In 2024, China's supermarket sector was turbulent, with once-prominent brands facing closures, bankruptcies, or crises. Some once-glorious supermarket brands faced closure, store shutdowns, or crises in 2024, due to strategic errors, management problems, market shifts, or failure to keep up with changing consumer demands.

Shanghai CityShop, Xinglong Family, Ganyuting, and Fudi are all established supermarket chains that once enjoyed fame and even held leading positions in their regional markets.

How did these traditional supermarkets go from "glory" to crisis, or even brand disappearance? Through their rise and fall, we can glimpse the deep changes and lessons in the retail industry.

Shanghai CityShop Ceases All Operations

Where Is the Path for Premium Supermarkets?

In April this year, Shanghai CityShop, a premium supermarket that had operated for 29 years, suddenly announced the closure of all its stores.

At that time, a notice issued by Shanghai CityShop stated: "In recent years, Shanghai CityShop has struggled to operate. Despite various self-rescue measures, it remains unsustainable. The company has now resolved to dissolve and will cease operations of all Shanghai CityShop stores from April 16."

In simpler terms, it closed due to sustained losses. How did a supermarket that had operated for so long gradually head toward closure?

In 1995, Cui Yixiong founded Shanghai CityShop.

From the outset, Cui positioned CityShop with fresh and imported goods as its main offerings, featuring global cuisines, with over 80% imported products, making it one of Shanghai's most renowned high-end imported premium supermarkets.

At that time, as China opened up, more foreigners came to Shanghai, allowing them to find hometown flavors and Shanghai residents to experience exotic tastes. This was CityShop's initial differentiated positioning.

In recent years, as China's middle class grew, CityShop's Chinese customers increased.

Before the full closure, CityShop operated nearly 20,000 products, with over half imported, including 8,000 directly sourced from abroad, accounting for over 60% of sales.

CityShop's positioning was always "products over services," with a focus on high quality as its hallmark.

Cui Yixiong believed that whether customers shop online or offline, their goal is to buy goods. With good products and good service, achieving customer satisfaction, supermarkets will have their own survival space.

For example, with imported beef: "Beef prices vary, but we don't touch cheap beef because our priority is quality, then price," Cui said.

To ensure beef quality and price, CityShop sourced beef from foreign farms, then sent it to slaughterhouses. They found their own farms to guarantee the source and quality. Beef prices ranged from 50 to 250 yuan per jin, catering to different consumer needs. The same cut could vary in price by five times.

CityShop offered over 20 types of cooked beef products to meet diverse customer needs.

To ensure high product quality, CityShop controlled quality from upstream, laying out a full industry chain.

Since 1997, CityShop established national agricultural standard demonstration direct-operated bases in Shanghai, Hainan, Yunnan, etc., totaling over 5,000 mu.

Unlike many supermarkets that use "contracted farms," staff at direct-operated bases are CityShop employees, with corporate and standardized management. Pig feed and vegetable seeds are directly controlled by CityShop.

CityShop had its own central factory, processing coffee, cakes, bread, and pork segmentation.

From direct-operated bases to ambient and cold-chain processing centers, plus its own logistics system, CityShop controlled the entire supply chain, truly achieving "self-imported products, self-grown vegetables, self-roasted coffee, self-baked bread."

Cui also stated that in food, one must ensure the quality and safety of fresh products from the source. "We are willing to pay for high-quality, safe products."

This full industry chain layout and high-quality products, when not reaching a certain scale, mean high costs to absorb.

But more retail companies joined the premium supermarket competition, including Yonghui Superstores, Century Lianhua, China Resources Vanguard, Beijing Hualian, and cross-industry entrants like G-super under Greenland Group, Freshmart under Shanghai Jiuguang Department Store, and Easy Fresh under Easyhome.

At that time, a retail executive told me that the prospects for high-end premium supermarkets were good, and supermarkets using low-price competition strategies should be nearing their end. Now, the focus should be on customer experience and scene experience.

In China, high-end premium supermarkets have great prospects, catering to consumption upgrades. This may be the main reason many companies expand into premium supermarket businesses.

Given this intense competition, it's understandable that CityShop brought in a new major shareholder.

In February 2017, an insider told me that CityShop had a new major shareholder, but it was still confidential.

In March 2017, Cui told me that only industrial and commercial registration changes had been made, and no formal agreement had been signed. He also said he would not exit CityShop, still holding shares, and "continue to do this."

However, some industry analysts believed Cui had essentially exited, with his shareholding being symbolic to show he was still with CityShop.

