims.On 10 12, the State Administration for Market Regulation issued a notice stating that among the 52 non-compliant samples out of 1940 batches tested, a batch of Wojiexian Custard Mooncakes sold by Walmart Nanning Mingxiu West Road Store on Meituan was found to contain trans fatty acids.0.67GB/100GB, and according to the national standard, the measured value of "0 trans fatty acids" must not exceed0.3G/100GBThis batch was manufactured by Zhejiang Jiaxing Yuqianshun on 7/1. On 10/14, Walmart issued an apology, stating that the batch was immediately removed from shelves and that the supplier has completed process optimization and passed re-inspection. It should be noted that the renewed external focus on this issue...The Vibrio parahaemolyticus exceedance in Wagexian salmon is from the 8/21 report.(Single sample maximum 510CFU/g) is not a new event this week.
· Store expansion is accelerating without brakes.On 10 11, Walmart Shenzhen Futian KK ONE launched its next-generation store, becoming the 49th location in Shenzhen and the 3th new-format store opened within a single month (this event took place last week, serving as background context). The new format features WOFresh. For autumn, it introduces the "Seasonal Delights x Osmanthus Season" series, with flavors like Gastrodia Stewed Pigeon and Morel Beef Potato Chips—flavors are defined by local channels.
· Global CEO visits Beijing.On 10/14, Walmart Global President and CEO John Furner met with top Beijing municipal officials in Beijing, stating that the company will continue to expand its investment and business operations in China. This year marks 30 years since Walmart entered the Chinese market.
Comment: Private labels account for half of Walmart's global profits and represent the most promising growth engine in China. Yet as expansion accelerates, quality control faces mounting pressure. Innovation can be bold; standards must remain non-negotiable.
Sam's Club: Store 70 Opens; Membership Program Begins "Leak Repair"
On 10 13, Sam's Club opened its 70nd store nationwide in Wuxi Jiangyin. With over 2 square meters of shopping space and approximately 4000 products, the launch introduced 22 new items exclusively for this location, establishing a "three-store footprint" across Wuxi.
· Revised Sam's Club Membership Agreement 10 effective: Real-name verification for friend/family cards (sub-cards) allows activation of up to 2 primary member sub-cards every 365 days, with a maximum of 1 sub-cards bound simultaneously. This directly addresses the long-standing issue of scalping and gray-market resale of sub-cards.
Pistachios remain in high demand. Sam's Club limits purchases to 2 units per member every 30 days, with the 1.13kg-pack price increased from 89 to 99.9. Costco has also tightened purchase limits in multiple locations; scalpers are reselling each pack at a markup of 20–30.
Review: As stores become denser, the value of membership benefits must be protected. With the shift from unlimited re-registration to 2 times per year, Sam's Club is moving toward more precise member identity management—a necessary step for warehouse clubs to mature.
Costco Fined Again for Non-Compliant Dried Apricots; Third Penalty This Year
According to the National Enterprise Credit Information Publicity System, Costco (China) was fined by the Shanghai Pudong Market Supervision Department for selling 1.13kg-packaged dried apricots with excess sorbic acid and its potassium salts; the retest also failed.32.99 ten thousand yuanOn 10/12, Costco China responded that the affected batches were immediately removed from shelves, a recall was launched in 7, and members can still return items at any store. This marks the company's third penalty this year for non-compliant products (involving men's down jackets and luggage). According to data from the China Chain Store & Franchise Association, Costco China's sales in 2025 reached approximately 100 billion yuan, with an average of over 14 billion yuan per store. Globally, Costco reported net sales of 2972 billion USD in fiscal 2026, representing an 10.1% year-over-year increase.
Review: Single-store performance remains strong, but quality control issues with imported goods and private-label products are raising red flags, directly eroding the "pay-for-trust" membership model.
Hema: Second Store Opens in Taiyuan as Chain Deepens Provincial Market Penetration
On 10 16, Hema Fresh's Taiyuan Longcheng Wanda store opened, stocking over 7000 products with delivery within 3 km in as little as 30 minutes. This is the second store to open in Shanxi since Hema entered the province in 1 this year, with two more stores planned for Linfen and Jincheng before year-end.
Review: From its first store in the provincial capital to rapid expansion and extension into prefecture-level cities, Hema has followed a "one-year validation, two-year rollout" pace in second-tier provinces.
