Source | Yilan Business Adjustments are still ongoing. According to data from the National Bureau of Statistics, from January to June this year, total retail sales of consumer goods reached 24.55 trillion yuan, a year-on-year increase of 5.0%, slightly higher than the 3.7% growth rate in the same period last year. Among this, national online retail sales reached 7.43 trillion yuan, up 8.5% year-on-year. Based on this calculation, national offline retail sales reached 17.12 trillion yuan, up 3.75% year-on-year, slightly lower than the overall market growth rate. The pressure of slowing growth has also transmitted to frontline individual merchants. According to incomplete statistics by the author, in the first half of 2025, at least 17,100 stores in China announced closures, involving more than 100 companies, including large channel stores such as Walmart, Yonghui Superstores, and China Resources Vanguard, as well as leading chain restaurant brands like Starbucks, Pizza Hut, and Haidilao. By industry, the supermarket sector closed at least 720 stores, department stores closed 17, restaurants closed nearly 10,000, the apparel industry closed nearly 5,000 stores, and other formats such as bookstores and cinemas closed over 4,000. Supermarket Elimination Race Accelerates According to incomplete statistics by the author, in the first half of 2025, at least 720 supermarkets nationwide closed, including national and global brands such as Lotus, China Resources Vanguard, Yonghui Superstores, and RT-Mart, as well as regional brands like Dili Fresh and Yuelihui Supermarket. From the external environment, e-commerce continues to divert traffic. Online retail sales grew 8.5% year-on-year, significantly higher than the offline growth rate of 3.75%, indicating that consumer shopping habits are shifting online. Especially for standardized goods such as daily necessities and grain and oil, online selection and home delivery have become the norm. The rise of instant retail has further impacted the survival foundation of supermarkets. First, the geographical location moat centered on proximity; second, the consumer mindset of "one-stop shopping." According to the National Bureau of Statistics and the Ministry of Commerce Research Institute, the overall scale of the non-food instant retail market climbed from 36.6 billion yuan in 2017 to 650 billion yuan in 2023. It is expected that in 2024, this scale will account for 6.0% of online retail sales of physical goods, with a market growth rate of 20.0%. In addition, new channels such as bulk snack stores and brand discount stores are expanding rapidly, leveraging focused categories, flexible supply chains, and high cost-performance. According to Zhiyan Consulting, the scale of the snack bulk retail market in China reached 104.59 billion yuan in 2024, becoming the fastest-growing snack channel, further squeezing the living space of traditional supermarkets. From internal factors, traditional supermarkets face the dual pressure of aging hardware and expiring leases. Many stores have been operating for over ten years, with outdated facilities and poor traffic flow, making it difficult to attract young customers; and 15-20 year property leases are expiring one after another. Faced with high rents and maintenance costs, many companies choose not to renew. In response, major supermarkets have also clarified their adjustment directions. First, close inefficient loss-making stores in non-core areas, renovate remaining stores, and simultaneously open online businesses. For example, in the first half of the year, Zhongbai completed renovations of 14 warehouse-format stores and 55 community supermarket stores, with customer traffic increasing by 9% and 6% respectively; Yonghui Superstores renovated and opened a total of 124 stores, of which 99 renovated stores have opened online businesses; Jiajiayue completed the renovation and upgrade of 30 stores in the first half of the year. Second, focus on format innovation and transformation, laying out hard discount stores and small and medium-sized community stores. Zhongbai Group is laying out hard discount stores, with its first Xiaobaihui discount store and a new generation food supermarket opening at the end of June; Lianhua Supermarket is actively incubating discount formats in the Zhejiang region, with 13 stores already opened, covering multiple urban areas in Zhejiang; Hema also closed all its warehouse membership supermarket formats this year, focusing on Hema Fresh and Chaohe Suan NB formats. The supermarket industry is in a period of deep adjustment. The traditional hypermarket model is unable to adapt to consumption changes, and the industry's focus is shifting from scale expansion to efficiency improvement. In the short term, store closures will continue, but in the long term, it is conducive to the healthy development of the industry. Old