---
title: "The Collapse of an 8.5 Billion Retail Regional Champion: The Life-and-Death Challenge of Traditional Supermarket Transformation"
description: "Mei Te Hao, once known as the 'Retail King of Shanxi,' recently filed for bankruptcy reorganization. With 54 companies under joint reorganization, over 3,000 creditors claiming debts exceeding 5 billion yuan, and assets of 2.85 billion yuan under judicial review, the contrast is stark: while Mei Te Hao's stores close and employee placement becomes a challenge, Yonghui and Better Life have embraced 'Pang Donglai-style' transformations, seeing renewed stores and bustling traffic. Why do some supermarkets collapse after transformation, while others thrive?"
author: "张振峰"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-06-04"
categories: "Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/6xw4sHFGg4YZ1yunEsPf0g"
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citation: "张振峰. “The Collapse of an 8.5 Billion Retail Regional Champion: The Life-and-Death Challenge of Traditional Supermarket Transformation.” New Distribution, 2026-06-04. https://xinjignxiao.com/en/articles/the-collapse-of-an-8-5-billion-retail-regional-champion-the-life-and-dea-da81f339/"
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---

# The Collapse of an 8.5 Billion Retail Regional Champion: The Life-and-Death Challenge of Traditional Supermarket Transformation

> Mei Te Hao, once known as the 'Retail King of Shanxi,' recently filed for bankruptcy reorganization. With 54 companies under joint reorganization, over 3,000 creditors claiming debts exceeding 5 billion yuan, and assets of 2.85 billion yuan under judicial review, the contrast is stark: while Mei Te Hao's stores close and employee placement becomes a challenge, Yonghui and Better Life have embraced 'Pang Donglai-style' transformations, seeing renewed stores and bustling traffic. Why do some supermarkets collapse after transformation, while others thrive?

**Mei Te Hao, once the 'Retail King of Shanxi,' recently filed for bankruptcy reorganization with the court.** 54 companies are under joint reorganization, with over 3,000 creditors claiming debts exceeding 5 billion yuan, and assets of 2.85 billion yuan being re-examined under judicial scrutiny.
On one hand, Taiyuan Mei Te Hao has filed for bankruptcy reorganization, leading to store closures, restricted use of stored-value cards, and challenges in employee placement.
On the other hand, Yonghui and Better Life have raised the banner of 'Pang Donglai-style transformation,' with stores refreshed, customer traffic booming, and celebrations all around.
> Why do some supermarkets collapse after transformation, losing everything?
>
> Why do others revive with clear results?
>
> And why do some have stores packed with people, yet their recent financial reports show massive losses?
If you attribute all this to 'who imitates Pang Donglai better,' that judgment is too simplistic.
**What traditional supermarkets face today is more like a 'bone-changing surgery' of their business logic.** If the bones aren't replaced, no amount of new skin or stimulants will help. This surgery is not just about technique; it's about survival.
Today, I want to discuss three companies: Mei Te Hao, Yonghui, and Better Life. Let's see where the trillion-yuan traditional supermarket sector is stuck and where it should go.
## Mei Te Hao: The 'Old Map' Predicament of a Regional Champion
Mei Te Hao's case is a typical 'transformation trap' today. It proves that when you try to nourish a new system with the blood of the old, the result is often 'septicemia.'
### 1. Mei Te Hao Didn't Lose to Competitors, but to Inertia
What kind of company is Mei Te Hao? It's not a fly-by-night operation. Founded in 1993, it's older than many retail bosses. It has seen glory: nearly 200 stores covering Taiyuan and surrounding cities, and in 2023, it ranked first among Shanxi's top 50 retail enterprises with sales of 8.59 billion yuan.
Why did such a deeply rooted giant fall?
Because it was held hostage by its own 'success.'
Over the past 30 years, Mei Te Hao built an impeccable 'hypermarket logic': selecting locations across various suburban commercial formats, attracting customers citywide with dense store networks, offering tens of thousands of SKUs for one-stop shopping, and sustaining itself through slotting fees. This logic was invincible in an era of scarcity.
But when consumption habits changed, this logic became an 'old map.' Mei Te Hao attempted transformation by launching 'Happy Bazaar,' trying to replace old hypermarkets with food supermarkets. The idea was right, and the direction was correct.
The mistake was in the pace.
### 2. Limited Resources Stretched Between Old and New Systems
The biggest fear in retail transformation isn't not seeing the direction, but 'wanting both.'