At that time, Beijing Business Today reported that Fruit Day had invested in CityShop. Fruit Day confirmed a deep strategic cooperation with Shanghai CityShop, with Fruit Day investing in CityShop.

Some packaged fruits in CityShop had Fruit Day logos alongside weight labels. In fact, the fresh food area in CityShop was gradually being handed over to Fruit Day for operation.

At that time, Shanghai CityShop had 15 stores: 13 in Shanghai and 2 in Beijing.

Unfortunately, even after the new major shareholder took over, CityShop's fate was not ultimately reversed. Seven years later, all CityShop stores closed.

Of course, some say that CityShop's scale problem has never been solved. Despite innovations and reforms in recent years, embracing the internet, expanding customer sources, and better serving customers, business still didn't improve.

From another perspective, since its founding, China's consumption has been "upgrading," but now due to various complex reasons, consumption is on a downgrade path, so premium supermarkets facing challenges is not surprising.

Another supermarket with over 30 years of history, Fudi Supermarket, faced a completely different predicament.

Fudi Supermarket's Blind Diversification

Led to Capital Chain Break

On April 6 this year, a joint announcement by Xiantao Commerce Bureau and Hubei Fudi Industrial Co., Ltd. brought Fudi Supermarket into the spotlight.

The announcement stated that the company's transformation and development did not meet expectations, leading to operational difficulties and some conflicts. Currently, at Fudi's request and after city government research, the Commerce Bureau has led a joint working group with Fudi to address current issues, accept public consultations and registrations, and respond to social concerns promptly.

Fudi Supermarket was the largest local supermarket chain in Xiantao, Hubei, deeply rooted in the regional market, with stores in almost every township in Xiantao. Notably, Fudi had operated locally for over 30 years with a good reputation.

At its peak, Fudi had over 550 stores, but in April, almost all stores closed.

According to Lianshang.com, as early as late February, Fudi employees reported two months of unpaid wages, and many citizens and suppliers surrounded the company demanding payment.

On April 3, Fudi stores in Tianmen's Yuekou, Yuxin, Zhanggang, etc., almost all closed, and the Fudi Tianmen headquarters on Zhongxin Avenue was also shut. Meanwhile, Fudi stores in Xiantao, Qianjiang, Jianli, Jingzhou, etc., were also reported to be closing.

An insider revealed that Fudi's township stores had all closed, and some city stores that remained open would not restock and would close soon.

In January 1993, Fudi's first store opened in Xiantao city.

Then, steadily, in 2003, Fudi expanded beyond Xiantao, opening outlets in townships across more than ten cities and counties, including Jianli, Jingzhou, Honghu, Hanchuan, Qianjiang, and Tianmen.

In 2012, Fudi reached its peak, with over 550 supermarket chain stores, 680,000 square meters of warehousing and business area, nearly 5,000 employees, and sales revenue exceeding 7 billion yuan.

As for the reason for Fudi's store closures, the announcement did not specify, only stating that transformation and development did not meet expectations, leading to operational difficulties.

Based on Fudi's business types, besides supermarkets, in recent years Fudi explored new areas such as life plaza projects, fashion plaza projects, and fast-food chains, and also launched Fudi Palm Supermarket, supporting online orders and offline pickup.

From "transformation and development did not meet expectations," it may be related to these business types.

In earlier years, many well-known supermarkets got involved in commercial real estate and found it hard to extricate themselves, eventually facing capital chain breaks and closures or operational difficulties.

In recent years, not only regional supermarkets but almost all offline supermarkets face operational challenges: first, online impact; second, declining average transaction value and customer traffic, leading to sales decline.

Some national supermarket chains are also closing stores for various reasons, but operational pressure is undoubtedly one of the biggest.

According to incomplete statistics from Lianshang.com, in the first quarter of 2024, at least 31 supermarkets nationwide closed, involving well-known brands like Walmart, RT-Mart, Yonghui, Wumart, Rainbow, Hema, and Lotus.

Fudi's "failure" warns all enterprises pursuing "large-scale expansion": blind expansion not only fails to bring "scale effects" but may accelerate a company's decline.

Xinglong Family

From Northeast Glory to Bankruptcy Liquidation

A court announcement brought down the curtain on Xinglong Family Commercial Group, Liaoning Province's most prestigious private enterprise. After a three-year difficult restructuring, Xinglong Family declared bankruptcy.

