Source | Ling Shou Supermarket financial reports are not optimistic A review of 2024 financial reports from listed supermarkets shows that declines in both revenue and profit have become the industry norm. According to statistics from the author, among 11 listed supermarket chains—including Yonghui Superstores, Zhongbai Group, Lianhua Supermarket, Better Life, Jiajiayue, Hongqi Chain, Sanjiang Shopping, Guoguang Chain, Liqun Group, Sun Art Retail, and *ST Renle—8 saw year-on-year revenue declines. Specifically, Sun Art Retail's situation is particularly difficult. Its revenue fell by 13.3%, and net profit plummeted from a profit of 78 million yuan last year to a loss of 1.668 billion yuan. Reasons such as closing stores to stop losses, the retreat of supply guarantee business, and weak consumption may be sufficient, but the results are not ideal. Yonghui Superstores also failed to reverse its decline, with losses widening to 1.639 billion yuan in 2024. Zhongbai Group fell into a deeper quagmire, with revenue down 10.81% to 10.4 billion yuan, net loss expanding to 528 million yuan, gross margin declining, and debt ratio soaring to 82.91%, significantly increasing risk levels. *ST Renle's situation is even more extreme, with revenue nearly halved, and the consequences of large-scale store closures directly reflected in a sharp drop in revenue. Even in such a severe industry environment, some profitable companies are also facing the dilemma of "increasing revenue without increasing profit." Guoguang Chain's revenue growth of over 11% looks impressive, but net profit plummeted by over 80% to just 2.67 million yuan, and after deducting non-recurring items, it lost tens of millions, falling into a situation of "cheering for nothing"; Jiajiayue saw slight revenue growth but declining net profit. Sanjiang Shopping's revenue slightly decreased, and its non-recurring net profit also showed a downward trend. These phenomena all indicate that the overall profitability of the industry's main business is weakening, and making money is becoming increasingly difficult. But there are also a few bright spots. Better Life is undoubtedly the biggest "surprise" of this earnings season. Not only did it miraculously turn around in 2024 (net profit of 1.227 billion yuan, a year-on-year surge of 165.18%), but its performance in the first quarter of 2025 was even more astonishing, with net profit soaring nearly fivefold year-on-year. Although there are special factors such as debt restructuring, the significant improvement in its subsequent operations, especially store adjustments, has been a key driver. Hongqi Chain, relying on deep cultivation of the Southwest market and refined operations, has exceeded 10 billion yuan in revenue for three consecutive years, with stable profits and continuous dividends, demonstrating strong resilience. In addition, although Lianhua Supermarket and *ST Renle are still in a loss-making state, their losses have narrowed significantly, showing initial results in "stopping the bleeding." These phenomena send a clear signal: the industry's major reshuffle is accelerating, and companies with extensive management are facing the risk of being eliminated by the market. The Matthew effect is intensifying; only those enterprises that dare to undergo profound self-revolution, find the right direction, and possess strong execution can hope to survive this brutal elimination game. With performance pressure clearly visible, the first reaction of companies is naturally to close stores to stop losses and adjust store operations. This has become the most direct and common "standard action," a survival instinct. Close stores! Adjust! As listed supermarkets' financial reports continue to decline and survival pressure increases, "survival" has become a common consensus in the industry. As a result, closing loss-making stores and adjusting store operations have become realistic choices for most supermarkets. These measures are not only necessary means to cope with short-term losses but also reflect the deep-seated transformation difficulties of the industry. In recent years, many supermarkets have chosen to close loss-making stores or reduce the frequency of new store openings, which is undoubtedly a painful but necessary "amputation to survive." Some listed supermarkets have closed hundreds of stores in a year, while others have closed dozens. Behind this wave of store closures is a clear logic of "cutting off and letting go"—eliminating the "negative assets" that continue to bleed and concentrating limited resources on positions that can fight and have hope. Has it been effective? Yes. The narrowing of losses at Lianhua and *ST Renle is largely due to this. For companies burdened with heavy historical baggage, shedding some loss-making stores can at least alleviate financial pressure and buy valuable time and space for subsequent adjustments. But it must be clearly recognized that closing stores is only "stopping the bleeding," far from "creating blood." The resulting revenue contraction is an inevitable cost, as *ST Renle is a living example. If the operational efficiency of existing stores cannot be fundamentally improved, the road after closing stores may become even more rugged. Store closures are more about paving the way for the next deep reform—store adjustments. The wave of store adjustments has also followed, especially learning from the "Pangdonglai" model, which has almost become an industry phenomenon. From service details and product displays to management models and employee incentives, there has been an endless stream of "pilgrims" seeking knowledge. Better Life has continued to advance store adjustments, with some stores seeing improved sales and customer traffic in 2024 and