Lost ¥11.6 billion over five years, Yonghui (永辉) tells Sam’s Club (山姆会员商店) not to force suppliers to pick sides

Yonghui (永辉) has publicly urged Sam’s Club (山姆会员商店) not to pressure suppliers into “choose‑one” arrangements, it has been reported. The appeal came in an open letter from Yonghui’s private‑label arm 品质永辉 (Quality Yonghui), which framed the demand as “one don’t, six dos” — the single “don’t”: don’t force suppliers to choose; the “six dos” include commitments to better quality, cleaner formulas, fair pricing and ESG. Sam’s Club has not issued a formal response, and it has been reported that Yonghui likely raised the issue because it is feeling intensified competition for supply‑chain resources.

A struggling challenger presses its case

The public rebuke arrives against a bleak financial backdrop for Yonghui. The supermarket chain has posted five consecutive years of losses, with cumulative net losses of 116.4 billion yuan (約¥11.6 billion) since 2021, and its shares have tumbled from a ¥11.72 high to about ¥3.98, cutting market value substantially. Yonghui has defended the losses as part of a strategic pivot from scale expansion to “quality growth,” citing large‑scale store remodels, closures and one‑off impairment charges. It has been reported that industry sources say Yonghui’s new private‑label push and supply‑chain buildout are responses to mounting pressure from larger, better‑capitalised players.

Why Sam’s Club matters — and why the accusation echoes past rows

Sam’s Club is the high‑end, membership arm of Walmart and a bellwether in China’s membership‑supermarket segment. In recent years Sam’s has accelerated expansion in China, prompting local rivals to compete hard for premium suppliers. This is not the first time Sam’s has faced “choose‑one” accusations: in 2021 Carrefour and Alibaba’s Hema both alleged similar supplier pressure, charges Sam’s denied. It has been reported that interviews with several suppliers produced denials of coercion, and industry observers caution that bespoke product deals do not automatically equal exclusive, legally binding “choose‑one” contracts.

The dispute highlights a broader fault line in China’s retail scene: fierce competition for scarce, high‑quality suppliers as international chains expand and domestic players re‑tool. For Western readers, note that global retailers’ China strategies have geopolitical overtones — Walmart’s recent moves to refocus capital on its China business and Sam’s rapid store openings reflect how multinational firms are recalibrating amid shifting trade and investment dynamics. Will public naming‑and‑shaming change supplier behaviour, or is this simply the latest skirmish in a supply‑chain arms race? The answer will shape who controls China’s supermarket aisles.