Source | Retail Business Review On a working afternoon, customer flow at the Yonghui Superstore on the second floor of Xilongduo Shopping Center in Shijingshan District was steady. Near the store entrance, in the fruit-cutting area, employees were skillfully cutting, boxing, and packaging fruit. It is understood that after this renovation, the area has achieved "open kitchen" transparency, allowing consumers to supervise the fruit-cutting process, aiming to enhance transparency and boost confidence in fruit quality. The store strictly implements a freshness management system: freshly made fruit platters are discounted 20% after 4 hours, 40% after 6 hours, and removed from shelves and written off after 8 hours. Even more significant changes are evident in the product structure. The store removed nearly 80% of its original products, and after reorganization, its product structure now matches over 90% of that of the well-known retail brand Pangdonglai. Among these, the home goods category has seen particularly notable improvements, becoming a key factor in attracting younger consumers. This is just one store. Yonghui Superstores, learning from the Pangdonglai model, has delivered a phased report amid controversy and expectation. To date, Yonghui has completed renovations at 126 stores, covering 66 cities, with the single-store renovation cycle compressed from 40 days to 30 days, significantly accelerating the pace of transformation. By reviewing Yonghui's latest developments, we find that its transformation has moved from the initial "copying homework" phase into deeper waters, and whether this change can truly break through the traditional retail dilemma remains to be tested over time. Yonghui's "Pangdonglai-style" Transformation: Phased Results, "Steady-State Stores" Profitable, Renovation Accelerates In 2025, Yonghui Superstores' renovation plan entered an acceleration phase. On April 2, when the Shanghai Pujiang Wanda Plaza store opened as the first renovated store in Minhang District, Yonghui had only 48 renovated stores nationwide. By late June, this number had climbed to 109, surpassing half of the annual target of 200 stores. On June 13, six stores opened simultaneously as the 100th Pangdonglai-model renovated stores: Nanjing Jiangning Wanda Plaza, Huizhou Daya Bay Wanda Plaza, Datong Wanda Plaza, Yiwu Wuyue Plaza, Xiangyang Minfa Plaza, and Hefei Baowen. On June 15 alone, these six stores combined saw over 76,000 customer visits, achieving a Gross Merchandise Volume (GMV) of nearly 10 million yuan. Taking the Nanjing Jiangning Wanda store as an example, after renovation, the product elimination rate was 70%, the new addition rate was 60%, the fresh food ratio increased from 5% to 23%, imported goods accounted for 15%, and first-day sales reached 13.9 times that of pre-renovation levels. With the completion of 100 Pangdonglai-model renovated stores as a new starting point, Yonghui Superstores has pressed the "fast-forward button" on expanding its renovation footprint. Yonghui Superstores recently officially announced the fifth batch of "Pangdonglai Model" renovation stores, covering 29 stores. The fifth batch expands coverage to 12 provinces and cities, reaching not only regional core cities like Xi'an, Chengdu, and Fuzhou, but also extending to third- and fourth-tier county markets such as Gongyi, Hebi, Qijiang, and Anyue. Yonghui Superstores expects that by the end of August this year, the total number of "Pangdonglai Model" renovated stores nationwide will exceed 178, covering 66 cities, with the goal of completing renovations at all stores by June 2026. This process marks Yonghui's transformation from regional pilots to a national layout. Notably, renovated stores have shown profitability resilience during the traditional off-season. In the first quarter of 2025, despite industry-wide pressure, Yonghui still accumulated profits of 74.72 million yuan. In Q1, 41 "steady-state renovated stores" that had been open for more than three months distributed a total of 26.34 million yuan in bonuses and dividends to frontline store employees, with March alone achieving profits of 14.7 million yuan. According to a Yonghui Superstores spokesperson, during the Dragon Boat Festival, sales performance at Yonghui's renovated stores nationwide was impressive. Total sales increased 85% year-on-year, and customer traffic rose over 50% year-on-year. Star products performed particularly well: Feizixiao lychee sales rose 68%, Qilin watermelon increased 80%, and durian thousand-layer cake and garlic crayfish sales surged 132% and 120%, respectively. Wang Shoucheng, Vice President of Yonghui Superstores and Head of the National Renovation Project, said on site at the Nanjing Jiangning Wanda store on June 12 that over the past year, Yonghui's Pangdonglai-model renovation has spanned three stages: from May to August 2024, the Pangdonglai team assisted with renovations; from September to December 2024, the national renovation team guided the process; and after the 2025 Spring Festival, regional teams carried out independent renovations. From initial learning and imitation to now innovating with regional characteristics, Yonghui's renovation is entering a phase of refined operations. Currently, Yonghui Superstores has approximately 600 stores nationwide, with renovated stores accounting for about one-sixth. Accelerating renovations, regional decentralization, and continued downward expansion are the development trends for Yonghui's next 100 stores.