Metro: First Flagship Store in Shandong Opens in Linyi
On 10/16, Metro opened its Linyi Xi'an Road store, spanning over 2.8 square meters. As Metro's 8 location in Shandong and its first flagship store, it features approximately 5000 carefully selected products, with fresh and daily items accounting for 37%, private label products for 30%, and imported goods for around 15%. The store operates with a "store + pre-warehouse" model, offering delivery within 1 hours to customers within an 5-kilometer radius, while also serving local B2B clients such as restaurants. This year marks the 30th anniversary of Metro's entry into China and 25 years of deepening its presence in Shandong.
Verdict: By placing its flagship store in Linyi rather than Jinan or Qingdao, Metro is betting on the consumption upgrade of a second-tier powerhouse city. This move targets the region's 10 million-plus population and robust trade logistics hub in southern Shandong and northern Jiangsu—revaluing the market for foreign investment.
JD 7Fresh: New Beijing Malianchao Store Opens Ahead of "Double 11" Warm-Up
On 10 16, JD 7Fresh opened its new store at Beijing Ma Liandao Xichenli, drawing a large crowd. During the same period, 7Fresh launched its Double Ninth Festival Hot Pot Season under the theme "Seeking Freshness from Mountains and Seas," introducing newly launched house-brand sliced meats and baked goods.
Review: With offline stores, private labels, and instant delivery all in play, 7Fresh is becoming JD's physical entry point for telling the story of instant retail beyond major sales events.
RT-Mart Unveils First Super-Transformed Store, Continuing Shift Toward Medium-Sized Community Locations
On 10 month 12 day, the first RT-Shop Super store in China launched. Converted from an existing hypermarket, it is positioned as a community fresh food and lifestyle supermarket. At the same time, another RT-Shop Super opened at Liushui Dongwuyue Plaza in Huai'an, marking a county-level flagship project in the three-year strategic partnership between Gaoxin Retail and Eversince Wuyue.
Review: Shrinking hypermarkets into ~5,000 sqm community supermarkets is one of RT-Mart's survival strategies. Retrofitting existing stores is lighter than opening new hypermarkets and better aligns with daily meal needs.
Yonghui: Expands to Qingdao, 36 billion yuan debt case execution obstacles cleared
On 10 13, the Yonghui Board approved a proposal to invest 1980 million yuan to establish Qingdao Yonghui with registered capital of 2000 million yuan, located in Laoshan District. This will also mark the launch of its next-generation "Fat Transformation" flagship store in Qingdao, making it the 5th Yonghui store in Shandong. On the evening of 10 14, the company announced that the court rejected Dalian Yujin's application to enforce the arbitration award, clearing legal obstacles for the forced execution of the 36.39 billion yuan share transfer payment.
Review: Yonghui is simultaneously advancing operations and asset recovery—continuing to refine store openings while pursuing overdue receivables.
Meituan: Little Elephant brings freshly baked bread to forward warehouses; Happy Monkey expands its store network with increased density.
· Xiaoxiang Supermarket Front Warehouses Now Launch Freshly Baked Bakery.According to Business Observer on 10/16, Little Elephant added fresh-baking areas and ovens to multiple front warehouses in Beijing this year, offering approximately 30 fresh-baked SKUs.Sold today only. Institutional price range: 10—20 CNYThe SKU count now matches the fresh-baked offerings of hard-discount community supermarkets. Scaling up fresh-made food through a pure forward-warehouse model marks the digitization of authentic, everyday flavors.
· Happy Monkey Acceleration deepens its focus.Meituan's hard-discount brand Happy Monkey announced its latest expansion on 10 14. On 10 16, four new stores opened simultaneously in Dongguan, Huizhou, Tianjin Binhai, and Jinhua Lanxi. Two more stores will open on 10 23 in Guangzhou Huadu and Shaoxing Zhuji. As of 9 30, the company operates over 100 stores (10 in Guangdong, 11 in Zhejiang). Each store ranges from 800 to 1000 square meters, carries approximately 1600 SKUs, and integrates retail and warehouse operations to enable delivery within 3–5 kilometers per hour.
Verdict: Meituan is walking on two legs—"Xiao Xiang" for freshness and "Happy Monkey" for savings. The model of using dark stores with ovens represents a heavy-asset strategy to capture young consumers and high-frequency baking demand, while Happy Monkey proves that hard-discount models require regional density first. Both paths point to the same conclusion: community retail has no room for light cavalry.