Department Stores Exit Data from January to June 2024 on total retail sales of consumer goods shows that the total retail sales of department stores increased by 1.2% year-on-year, compared to a decline of 3% in the same period last year. It has improved significantly, but still lags behind the overall market. According to incomplete statistics by the author, in the first half of 2025, at least 23 department stores and shopping centers nationwide closed. Among the closed stores, the longest-operating was Changsha Apollo Commercial Plaza, a department store opened in 1998, which had been operating for 27 years; the shortest-operating was Chengdu Youke Aolai Kehua Store, which closed after only one year of operation. On the surface, closures are due to lease expiration or strategic adjustments, such as Tianhong Beijing Guozhan Store and Dalian Dashang Maikailai, but the fundamental reason lies in the outdated traditional department store model and declining attractiveness. Yuan Shuai, executive vice president of the Agricultural, Cultural and Tourism Industry Revitalization Research Institute, once said that department stores are facing a cold snap related to outdated business models. Since the 1990s, department stores in China have adopted the "brand joint venture" model, where brand owners control the purchase, sales, and inventory processes. But department stores do not control goods, inventory, or pricing; they are essentially commercial real estate operators rather than retailers. This leads to an inability to quickly adjust product mixes based on market changes and an inability to establish unique product competitiveness. At the same time, shopping centers drive the development of retail formats through experiential formats such as dining, entertainment, and children's activities. Traditional department stores have a single format and lack effective traffic-generation methods, leading to a continuous decline in natural foot traffic. Many well-known brands, to maintain their image and price system, tend to open independent flagship stores or enter shopping centers with higher positioning. The attractiveness of department stores as a channel declines, high-quality brand resources are lost, further exacerbating the decline in foot traffic, forming a negative cycle. The success of Nanjing Deji Plaza provides a transformation model. By introducing scarce brands such as BURBERRY's global first store and Cartier's Asian first store, turning restrooms into check-in points, holding art exhibitions, building a two-dimensional (anime) district, and providing membership customization services, Deji upgraded the shopping center into an experiential living space, becoming the new "global store king." The closure of old department stores is an inevitable result of model aging and competitive imbalance. Simply closing stores to stop losses cannot cure the root cause. Only by reshaping consumer appeal through product strength, scene experience, and differentiated services can they achieve rebirth. Tea and Coffee Become Hardest Hit by Closures According to incomplete statistics by the author, in the first half of 2025, at least 6,673 tea and coffee stores nationwide closed. The market is further reshuffling. Specifically, in the tea beverage industry, at least 35 brands closed 5,788 stores. Some leading brands are steadily expanding and accelerating downward penetration, racing to capture territory in lower-tier cities; while many mid-tier brands are caught in a wave of closures, with some even experiencing city-wide retreats. The industry's "survival of the fittest" process is accelerating. The brands with the most closures in the first half of this year are concentrated in the mid-tier and former internet-famous tracks. In the first half of 2025, Shuyi Xiancao net decreased by 1,049 stores, with its store scale down 18.32% from the end of last year. As a representative of the herbal jelly category, Shuyi rapidly expanded from 2019 to 2022 thanks to the franchise dividend in lower-tier markets, but its single product structure and highly overlapping price range with similar brands led to its rapid marginalization after lemon tea and fresh milk tea rose. The closure wave is not only in third- and fourth-tier cities but has also spread to some second-tier cities. Similar is Jidong Xiancao, which reduced its store scale by 389 stores in the first half of the year. Ningji Handmade Lemon Tea also ranks high in closures, with a net decrease of 404 stores in half a year, down 19.2%. As an early entrant into the lemon tea track, Ningji's advantages were diluted by many imitators after 2023; 7Fen Tian net closed 161 stores in the first half of the year, a decline of 18.63%. Chahuangnong also faced scale contraction, closing 189 stores in half a year. In addition, Yizhi Suannainiu and Mo Suannai continued the retreat trend from last year. In