---
title: "Over 80% of Retail Enterprises Are Not Profitable: Is Offline Retail Coming to an End?"
description: "In recent years, the challenges facing offline retail have become common knowledge. The model of waiting for customers to come is no longer sustainable, and news of store closures, adjustments, and business transformations is everywhere. As the year draws to a close, how have retail enterprises performed this year? The author reviewed the first three quarters' financial reports of 24 listed retail companies. The results are not optimistic: only 2 companies achieved growth in both revenue and profit; when compared with the same period in 2024, only 1 company achieved consecutive growth. Only 2 companies saw double growth—where did the foot traffic go? Comparing 2025 with 2024 data, among the 24..."
author: "赵胜男"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-11-21"
categories: "Capital, Earnings & M&A, E-commerce & Instant Retail"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/PVN11xH8MJDXYPC_QeVcqw"
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citation: "赵胜男. “Over 80% of Retail Enterprises Are Not Profitable: Is Offline Retail Coming to an End?.” New Distribution, 2025-11-21. https://xinjignxiao.com/en/articles/over-80-of-retail-enterprises-are-not-profitable-is-offline-retail-comin-1933aa2a/"
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---

# Over 80% of Retail Enterprises Are Not Profitable: Is Offline Retail Coming to an End?

> In recent years, the challenges facing offline retail have become common knowledge. The model of waiting for customers to come is no longer sustainable, and news of store closures, adjustments, and business transformations is everywhere. As the year draws to a close, how have retail enterprises performed this year? The author reviewed the first three quarters' financial reports of 24 listed retail companies. The results are not optimistic: only 2 companies achieved growth in both revenue and profit; when compared with the same period in 2024, only 1 company achieved consecutive growth. Only 2 companies saw double growth—where did the foot traffic go? Comparing 2025 with 2024 data, among the 24...

