Supermarkets Stage a "Major Debacle" — Why Are Henan Supermarkets the Only Ones Remaining Unscathed?

Slump on the national stage, resilience in Henan

China's listed supermarket sector is under acute pressure. Yonghui (永辉超市) disclosed a 2025 profit warning, forecasting a parent-net loss of about RMB 2.14 billion and an adjusted net loss near RMB 2.94 billion — its fifth consecutive year in the red and more than RMB 10 billion in cumulative losses. Major chains have been closing stores: Yonghui shuttered 381 outlets in 2025 and other groups have dramatically shrunk footprints. Meanwhile, it has been reported that many out‑of‑province operators are asking Henan players for help. How can one inland province buck this trend?

Henan's supply-chain edge and business reset

The answer lies in geography and upstream control. Pang Donglai (胖东来) posted roughly RMB 23.53 billion revenue in 2025, up 38.7%, and expanded amid the downturn; Huayu Baijia (华豫佰佳超市) opened a flagship IP store in Zhengzhou that drew tens of thousands on day one. Henan sits at the center of China’s transport grid and has a deep agricultural processing and cold‑chain base — it has been reported that the province accounts for disproportionate shares of products such as ham sausages, instant noodles and dumplings. Provincial policy also backs domestic consumption under Beijing’s “dual circulation” push, and local chains have doubled down on central kitchens, logistics parks and private‑label goods to lower costs and sharpen differentiation.

Strategy over fate: what the sector can learn

Executives say the lesson is operational, not technological. Senior figures including Yonghui’s reform group leader Ye Guofu and Pang Donglai’s chairman Yu Donglai argue the winners stopped relying on slotting fees and supplier favoritism and instead curated assortments around consumers, quality and in‑house supply. It has been reported that many chains are trialing the “Pang” playbook — tighter selection, vertical integration and service focus. Industry data from the China Chain Store & Franchise Association (中国连锁经营协会) show early signs of recovery among chains that have remodeled stores and products. Can Henan’s model be scaled nationwide? The province’s logistics and sourcing advantages are hard to transplant, but its operational lessons offer a blueprint: offline retail can still thrive if it refocuses on consumers rather than conceding defeat to e‑commerce.