the first half of 2025, Yizhi Suannainiu net closed 64 stores, and Mo Suannai net closed 163 stores, down 7.59% and 15% respectively. The yogurt category briefly became popular in 2022-2023, but due to high yogurt base costs, slow production speed, and limited flavor innovation, it is difficult to support long-term scale expansion. Overall, the closure wave is concentrated in two types of brands: one is single-category brands represented by herbal jelly and yogurt, which are exiting entirely due to declining category popularity; the other is mid-tier comprehensive tea beverage brands, which are forced to shrink their positions under the dual pressure of price wars and leading brands' downward expansion. The coffee industry is slightly better than the tea beverage industry, closing 885 stores in the first half of the year. The shrinking brands are mainly concentrated in two categories: First, international brands that entered China early. For example, COSTA COFFEE shrank its store count, with a net decrease of 28 stores; Starbucks closed 11 stores in the first half of the year, including many long-established stores; Peet's Coffee also closed 4 stores within 2 months. They generally face fierce impact from local brands in terms of cost-performance and model innovation. Second, emerging vertical/premium brands in recent years, which face challenges in a market environment pursuing efficiency and scale. For example, MODA COFFEE closed at least 74 stores, and Chayanyuese's coffee sub-brand Yuanyang Coffee also closed 16 stores. The fruit coffee category representative "Benlai Buying You" net decreased by 37 stores, with its scale down 25.69% from the end of 2024. The brand once rapidly expanded to 800 stores in 2023 thanks to Douyin traffic dividends, but as giants like Luckin and Cudi aggressively entered the fruit coffee track, its disadvantages in price and quality were quickly amplified, leading to a wave of closures. Overall, the large-scale closures in the tea and coffee sector are a direct manifestation of industry reshuffling, reflecting that the market is shifting from barbaric growth to refined operations. Brands lacking core competitiveness and single-store profitability are being cleared out of the market. Large-Scale Apparel Store Closures In the first half of this year, China's total retail sales of consumer goods increased by 5.0% year-on-year, while apparel retail sales increased by 3.1%, weaker than the overall social retail market. According to incomplete statistics by the author, in the first half of 2025, at least 4,563 apparel stores nationwide closed. Among them, Semir closed the most with 629 stores, and GU closed multiple stores including its China first store and South China first store. There are three main reasons for the large-scale closures: First, high inventory forces channel optimization. Affected by fluctuations in consumer demand and product design disconnected from the market, many apparel brands have long faced inventory backlog issues. Offline stores are an important channel for inventory digestion. Once single-store sales efficiency declines and they cannot bear rent and labor costs, "closing stores to clear inventory and eliminate inefficient stores" becomes a direct choice for brands to alleviate cash flow pressure. Second, brand aging leads to customer loss. Facing the iteration of consumer groups, some traditional apparel brands have failed to keep up with the changing needs of young consumers. In product design, they still use traditional styles, lacking personalized and scenario-based designs, making it difficult to compete with emerging online designer brands and niche trendy brands; in brand marketing and communication, they have not integrated into the social context that young people care about, leading to an aging brand image, continuous decline in natural foot traffic, and loss of core attractiveness of offline stores. Third, the double-edged sword effect of the "big store model." Since last year, Semir, Youngor, Ellassay, Jinhong Group, Metersbonwe, and Peacebird have all been increasing their big store formats, with some even considering it an important strategic investment. For example, Peacebird hopes to reshape offline value through super big stores, viewing it as a strategic breakthrough under the dual squeeze of e-commerce and fast fashion; Youngor has invested over 3 billion yuan in total, fully shifting to the big store model. However, big stores require higher operating costs and pose a significant test for brand products and marketing. If single-store growth does not outpace the increase in area, brands may face the dilemma of "big stores with low efficiency." Last year, Metersbonwe founder Zhou Chengjian shouted the radical slogan "a thousand days, ten thousand stores." In August this year, Metersbonwe held a new product review and ordering meeting, claiming