In recent years, the challenges facing offline retail have become common knowledge. The model of waiting for customers to come is no longer sustainable, and news of store closures, adjustments, and business transformations is everywhere.
As the year draws to a close, how have retail enterprises performed this year? The author reviewed the first three quarters' financial reports of 24 listed retail companies. The results are not optimistic: only 2 companies achieved growth in both revenue and profit; when compared with the same period in 2024, only 1 company achieved consecutive growth.
Only 2 companies saw double growth—where did the foot traffic go?
Comparing 2025 with 2024 data, among the 24 major listed retail enterprises, **18 companies saw revenue decline year-on-year**, and **19 companies saw profit shrink**. This scale of collective retreat is a shock to the entire industry.
Why is it so difficult for traditional offline retail enterprises to develop?
Our time and wallets are flowing to different new battlefields!
On one hand, there is online.
In 2025, the instant retail battlefield has upgraded from pure price subsidies to a comprehensive competition of technology, ecosystem, and fulfillment capabilities. Meituan launched "Meituan Flash Purchase" to leverage its delivery network advantages; Alibaba integrated Ele.me and Taobao Flash Purchase, attempting to close the loop between "far-field e-commerce" and "near-field services"; JD.com, with its "Seconds Delivery" service, achieved delivery in as fast as 9 minutes in some regions.
Behind this battle is the complete refresh of consumers' perception of "speed"—"minute-level fulfillment" is becoming the standard. It is estimated that the instant retail market will reach 1.4 trillion yuan in 2025, with a compound annual growth rate of 25% over the next five years.
According to the Star Map Data report, during the 2025 "Double 11" shopping festival, instant retail sales reached 67 billion yuan, a year-on-year increase of 138.4%, far outpacing comprehensive e-commerce.
Although the growth rate of comprehensive e-commerce is not as high as instant retail, its base remains. This year's Double 11 comprehensive e-commerce total sales were 1,619.1 billion yuan, a year-on-year increase of 12.3%. With user growth slowing, competition for existing market share among platforms has intensified.
Tmall Taobao positioned the 2025 "Double 11" as the "first major promotion with full AI implementation," using AI to optimize search and recommendation precision; JD.com continued to strengthen its supply chain advantages, with AI large models applied in over 1,800 scenarios.
On the other hand, new offline formats are also not to be outdone. (Note: The 24 enterprises counted in this article are all listed retail companies. Currently, most new formats are not listed, so they are not included in the statistical table.)
Sam's Club, which attracts customers with quality, saw sales approach 100 billion yuan in 2024. Local membership stores imitating its model have also emerged, such as Wushang Group's "WS Jiangtun Membership Store," which benchmarks against Sam's Club. It innovates based on local needs, even creating a hot scene where some products were restocked 6 times in 4 hours.
Hema, a representative of local new retail, has pioneered another path. With fresh food as the core, it deeply integrates online and offline experiences, offering "half-hour delivery" instant delivery services. As of October 2025, the two main formats (Hema Fresh + Super Box NB) have over **700 stores**, with GMV exceeding **75 billion yuan** in fiscal year 2025 (April 2024-March 2025), achieving full-year profitability.
These formats are continuously diverting foot traffic from traditional retail, but this does not mean the entire industry has lost hope. In the first three quarters of 2025, when the industry was under pressure, 4 of the 24 representative enterprises still achieved profit growth, and 2 enterprises withstood the pressure to achieve double growth in revenue and profit against the trend.
What did the enterprises that achieved growth do right?
  * Dongbai Group performed steadily, with revenue in the first three quarters growing 2.34% year-on-year, and net profit attributable to shareholders of listed companies growing 3.04%.
  * Wanchen Group stood out, with revenue growing 77.37% and net profit soaring 917.04%.
Why were these two enterprises able to achieve double growth in revenue and profit?
Let's start with Wanchen Group. While many peers declined for years, Wanchen Group achieved consecutive growth against the trend. Looking back at last year, its first three quarters report was also impressive, with revenue growth of 320.63% and profit growth of 248.64%.
According to the financial report, its growth is mainly due to the continued development of the bulk snack business. This business generated cumulative revenue of 36.158 billion yuan from January to September, with net profit of 1.595 billion yuan (or 1.693 billion yuan after adding back share-based payment expenses).
The bulk snack model is one of the new formats mentioned earlier, meeting current consumer demand for high cost-performance and convenience. Wanchen Group seized a major trend.
In addition, the year-on-year increase in edible fungus market prices also contributed to profit growth.
Beyond business growth, Wanchen Group's financial management has also been effective. The net cash flow from operating activities increased by 144.92% year-on-year, indicating healthy cash flow and enhanced sales collection capabilities. The financial report shows that the company controlled costs by optimizing warehouse usage rights assets and reducing lease liabilities, thereby improving profit margins. At the same time, financial returns from idle funds and other income, such as government subsidies, further increased profits.
It can be seen that Wanchen Group's sustained growth is not accidental, but the inevitable result of the combined effect of its core business engine and lean financial management capabilities.