County and Region: Shengmei City in Lushan, Henan Grand Opening Draws 0+ Visitors on Day One
On 10 month 16 day, Shengmeicheng, a commercial project for existing stock renovation in Lushan County, Pingdingshan City, Henan Province, officially opened.First-day foot traffic exceeded 6 thousand people.Originally the Zheng'an New World Plaza, this project spans approximately 4.2 square meters. In month 1, it was acquired and redeveloped by Jinshengmei Group, a local market leader, with leasing and operations managed by Shanghai Da Ying Commercial Management. Leasing launched in month 6 and the center opened just 4 months later, hosting over 100 brands. More than 80% of these are Lushan's first-ever locations, including Starbucks, Pizza Hut, and Oscar Cinema—filling critical gaps in the local retail landscape.
Review: A once-dormant county mall has come back to life through the combination of local enterprises, professional management, and a curated matrix of first-store brands. Counties have strong consumer power; what they lack is the patience to thoughtfully adapt urban retail formats to their local context.
Other recommended reads
· ALDIThis week, we reaffirmed our customer value proposition of "making every penny count," emphasizing a virtuous cycle of higher quality and lower prices. Industry media reports that our stores in China have surpassed 100.
· Golden Grain GateOpened its first store in Shanghai at MixC (approx. 400 sqm) on 10/15, the brand continues to draw heavy foot traffic on weekdays, has added around 20 new locations in the past 3 months, secured fresh funding, and remains a top performer in the "fresh snacks" category.
· Ant A-Fu partners with OléLaunching the Health Zone: 60 stores nationwide go live as premium supermarkets collectively bet on "making health a daily habit."
Trend 1: Private labels enter the "quality control兑现 period," amplifying both OEM premiums and risks.
Woji Xian mooncakes, Costco dried apricots, and Shuanghui's problematic meat: three cases this week that seem to involve different companies but share the same core issue. As a retailer's private-label portfolio grows—now accounting for 30% of new Metro stores and averaging 38.8% in 17 European countries—the role has shifted from simply selling products to defining them and bearing primary responsibility. Claims like "0 trans fat" or "18-step quality checks" are essentially promises of trust to consumers.With private labels, you save on brand premiums, not quality control costs—the larger your scale, the greater the debt you must repay.
Trend 2: "Street-life charm" is no longer exclusive to offline stores—front warehouses and hard-discount retailers are going heavy on freshness.
Elephant brought ovens into forward warehouses, Xueji Roasted Goods opened community supermarkets, Jinlimen built queues with fresh braised baked goods, Metro and RT-Mart strengthened 3R and in-store baking... This week, diverse business models are converging on a single direction:Build a barrier with fresh, freshly made, short-shelf-life, and high-frequency food.Pre-positioned warehouses with equipment are used to solidify assets and secure the community market; hard discount stores in county areas help spread supply chain costs. "Fresh + On-site Preparation + Instant Delivery" is becoming a universal entry ticket for all retail formats. The real differentiator lies in achieving sufficient order volume and minimizing spoilage.
Trend 3: Retail competition shifts from a "scale narrative" to a "trust narrative," with policy support favoring the best.
The Supreme Political and Legal Affairs Commission's crackdown on food safety sets the bottom line, while the Ministry of Commerce's Xuchang training program establishes the benchmark. The fact that both events occurred in the same week is no coincidence. Adding to this, after four departments clarified the issue regarding formamide in diapers, JD.com immediately launched a "100x compensation for detected violations" policy. This clearly reveals a policy-platform-consumer transmission chain:Stricter regulations raise the cost of violations, platforms compete for trust with extreme compensation promises, and consumers vote with their feet.In the coming years, a supermarket's core competitiveness won't just be low prices and convenience—it will be whether you're willing to compensate when things go wrong and whether you can give customers peace of mind day-to-day.
1. The Central Political and Legal Affairs Commission has cracked down severely on food safety-related crimes and violations.The "Opinion" released for public interpretation on 10 12 focuses on meat products, school food, health supplements, fruits and vegetables, and other areas. It requires strict criminal prosecution throughout the entire legal process, tight control over suspended sentences and exemptions from punishment, improved coordination between administrative and criminal enforcement, and an information-sharing platform. The opinion also pushes for amendments to the Food Safety Law and clarifies regulatory requirements for fresh e-commerce, food delivery services, and live-streaming sales. (Xinhua News Agency, People's Daily, CCTV)
2. Four departments announce findings on formamide in diapers.On 10 15, the joint investigation team from the State Administration for Market Regulation, the Ministry of Industry and Information Technology, the National Health Commission, and the National Center for Disease Control and Prevention announced: Testing results from all 168 domestic infant diaper manufacturers, covering 180 brands with 368 finished product batches and 32 site-specific samples, along with retests of remaining samples and blood specimens submitted by social media accounts.Formamide not detectedProvide an authoritative conclusion regarding the public controversy since 6 this year.
