In recent years, Pangdonglai has gained increasing fame, with many companies taking it as a model to learn from, and some teams even organizing "Xuchang Pangdonglai Business Myth Study Tours" to visit and learn. However, few have explored the fact that Pangdonglai also has its own learning targets. For instance, on the signboard at the entrance of its stores, among the list of companies it "wants to learn from," the Japanese supermarket brand Ito Yokado is included. Notably, Pangdonglai not only claims to "want to learn" but also, a decade ago, visited the Chengdu Ito Yokado headquarters with media, and later went to Japan, Ito Yokado's home base, for on-site visits. Unfortunately, times have changed: Pangdonglai has grown stronger, not only solidifying its position in Henan but also making strides online, while Ito Yokado has been suffering continuous losses and has even been embroiled in rumors of being "sold off," making its future prospects truly bleak. From being an industry "mentor" to facing a worrying outlook, what exactly has Ito Yokado gone through? Times Have Changed Earlier, multiple domestic media outlets and insiders reported that Ito Yokado's parent company, Japanese 7&i Holdings, was considering restructuring its supermarket division and might sell Ito to an investment fund. In fact, similar rumors circulated last year as well. Similar to last year, the company quickly denied the rumors, emphasizing that the sale rumors were "untrue." Despite repeated official denials, why have outsiders not stopped speculating about Ito Yokado's future? The reason is simple: its development situation is hardly optimistic. According to media reports, starting in 2014, Ito Yokado suffered losses for five consecutive years, briefly returned to profitability in 2019, but fell back into the "quagmire" of losses the following year. By 2023, Ito Yokado had accumulated losses exceeding 250 billion yen (approximately 11.9 billion RMB). Continuous losses naturally lead to investor dissatisfaction, and their counterattack is to "vote with their feet." In simple terms, some shareholders, including U.S. funds, submitted a "letter of inquiry" listing nine questions, expressing "confusion and disappointment" with the supermarket reform, and demanding withdrawal and sale of the Ito Yokado business, meaning they do not want to be dragged down by this "low-return, underperforming" asset and want to divest. Regarding how to increase profits and achieve better market performance, Ito Yokado has not found a better solution, but there is one strategy that can be implemented relatively quickly: closing stores to reduce costs. According to media reports, in addition to already planned store closures, Ito Yokado will close 14 more stores, bringing the total to 33 closures by February 2026, reducing its store count from the current 126 to 93. From the above, it can be seen that from 2014 to the upcoming 2026, Ito Yokado has mostly been contracting, but it should be noted that Ito Yokado once had a glorious history. In summary, Ito Yokado's predecessor was founded in 1920, and founder Ito Masatoshi gradually developed the Japanese GMS (General Merchandise Store) model of "supermarket + department store." In 1991, it acquired 73% of the shares of Southland Corporation, the company behind the convenience store brand "7-ELEVEN." In 1998, it ranked 33rd in the Fortune Global 500. In 2005, as convenience store business revenue exceeded that of supermarket and department store operations, Ito Yokado was renamed 7&i Holdings, which ranked 19th in Deloitte's "2022 Global Retail Power" list with revenue of $52.317 billion. Why is there such a huge disparity in the development of the supermarket business before and after? Chinese retail media "Lianshang.com" analyzed that the main reasons are three major drawbacks of Ito Yokado: First, its business content is outdated; it offers one-stop shopping from food to clothing, groceries, small appliances, etc., but new category killers have emerged in terms of style, freshness, and cost-effectiveness. Second, it no longer values consumers as much as before. Third, it lacks store personalization and comparative advantage. In the view of New Retail Business Review, the "century-old store" Ito Yokado has an aging brand, and its "people," "goods," and "place" have not been updated in line with new consumption trends. Taking "people" as an example, it is increasingly difficult to attract young consumers, which is related to the lack of novelty and strength in "goods" and "place." Furthermore, "times have changed," and it is not difficult to understand why Ito Yokado cannot keep up, suffers continuous losses, and struggles to survive. Is Chengdu Enough for Ito? For Chinese consumers, Ito Yokado mainly leaves two impressions: one is its gradual retreat from the Beijing market, and the other is its excellent performance in the Chengdu market. Regarding the former, no need for details; the fact that only one store remains in the Asian Games Village is the most powerful illustration. Regarding the latter, according to Ito Yokado's official WeChat account and Meituan-related information, there are at least 8 stores in Chengdu (plus Leshan and Meishan stores). Ito Yokado's performance in Chengdu has been praised not only by Ito's official channels but also by Chengdu locals, with netizens saying, "Ito has always been the mall with the best shopping experience for me," "Outsiders simply don't understand the bond between Chengdu people and Ito," and "As long as Ito has Chengdu, that's enough." Winning the hearts of consumers in Chengdu is also closely related to "timing" and "trends." From the perspective of "timing," Ito entered the Chinese market in 1997 and subsequently opened Ito Yokado in Chengdu. Regarding this timing, at a public speech last year, Huang Yamei, chairman of Chengdu Ito Yokado, mentioned: "When Chengdu Ito Yokado first opened, it was during the most rapid period of commercial transformation in China, an important node in the shift from traditional commerce to new business models. At that time, business models were relatively