On one hand, the company accurately grasps consumer trends and relies on the high-growth track of **bulk snacks** to achieve rapid scale growth. On the other hand, its excellent **financial control** capabilities effectively convert revenue into profit, continuously consolidating the quality of growth through cost control, capital efficiency, and cash flow management.
Now let's talk about Dongbai Group. Its growth is relatively steady.
According to the financial report, Dongbai Group improved in both business segments: commercial retail and real estate. The net cash flow from operating activities increased significantly by 165.89% year-on-year, mainly due to an increase of 222 million yuan in cash flow from commercial retail and 45 million yuan from real estate, providing stable income support for overall performance.
Dongbai Group also holds investment properties and conducts property leasing business. The third-quarter report shows that the gross profit margin of the property leasing business was 49.25%, contributing 56.0244 million yuan in operating revenue.
From an industry perspective, although these two enterprises are in different retail sub-tracks, both have captured consumer demand.
The main businesses of Wanchen Group and Dongbai Group both revolve around efficiency improvement and consumer demand.
  * Wanchen Group focuses on the bulk snack track, leveraging extreme low-price strategies to seize the "hard discount" trend. Through scale expansion and supply chain integration, it quickly rose to the top tier in a high-growth segment.
  * Dongbai Group relies on community commerce and outlet formats, leveraging the resilience of essential consumption and the stability of regional commerce. Through scenario-based experiences and refined operations, it achieved steady growth against the trend.
There is no shortcut in transformation; it is an endurance race.
Offline retail is not without hope, but it is on a challenging transformation path that requires capturing consumer demand.
Are the enterprises with consecutive performance declines lacking agility?
Actually, that is not the case. Facing multiple pressures such as drastic changes in consumption habits, online diversion, and high operating costs, most retail enterprises have not sat idly by.
Since this year, "adjustment and reform," "scenario innovation," and "small but refined, community-oriented" have become the collective direction of industry exploration.
1. Adjustment and Reform
Current retail transformation has surpassed superficial store renovations and entered a value reconstruction centered on "people"—shifting from space operation to user operation, carrying out systematic and deep-level model changes.
In systematic adjustment, the Pangdonglai model has become an important reference. Currently, more than 20 retail systems nationwide have participated in "Pangdonglai-style reforms," such as Yonghui, Bubugao, Wumart, Zhongbai, and others.
Under the background of judicial reorganization and strategic focus, Bubugao implemented Pangdonglai-style adjustments to existing stores. The 19 pilot stores became growth engines: sales achieved 3-6 times year-on-year growth, and foot traffic increased by over 300%. The company also launched its own brand "BL," pushing the gross profit margin of fresh food categories to 22%, significantly higher than the industry average.
Yonghui Superstores promoted adjustments nationwide, focusing on strengthening "product centralization" capabilities. Adjusted stores saw an average foot traffic increase of 80%, and over 60% of steady-state stores achieved record profitability. The company aims to cultivate 100 core products with sales exceeding 100 million yuan within three years, and reshape transparent and healthy supplier relationships through supply chain anti-corruption mechanisms.
2. Scenario Innovation
Many department stores are striving to transform from single shopping venues into urban life showcases that integrate social, cultural, and entertainment functions.
For example, Wangfujing's transformation strategy is particularly clear: **one store, one policy**. It transformed the historic Friendship Store into a block restoring old-style scenes, attracting young people to check in. During trial operation, total sales reached **150 million yuan**, a year-on-year increase of hundreds of times.
Wangfujing Joy Center focuses on potential themes such as two-dimensional culture and independent main brand stores, successfully transforming into a new national trend shopping destination. Center data shows that the current daily average foot traffic is nearly 50,000, and on weekends it stably exceeds 60,000.
These single-point transformations and innovations have achieved impressive results, which strongly contrasts with the overall profit decline.
A large part of the disconnect is that the successful adjusted stores widely reported by the media are often "model rooms" built with concentrated superior resources. Taking Yonghui as an example, although more than half of the adjusted stores nationwide have entered a stable profit stage, its overall performance is still dragged down by a large number of unadjusted stores and historical burdens. Quickly replicating single-point success to all stores remains the biggest challenge.
From a financial perspective, transformation costs are high. For example, Yonghui closed 227 loss-making stores in the first half of 2025 while promoting store adjustments, resulting in compensation, asset write-offs, new equipment investments, and other expenses that severely eroded profits in the short term, leading to pressure on financial reports.
The transformation efforts of most enterprises will take longer to yield solid and stable returns.
Although the revenue and profit data of enterprises such as Yonghui and Wangfujing are still under pressure, the results of their adjusted stores in foot traffic and sales prove that the direction is correct. Whether they can thoroughly transform and endure the time is the key to the future.


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## Citation metadata

- Publisher: New Distribution
- Author: 赵胜男
- Published: 2025-11-21
- Canonical: https://xinjignxiao.com/en/articles/over-80-of-retail-enterprises-are-not-profitable-is-offline-retail-comin-1933aa2a/
- Original source: https://mp.weixin.qq.com/s/PVN11xH8MJDXYPC_QeVcqw

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