3. Platform quality control war escalates.On 10/16, JD Supermarket announced that its self-operated diapers passed comprehensive spot checks with no formamide detected, and launched a "100x Compensation for Positive Results" policy covering five substance categories: formamide, migratory fluorescent whitening agents, formaldehyde, acrylamide, and phthalates. The first batch includes nearly 5000 products marked with this certification, involving brands like Huggies, Pampers, babycare, and Babycare Baby. Simultaneously, the company introduced "Free Size Exchange" and "No Worries About Diaper Rash."
4. State Administration for Market Regulation announces 5 typical cases of cracking down on substandard and low-priced products on 10 14Two cases involved online sales and live-stream commerce, citing inflated prices and substandard goods.
5. Supply Chain Spotlight: Global pistachio supply and demand remain tight.Driven by demand surges from "Dubai chocolate" and harvest impacts from California's weather, rising raw material costs are being passed down the supply chain. Sam's Club and Costco have implemented purchase limits, while local brands like Three Squirrels have raised prices; cost-channel negotiations in the nut category will continue.
1. Sam's Member's Mark Blueberry Cheesecake(Jiangyin Store Exclusive Launch): Crafted with European imported light cream and New Zealand cream cheese, this bestseller from Sam's Club features a filling of homemade blueberry sauce made from premium imported berries. It continues the bakery's signature "animal-based cream + imported ingredients" approach.
2. Walmart WJX "Seasonal Delights × Osmanthus Season" Series: Regional novelty flavors like Gastrodia elata & Pigeon Soup Chips and Amanita Matsutake Beef Chips. Products defined by channel demand and produced according to seasonal cycles, ideal for suppliers focusing on "channel-exclusive snacks."
3. JD 7Fresh "Mountain & Sea Fresh Hunt" Hot Pot Season Pre-Sliced Combo: 24-hour fresh-cut Chaoshan beef tenderloin (yield is only about 1% of the whole cow) paired with 180° safe chilled hand-sliced lamb, delivered from source to store within 24 hours. Ideal for Chongyang Festival family banquets.
4. Metro Premium Selection 3R & German Baking SeriesWith the launch of Linyi's first Shandong store, we replicate authentic German flavors. Backed by Mazaida's full traceability, this marks the new product rollout of our "premium ingredients, expertly selected" positioning in the regional market.
5. Yonghui Farm: All Corn Products RefreshedLaunch organic and low-GI certified versions on 10/14 to integrate health certifications and functional attributes into staple food categories, enabling observation of the "healthy staples" trend in hypermarkets.
· Double 11 ignites offline combat.JD.com's Double 11 has officially launched, with events like 7Fresh's mid-month appreciation day (save 20 on orders of 99) rolling out. Focus on how major supermarkets leverage these promotions to drive home delivery services and boost their private labels, rather than just participating in e-commerce sales.
· Happy Monkey opens two new stores.Stores in Guangzhou Huadu and Shaoxing Zhuji open on 10/23. Watch for the actual performance of its hundred-store density in South China and county-level model.
· Chongyang Festival family dinners continue to drive economic activity.This year, the Double Ninth Festival falls on 10/18. Sales data for hot pot season, fresh-cut meats, ready-to-eat dishes, and senior nutrition products warrant tracking.
· Observation of Sam's Club New Rule Implementation.The Family Card reassignment limit effective on 10/16 will soon reveal its impact: how scalpers respond, whether paid membership conversion improves, and if Happy Nut supply eases.
· Food safety follow-up.Monitor the implementation of Shuanghui's rectification measures, follow-up actions for Waoji Xian and Costco, and further public disclosure of typical cases involving coordination between administrative and criminal enforcement under the revision of the Food Safety Law.
· Regional store launch sprint.Tianjin Hongqiao Sam's Club enters its final push for year-end opening, while Hema stores in Linfen and Jincheng are slated to launch this year. Growth potential remains strong in new lower-tier markets.
This week's news is sourced from the State Administration for Market Regulation, the Central Political and Legal Affairs Commission, Xinhua News Agency, People's Daily, Economic Information Daily, Southern Metropolis Daily, The Beijing News, Every Economic News, 21 Securities Times, Jiemian News, Business Observer, Lianshang Net, and Dahe Finance Cube. All key facts have been cross-verified by at least two independent sources. Circulating reports regarding Wojixian salmon and Hema Premier Black Label stores have been verified as past events and are not included in this week's briefing.
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