Mei Te Hao made a fatal error during transformation: the old hypermarkets were still bleeding (rent, labor, inventory), while the new 'Happy Bazaar' was already burning cash (renovation, equipment, supply chain overhaul).
It's like a person with heart failure, and you insist on performing an 'amputation.' Both systems simultaneously drain the company's cash flow, resulting in 'old blood not stopped, new blood already dried up.'
We saw that the initial plan to open 4 stores in Taiyuan was reduced to 3, and later supplemented with 22 fresh food supermarkets.
This repeated change of plans exposed the management's extreme anxiety and lack of confidence. The organization began to hesitate, resources became scattered, and execution was greatly compromised.
### 3. Thirty Years of Trust Collapsed Overnight
At the end of 2025, Mei Te Hao filed for pre-reorganization. This is not just a legal procedure; it's the result of a collapse of trust.
Retail enterprises have three pillars: customers, suppliers, and employees.
> Customers, worried about stored-value cards becoming worthless, started panic spending or simply stopped recharging.
>
> Suppliers, worried about unpaid debts, stopped supplying or demanded cash only.
>
> Employees, worried about losing jobs, became disengaged or sought other opportunities.
When these three pillars shake simultaneously, the enterprise enters a state of 'ischemia.' The supply chain is strained, goods become unstable, and no matter how beautifully the store is renovated, if the shelves are empty, everything returns to zero.
What's more terrifying is that Mei Te Hao's system involves 54 companies, including supermarkets, agricultural products, supply chain, property, and technology services. These 54 companies are entangled through complex equity and guarantee relationships—a typical 'large group disease.'
There are plenty of assets, stores, and employees, but once the system stalls, these former advantages become heavy 'harnesses' that drag the company down and prevent it from moving.
Mei Te Hao's warning to us is: regional champions are most easily trapped by old successful experiences. Without a painful 'system format,' merely changing signs or store formats only accelerates death.
## Yonghui: The 'Expensive Surgery' That Loses More with Each Change
If Mei Te Hao died of 'old disease relapse,' then Yonghui died of 'surgical complications.'
### 1. The Slow Turn of the 'Elephant'
Yonghui is the 'national team' of Chinese supermarkets, with an unmatched scale. Its predicament reveals another cruel truth: **transformation requires huge costs, and for an 'elephant,' the cost of turning around is enough to swallow the fruits of transformation.**
Yonghui's 'Pang Donglai-style' transformation is massive. Walking into a transformed store, it's indeed different. Shelves are lower, lighting is brighter, deli food smells better, and service is improved. The Zhengzhou Xinyuan Plaza store saw a 13.9-fold surge in first-day sales, and Beijing Shijingshan store hit 1.7 million yuan in daily sales.
But this is just the 'opening effect.' Hype is not profit, and buzz is not repeat purchases.
What did Yonghui pay for this brief excitement?
**Per-store cost: Management revealed that per-store transformation investment ranges from 5 to 8 million yuan.**
**Closure losses: A store closed for a month still incurs rent and labor costs, with zero revenue.**
**Asset write-offs: In 2025 alone, transformation-related asset write-offs and investments amounted to approximately 910 million yuan.**
**Store closure pain: Closing 381 stores involves lease compensation, employee placement, and supply chain restructuring—another astronomical figure.**
The result: Estimated net loss attributable to shareholders for 2025 is approximately -2.14 billion yuan, with cumulative losses exceeding 11.6 billion yuan.
### 2. Yonghui's 'Middle Trap' in Brand Positioning
Yonghui's core label used to be 'everyday low prices.' But after the 'Pang Donglai-style' transformation, bulk vegetables became small packages, bakery prices rose, and services upgraded.
Consumers walk into the store and think: **'Why have you become more expensive?'**
When the original 'cheap' label is torn off and the new 'premium' label isn't firmly established (because product strength hasn't caught up), customers become confused.
Those wanting cheap go to discount stores (like Snack Hero or Zhao Yiming).
Those wanting premium go to Sam's Club or Hema.
Those wanting convenience go to Meituan or Dingdong.
Yonghui is stuck in the 'neither up nor down' middle ground, which is the most uncomfortable position.
### 3. Lack of 'Must-Buy List' Due to Product Gaps
This is Yonghui's most painful point.
Store decor, layout design, lighting, and music can all be changed overnight.
But **product strength** cannot be changed.