traditional, consumption content was singular, and people's consumption concepts were more price-centered and value-for-money oriented." From the perspective of "trends," Chengdu Ito Yokado rode the powerful wave of consumption upgrading in China. In the same speech, Huang Yamei also mentioned: "With economic development, improvement in people's quality of life, and changes in population structure, the middle-class consumer segment expanded rapidly, and in this process, community commerce emerged." For this reason, Ito Yokado's positioning is clear: to focus on the middle class's pursuit of a better and happier life, "so that customers who visit the store can feel novelty and pleasure, and gain a sense of fulfillment and value from shopping." Objectively speaking, Chengdu Ito Yokado has indeed successfully implemented these positioning strategies to a large extent, winning the favor of a large number of Chengdu consumers. For example, Ito Yokado has a "nursing room" with ample space and good privacy, which consumers have praised as "the best nursing room in Chengdu." Because of such attention to service details, in 2015, Ito Yokado topped the list of "shopping centers or malls most favored by female respondents" with a 15.2% vote share. However, with changes in timing and trends, even in Chengdu, Ito Yokado is beginning to struggle. As mentioned earlier, the "supermarket + department store" model finds it difficult to attract young consumers, with a large number of young shoppers flocking to Taikoo Li and IFS. The business district where Ito Yokado is located is not the most desirable or preferred place for these shoppers to spend. More direct data comes from the "2023 Performance List of Major Commercial Complexes and Shopping Centers in Chengdu" released by the Sichuan Chain Business Association on March 11. The list shows that Taikoo Li and IFS both achieved sales exceeding 10 billion yuan, far ahead among major commercial complexes in Chengdu. The Sichuan Chain Business Association also mentioned that in 2023, Chengdu saw 24 commercial projects enter the market, with a total area exceeding 1.5 million square meters, "especially the rise of non-standard commercial formats dominated by domestic trendy brands, owner-operated stores, buyer-style brands, and curation-based business models." In other words, store personalization is a major hotspot in the Chengdu retail market. Combining these factors, compared to its home base in Japan, Ito Yokado's performance in Chengdu is acceptable, but its drawbacks and crises cannot be underestimated. That is to say, the so-called "As long as Ito has Chengdu, that's enough" is merely a wishful thinking with rose-colored glasses. Need to Enhance Single-Store Personalization The huge disparity in Ito Yokado's development indicates that relying on chain advantages and the "supermarket + department store" integrated format can no longer sustain consumer appeal. As analyzed by "Zhichi Study Tour": "Supermarkets used to focus on operational efficiency through chain management, but now they emphasize stores that fit customer and regional characteristics, returning from large supermarkets to small stores, from standardization to personalization, which in a sense is a trend of 'returning to the origin.'" In the view of "Zhichi Study Tour," the key is to build stores based on regional characteristics, strengthen single-store personalization, and directly address the shopping and lifestyle needs of consumers in the store's location. Among these, Ito Yokado's Japanese counterpart LIFE supermarket is a pioneer. After shifting to a regional personalization route, LIFE supermarket places more emphasis on "being close to the local area," with diverse store formats such as large general supermarkets, composite supermarkets combined with clothing stores, food-focused supermarkets, and small stores in city centers, to meet the differentiated needs of consumers. For this reason, while Ito is struggling in the "quagmire" of losses, LIFE supermarket's retail sales from March to November 2023 were 580.4 billion yen (approximately 27.667 billion RMB), with a profit of 19.5 billion yen and a profit margin of 3.4%. Is it that Ito Yokado's executives do not recognize the importance of store personalization? In fact, Ito's official stance has encouraged store personalization, hoping that each store can maximize consumer satisfaction and thus achieve maximum results. But such a critical transformation cannot be realized just by official encouragement, especially since Ito's traditional decision-making mechanism is driven by headquarters centralization, with a strong bureaucratic atmosphere, making it difficult to respond quickly. On the other hand, single-store personalization requires both management granularity and execution efficiency, and for the slow-moving Ito Yokado, the difficulty of advancing and achieving this is self-evident. Not to mention single-store personalization, even focusing on food was something Ito delayed until it could no longer be postponed. According to the Urban Industry Power Research Institute, over the past 30 years, food has further solidified its pillar role in supermarket retail. In 1989, food sales accounted for 42% of large supermarket merchandise sales in Japan, and by 2022, this proportion had increased to 80%, while clothing sales fell from 32% in 1989 to 5%. However, it was not until March 2023 that 7&i Holdings announced it would exit the clothing business, expecting to further focus on investing in food and convenience store operations. From the above behavior, whether it is 7&i Holdings or Ito Yokado, they may have seen the consumption situation clearly and understood some of the problems, but whether they can adjust quickly and follow the trend is another matter. Back then, when Pangdonglai's team visited the Chengdu Ito Yokado headquarters, a slogan in the office area caught the eye: "Respond to changes and uphold the basics." Now, how to respond to new changes and uphold new "basics" has become the biggest challenge for this "century-old store," and Ito Yokado can no longer avoid it. Recommended Reading