On November 1, 2024, the National Enterprise Bankruptcy Reorganization Case Information Network published a notice from Shenyang Intermediate People's Court: On December 24, 2021, the court approved the substantive consolidated reorganization plan (draft) for Xinglong Family Commercial Group Co., Ltd. and 92 other enterprises. Due to difficulties in disposing of debtor assets and inability to execute the reorganization plan, based on the administrator's application, the court ruled on November 1, 2024, under Article 93, Paragraph 1 of the Enterprise Bankruptcy Law of the People's Republic of China: 1. Terminate the execution of the substantive consolidated reorganization plan for Xinglong Family Commercial Group Co., Ltd. and 92 other enterprises; 2. Declare bankruptcy for Xinglong Family Commercial Group Co., Ltd. and 92 other enterprises.

A local retail brand, thriving in the 1990s, rapidly expanded from northeastern cities like Shenyang and Harbin, becoming a leader in local supermarkets.

At that time, with its unique business philosophy and localized services, Xinglong Family quickly broke the market barriers of "domestic supermarkets" and became a favorite among northeastern consumers.

Unfortunately, as the market changed, this "local hero" began to struggle.

Xinglong Family's expansion path gradually fell into the dilemma of "local limitations." The northeastern economy slowed, the consumer market became saturated, and the brand still tried to increase market share through large-scale offline store openings, ignoring the strategic direction of "nationalization."

Moreover, after the rise of internet retail, Xinglong Family failed to adjust its strategy in time, lacking an online presence, making it less attractive in the competitive market.

More fatally, its management underwent several changes, leading to serious decision-making errors and a lack of execution. Eventually, the capital chain broke, and the brand declared bankruptcy liquidation.

Analyzing its success and failure, there are many lessons to learn.

Over-reliance on local markets: Xinglong Family initially positioned itself as a supermarket brand meeting local consumer needs, which brought success for a period. However, as China's retail market nationalized, Xinglong Family failed to expand nationwide, gradually losing its competitive edge.

Failure to adapt to changing consumer demands: Consumer shopping habits changed dramatically, with the rise of online retail and younger generations' changing demands for lifestyle, brands, and product categories, which Xinglong Family failed to notice. The brand did not effectively adjust product mix, store design, or customer experience, leading to customer loss.

Capital chain break and frequent management changes: Xinglong Family faced tight capital chains and frequent management changes amid intense market competition.

These issues directly affected the company's ability to continue operations, ultimately leading to bankruptcy.

Ganyuting Supermarket Suddenly Closes

Reported Owing Millions in Supplier Payments

In October this year, "Ganyuting" supermarket was reported to have suddenly closed.

It is understood that Ganyuting, operating for many years, is a well-known supermarket chain in Ji'an City, Jiangxi Province, with dozens of stores in the urban area and branches in various counties.

According to Dushi Xianchang, on October 31, at the "Ganyuting" supermarket on Zhongshan Road, Jizhou District, Ji'an, the door was locked, with many people gathered outside. Consumer Mr. Xiong told reporters that the store had seen panic buying in the past few days, but closed on October 30.

Some suppliers believe that physical stores have indeed been difficult in recent years. "Ganyuting" had converted some stores into fruit and snack parks in the past two years, mainly selling fruits and snacks, but this reform seems unsuccessful.

A Ganyuting employee said they had not been paid for three months, causing great life pressure.

Currently, suppliers and consumers have reported to relevant departments, and local government has intervened in the investigation.

According to "Qichacha" information, Ji'an Ganyuting Supermarket Co., Ltd. has a registered capital of 10 million yuan, with legal representative Guo Jianxi holding 100% shares.

On June 18 this year, Ji'an Ganyuting Supermarket Co., Ltd. underwent changes in legal representative and equity. Before the change, the legal representative was Luo Jingting; after, it was Guo Jianxi. Before the change, the investor was Ji'an Ganyuting Commercial and Trade Co., Ltd., with a contribution of 10 million yuan, accounting for 100%; after, the investor was Guo Jianxi, with a contribution of 10 million yuan, accounting for 100%.

The previous investor, Ji'an Ganyuting Commercial and Trade Co., Ltd., was established in 2000, with legal representative Wan Yizhong holding 51% shares and shareholder Luo Jingting holding 49%.

These four cases remind retail enterprises that in a rapidly changing market environment, they must maintain keen market insight, keep up with consumer demand changes, avoid over-reliance on a single business model, and pay attention to cash flow.

The commonality of these enterprises is ignoring market changes and failing to make timely strategic adjustments.

For today's retail enterprises, flexible strategy adjustment, enhanced consumer experience, optimized supply chain management, and innovation and adaptation to new technological changes are the keys to success. Those that cannot transform in time and detach from actual needs will only become history's passersby.