Yonghui's biggest problem now is that it hasn't formed a 'must-buy list' that consumers crave.
Customers go to Pang Donglai for the big mooncake and craft beer; they go to Sam's Club for the Swiss roll and roast chicken. What do you go to Yonghui for?
Without this 'must-buy reason,' no matter how lively the store, it's just 'pass-through consumption.'
Yonghui's warning: For large national enterprises, trying to rebuild the system at high cost is a race against time. If the new profit model doesn't work, the old cash flow will be burned through.
## Better Life: Not a Myth, but 'System Repair'
In contrast, after the transformation of Better Life's Meixi Lake store, first-day sales during the May Day holiday reached 2.4 million yuan with 17,700 visitors, compared to less than 200,000 yuan daily before the transformation.
Many exclaim 'Pang Donglai myth.' But I'd pour cold water: **This is not a myth; it's a normal rebound after 'system repair.'**
Equating Better Life's phased improvement with a 'myth' disrespects retail laws and misleads many eager bosses into the dead end of 'formalistic transformation.'
When a company's fundamentals haven't completely collapsed, and it has both external advanced experience (Pang Donglai team) and internal firm execution, **systematic transformation can be a 'resurrection spell' rather than a 'death warrant.'**
But all this has strict prerequisites.
### 1. Existing Fundamentals and Transformation Mindset
**Before transformation (Meixi Lake store):** Daily sales of about 150,000–180,000 yuan, sparse customer traffic, outdated product structure, very low proportion of deli and bakery, and low employee morale.
**After transformation (May 2024, first day of May Day):** Single-day sales of 2.4 million yuan, customer traffic of 17,700.
**This 2.4 million includes a large amount of 'opening pulse consumption'** (stockpiling, novelty, social media check-ins), not steady-state daily sales. The average weekly sales 3–6 months after transformation are the true level.
This 13-fold figure is essentially a combination of 'rebound from the bottom + novelty dividend + holiday effect + Pang Donglai IP traffic,' not simply 'sustainable performance.'
### What did the Pang Donglai team do?
In early 2024, Yu Donglai personally led store visits, with key members like Guan Na and Shen Hongli involved in planning. What they brought to Better Life wasn't 'more expensive decor,' but:
Pang Donglai brought 'standards + mindset,' while the Better Life team handled 'execution + local adaptation.' Only when both are online simultaneously does a chemical reaction occur.
### Therefore, we need to understand this concept: Myth Thinking vs. Repair Thinking.
**Myth Thinking: '**Learn Pang Donglai's moves → sales multiply tenfold → rest easy from now on.'
**Repair Thinking: '**My store's fundamentals are still there (property, customer base, brand awareness), but the products are bad, service is poor, and employees are demoralized. Now, with external advanced experience, I reconnect the broken subsystems one by one, restoring the store to the level of a healthy enterprise. This is repair, not creating miracles out of thin air.'
Better Life did the latter.
It proves that **the same store, same location, and roughly similar potential customers can yield a 10-fold difference when business logic (products, store, employees, service) is corrected simultaneously.** But this '10-fold difference' is from 'pathological undervaluation' back to 'expected level + novelty premium,' not a free ride thereafter.
### 2. Phased Dividends and Long-term Endurance
I keep emphasizing this because too many bosses rush to order display racks and paint after reading the news.
**Sources of phased dividends:** Media exposure + Pang Donglai endorsement + opening promotions + customer curiosity → short-term surge.
**Sources of long-term endurance:** Products consistently tasty/fresh → customers form **repeat purchase habits** → sales stabilize at a higher platform than before transformation → healthy gross margin structure → positive cash flow cycle.
Better Life currently shows a 'promising starting point' transitioning from the former to the latter. It still needs to verify:
> 1. Can daily sales stabilize at 180%–200% of pre-transformation levels after 6 months?
>
> 2. Can private brands/core items (bakery, deli, selected produce) establish 'must-buy' mindshare?
>
> 3. Does the proportion of direct supply chain procurement continue to rise, preventing overall gross margin from collapsing due to promotional discounts? Better Life has been given an entry ticket, not a finish-line gold medal.
>
> 4. What are the three hidden prerequisites for Better Life's success (which Mei Te Hao/Yonghui may not simultaneously possess)?