early 2025. The company officially stated that store adjustments involve multiple levels such as products, supply chain, services, and incentives, and the effects have initially shown in some stores. In addition to Better Life, other companies are also actively promoting store adjustments. Yonghui Superstores completed the renovation of 31 stores, but due to the company's large scale, the effectiveness of store adjustments in the short term is still affected by various factors. Zhongbai Group has adopted a strategy of independent adjustments and multi-format development, actively laying out new formats such as convenience stores and community canteens, attempting to build a diversified community business ecosystem. Sun Art Retail has transformed some closed hypermarkets into M membership stores, hoping to explore new growth points through new formats. Although membership stores currently contribute limited revenue, the company's attempts in new tracks have accumulated experience for future transformation. Of course, if adjustments remain superficial and do not delve into optimizing product structure, improving supply chain efficiency, and organizational management reform, then adjustments are likely to be a "flash in the pan." For industry giants like Sun Art, Yonghui, and Zhongbai, transformation is a complex systematic project, and store closures and adjustments are only part of it. To truly achieve "strengthening the body" and reshaping competitiveness, a longer period of pain and deeper self-revolution is inevitable. "Product Power" and "Operational Efficiency" Closing stores to stop losses and adjusting store operations are just basic actions for the supermarket industry to cope with pressure. The "second half" that truly determines the future direction of enterprises has arrived, with two core points: product power and operational efficiency. Product power is the top priority. The days of relying on brand suppliers and acting as a "channel platform" to make easy money are completely over. With highly homogeneous shelves and abundant online and offline choices, consumers need a reason to buy your products. That reason can only be: you have to offer something real—either exclusive products that others don't have, or quality products at prices that tempt consumers. Therefore, private labels have been pushed to the forefront of this product power revolution, becoming a key chess piece for various companies. The logic is clear: define products yourself, bypass intermediate links, and achieve both differentiation and higher profits. Looking at various actions, Better Life uses its "BL" private label as a lever, focusing on a high-quality-price ratio strategy, combined with global direct sourcing and supply chain optimization. Some private label products, such as edible raw eggs, have already achieved rapid volume growth. Yonghui has proposed creating "100 million-yuan single products," deeply incubating with suppliers, intending to form a private label matrix through scale effects and supply chain binding. Zhongbai Group focuses on developing "star products" and "fortress products," and continues to strengthen its traditional advantages in fresh food processing to enhance product appeal. But making private labels successful is no easy task, and the pitfalls are deep. Many retail industry insiders have commented that this is an ultimate test of a company's comprehensive strength. How many so-called "private labels" in the market are just repackaged products from low-end OEM factories? This kind of "fake private label" has limited effect on improving brand image and cultivating customer loyalty, except for temporarily lowering prices. What's more critical is the supply chain, which is the real lifeline of private labels, and not all companies can handle it. Product selection, R&D, quality control, inventory, logistics... any problem in any link can lead to disaster. This requires strong integration and management capabilities, continuous investment, and professional accumulation. In addition, product differentiation also faces challenges. The industry imitates quickly, and companies must continuously innovate and increase R&D and brand investment to maintain the uniqueness and appeal of their private labels. But having good products is not enough; if operational efficiency doesn't keep up, it's useless. With rising rents and labor costs and razor-thin industry profits, high efficiency is the lifeline of a company and the foundation of profitability. This means meticulous management in every link, including cost control, process optimization, and inventory turnover, squeezing profits from every corner. Efficiency improvement is a systematic project. Better Life has improved per-store efficiency by closing inefficient stores and focusing on core business districts, while also strictly controlling costs in procurement and energy consumption, with some stores seeing per-store efficiency improvements of over 40%. Sanjiang Shopping has increased digital investment, using systematic reforms to improve store management and inventory turnover efficiency. In summary, the competitive landscape of China's supermarket industry has completely changed. Scale expansion and channel dividends are things of the past, and product power and operational efficiency have become the core variables determining the survival of enterprises. The market reshuffle is accelerating, and only those companies that can continuously create unique products, deeply cultivate private labels, and achieve extreme operational efficiency can secure a place in the fierce market competition. Winter has arrived, and the future belongs to those "doers" who truly return to the essence of retail and diligently hone their skills.