that 170 new partner stores had signed and landed; some opened lifestyle stores can recoup costs in 3 months, while most stores take 6-12 months. However, in the first half of 2025, Metersbonwe had 54 directly operated stores, with annualized sales per square meter of 3,793.85 yuan/square meter/year, down 58.13%. The apparel industry is shifting from pursuing store quantity to improving single-store quality. Store closures are an inevitable pain in the process of optimizing channels and improving single-store efficiency. Cinemas Face Cold Snap According to data monitoring from Beacon and Maoyan, since the beginning of this year, the national cinema vacancy rate has remained at 30%-40% for a long time. For every 10 movie screenings, there may be 3 to 4 with no audience at all. The direct consequence of high vacancy rates is the survival crisis of cinemas. According to incomplete statistics by the author, in the first half of 2025, at least 38 cinemas nationwide closed. On March 1, UME Cinema (Beijing Huaxing) announced closure. This cinema had been operating for 22 years and was the first cinema in Beijing to introduce IMAX; CGV Changsha Lushan Store, Shanghai Lumière DRC Cinema, Foshan Zhaoyang Poly International Cinema, etc., also chose to close. The reasons for the cinema dilemma come from multiple levels. First, heavy asset operation and high fixed costs. From site selection and decoration to equipment investment, the initial investment for a cinema often amounts to millions. Even during periods of low foot traffic, fixed costs such as rent, equipment maintenance, and personnel must still be borne. Old cinemas operating for many years also face issues such as aging equipment requiring updates and rent increases after lease expiration, further exacerbating cost pressure. Second, cinema revenue is highly dependent on film content and lacks stability. Thanks to "Ne Zha 2" during the Spring Festival, total box office in the first half of the year once surged to 29.2 billion yuan, a year-on-year increase of nearly 23%. But the boom was concentrated in February, with monthly box office of 16 billion yuan, accounting for over 50% of the first half total. After that, the market took a sharp downturn, with monthly box office below 2 billion yuan for four consecutive months, and June was only 1.91 billion yuan, hitting the lowest point in nearly a decade. The drastic fluctuations in box office lead to unstable cinema revenue, making it difficult to support long-term operations. Some small and medium cinemas closed due to inability to withstand losses in the off-season. Finally, with the rise of short videos, short dramas, and streaming platforms, consumer entertainment habits have undergone fundamental changes. The "2025 China Online Audiovisual Report" shows that Chinese netizens spend nearly 160 minutes a day watching short videos, with 40% of that time spent in fragmented scenarios like commuting and eating. In contrast, going to a cinema takes three hours round trip, with a ticket price of 50 yuan, making it increasingly less cost-effective. If good movies cannot be produced, it is difficult to shake the audience's wallets. This is also directly reflected in the data. Beacon Professional Edition disclosed that the number of cinemas nationwide has exceeded 13,000, setting a new record. But from March to June, the average audience per screening was only 2-4 people, with a vacancy rate as high as 40%. In the end, cinemas are becoming increasingly difficult, not due to a single problem, but due to the superposition of multiple pressures: heavy assets, high costs, box office fluctuations, audience loss, and insufficient content. Final Thoughts In addition to the above major industries, other industries also experienced varying degrees of contraction in the first half of 2025. In the pet industry, Bukaxing closed 4 stores, LOOK STAR Trendy Pet Store, Super Bird Bureau, Xinliangcang Jichong, and Leroi Pet Hotel each closed 1 store; in the home furnishing and building materials sector, Red Star Macalline closed 23 stores, Huayun Building Materials City closed 1, and Mingting Whole Decoration closed 1; in the education and training sector, Tongcheng Tongmei closed 12 stores, and regional institutions such as Haima Dream Basketball Hall and CTJ Dance Studio all had closures; the two-dimensional and trendy toy industry also began to clear out, with Trendy Toy Planet closing 13 stores, Manku closing 6, and Sanyueshou, Bandai Gashapon Specialty Store, and Leman Yougu all having closures. In the short term, the wave of store closures will continue, and some brands that cannot adapt to the new environment will exit the market. But in the long run, those physical brands that can accurately position their customer base, create unique experiences, and improve operational efficiency will gain greater development space after the reshuffle.