This is also a key reminder for supermarket bosses: **Don't just copy actions; assess whether you have the 'basic constitution' to undertake transformation.**
### Prerequisite 1: Fundamentals Not Completely Collapsed
Better Life still has in Hunan:
> Relatively solid regional brand awareness ('Hunan people's own supermarket');
>
> Relatively good store locations (Meixi Lake new business district);
>
> Supply chain foundation not completely destroyed (some base planting/factory direct supply relationships still exist);
>
> Employees are tired but haven't massively defected; core middle management is willing to learn.
**Compared to Mei Te Hao:** Trust collapse + multi-company entanglement + supplier supply cutoff → even with Pang Donglai's help, effective implementation before reorganization is difficult.
### Prerequisite 2: External Mentor + Internal Leader's Determination, Dual Drive
The Pang Donglai team isn't there for 'co-management'; they provide benchmark demonstrations and store visit corrections. It's Better Life's own executives and store managers who oversee execution daily.
Better Life Chairman Wang Tian publicly stated: '**Learn comprehensively, without reservations.**' This includes enduring worse short-term profits, closing underperforming stores, cutting SKUs, and increasing wages.
**Compared to some companies:** The boss says 'learn' but internally calculates 'don't let this year's profits drop too much'; procurement resists net-price direct sourcing (fearing loss of rebates); store managers resent increased workload → actions become distorted, and transformation becomes superficial.
### Prerequisite 3: Restrained Expansion, Focus on Single Store/Region First
Better Life first focused on transforming the **Meixi Lake store**, making it a model before considering replication. Not all 300 stores nationwide simultaneously.
**Compared to Yonghui:** Nationwide presence, planning to transform 315 stores and close 381 in 2025. The management radius is enormous, and per-store transformation investment (5–8 million yuan) multiplied by hundreds creates huge financial pressure and dilutes organizational capacity.
## Deep Analysis: Where Are Traditional Supermarkets Stuck?
Looking at these three together, you'll find a common model fracture. I call it the 'Four Breakpoints of Time, Space, People, and Goods.'
The essence of retail is to sell the right **goods** to the right **people** at the right **time** in the right **space**. In the past, these four were connected. Now, they're all broken.
### Breakpoint 1: Time
In the past, customers were willing to spend an afternoon at the supermarket, stocking up for a week.
Now, time is fragmented. If you run out of milk for breakfast, it's delivered in 30 minutes; if you need a scallion for dinner, you go downstairs. Who would set aside an afternoon for you? **The 'centralized shopping' time window for hypermarkets is closing.**
### Breakpoint 2: Space
In the past, the hypermarket was the temple of 'one-stop shopping.'
Now, the spatial advantage is dismantled. Fresh produce is taken by community group buying, daily necessities by e-commerce, and high-quality items by membership stores. **Your big box faces professional killers in every category.**
### Breakpoint 3: People
In the past, customers were a vague mass of families.
Now, needs are extremely segmented. Some want the lowest price (discount stores), some want the fastest (instant retail), and some only recognize imports (premium supermarkets). **Traditional supermarkets still use 'one set of shelves to serve everyone,' which is naturally exhausting.**
### Breakpoint 4: Goods—The Most Fatal Break
This is the most painful point.
Store decor, layout design, lighting, and music can all be changed overnight.
But **product strength** cannot be changed.
Without a 'hero product' that customers must come for, and without a stable repeat purchase logic, no matter how lively the store, it's just 'pass-through consumption.' Yonghui's biggest problem now is that it hasn't formed a 'must-buy list' that consumers crave.
## Final Thoughts
Mei Te Hao, Yonghui, and Better Life—these three mirrors reflect the current state of traditional supermarkets.
Many bosses ask me what to do now. My answer is: **'Don't try to hold on to the old map.'**
If you want to close stores, close them decisively; if you want to improve quality, accept short-term loss of old customers; if you want to curate, dare to cut 80% of ineffective SKUs.
The pain of transformation lies in 'subtraction.' If you don't dare to cut old baggage, there's no room to grow new capabilities.
> The retail industry is simple;
>
> If customers come back, the business can be saved;
>
> If customers don't return, no matter how grand the story, it's useless.
This is probably the most important thing to remember when looking at these three supermarkets together.


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## Citation metadata

- Publisher: New Distribution
- Author: 张振峰
- Published: 2026-06-04
- Canonical: https://xinjignxiao.com/en/articles/the-collapse-of-an-8-5-billion-retail-regional-champion-the-life-and-dea-da81f339/
- Original source: https://mp.weixin.qq.com/s/6xw4sHFGg4YZ1yunEsPf0g

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