The Core of Renovation: A Revolution in Products, Scenes, and Human Efficiency
The core of Yonghui Superstores' renovation can be examined from several aspects. First is Yonghui's thorough reconstruction of its product matrix.
Unlike traditional store renovations, Yonghui's transformation is a systemic change. Yonghui's shelves are undergoing a "subtraction revolution." For example, the Shanghai Pujiang Wanda store saw a product replacement rate of 70%, with 5,762 SKUs removed and 2,665 new products added. Imported goods rose to 20% of the assortment, and fresh food such as bakery and deli increased from 5% to 20%, bringing the product structure to about 80% of Pangdonglai's standard. At the Guangxi Nanning Wuyue Plaza store, after renovation, 4,356 quality products were added, a new addition rate of over 40%, with imported goods rising to 17%. At the Zunyi Wuyue Plaza store, 14,000 of the original 20,000 SKUs were removed, and 4,345 selected items were added, forming a triple matrix of "Pangdonglai same-style products + local specialties + quality selections." The Xi'an store introduced local famous products such as Bingfeng soda, Xifeng liquor, and Hongxing soft fragrant pastry. The fresh food area, supplied through the "Yonghui Farm direct supply + local seasonal" model, offers customers more quality choices. The Shanghai Pujiang Wanda store's Chongming seasonal vegetable section features local items like asparagus and cabbage hearts, paired with Yonghui Farm's Yunnan-directed planting of Shanghai greens and lettuce seedlings. The tropical fruit section added high-demand items like Musang King durian and Chilean cherries, while the deli and bakery areas have become traffic drivers. The deli section offers "Pangdonglai same-style" small red sausages and secret-recipe beef strips; the bakery section introduced internet-famous items like Longjing mulberry daifuku and four-flavor Swiss rolls, attracting young consumers. "Previously, shopping at Yonghui felt like walking through a maze; now I can find what I need at a glance, and I can even buy Pangdonglai's internet-famous oatmeal!" said Mr. Li, a Shanghai customer. In our view, product simplification is not merely SKU reduction, but a leap in cost-performance through deep supply chain optimization, achieving "fewer but better." Supply chain transformation is the core engine of Yonghui's shift to "quality retail." In March 2025, Ye Guofu unveiled the "naked price direct procurement" strategy at the global supplier conference: cutting 60% of intermediaries, compressing the national procurement centers from 26 to 5, and locking in deep cooperation with 200 core suppliers. Ye Guofu explicitly proposed the supply chain upgrade strategy: "three focuses, one opposition"—focus on core suppliers, focus on core big single products, focus on long-termism, and resolutely oppose changing suppliers with each new buyer. "I personally screen suppliers and ensure I meet with each chairman at least once a year," is Ye Guofu's requirement. By eliminating the KA model, supply chain simplification has brought disruptive adjustments to the product structure, greatly promoting the optimization of Yonghui Superstores' supply chain system and product renewal. At the same time, the private brand strategy is the core pillar of product differentiation. She Xianping, Chief Merchandising Officer (CMO) of Yonghui Superstores, stated that Yonghui will replicate Pangdonglai's quality supply chain and greatly enhance its own-brand product development capabilities. In 2025, Yonghui plans to launch 60 new private brand products, incubate 10 super single products with 100 million yuan in sales, and aims to increase private brand sales share to 40% within 3 to 5 years. Currently, renovated stores have introduced 68 Pangdonglai private brand items, with word-of-mouth products like DL craft beer and DL laundry detergent beads becoming traffic drivers. Meanwhile, the Yonghui Preferred section, with over 60 high cost-performance items like orange juice, rapeseed oil, and cleansing wipes, has become a top choice for family stockpiling. When private brands shift from "white-label low-price goods" to "quality ambassadors," traditional supermarkets truly build a product moat.
Second is the reconstruction of the scene: Yonghui is transforming from "hypermarket" to "experience space."
Walking into any renovated Yonghui store, consumers first notice the innovative spatial design. Main aisles have been widened to 3 meters, and shelf heights uniformly lowered to 1.6 meters, breaking the traditional supermarket's "forced traffic flow" design and creating an open, transparent visual experience. One in-store consumer said: "Previously, it was crowded pushing a stroller with kids; now I can easily shop the entire store." Detailed services have become a hallmark of renovated stores. Each store is equipped with a customer rest area, featuring blood pressure monitors, water dispensers, pet storage, and other convenience facilities. The aquatic section offers oxygen injection, cleaning, and fish butchering for high-end seafood, while the meat and poultry section provides free shredding and mincing services. Food safety commitments are visualized: fresh fruit cuts are 20% off after 4 hours, 40% off after 6 hours, and removed after 8 hours; delicate items like strawberries are "cleared the same day." Online experience is also upgrading. Yonghui Superstores' online business development has become a crucial part of its overall strategic transformation. Yonghui's online business has formed a dual-track model of "self-operated App + third-party platforms." Through the "in-store experience + instant delivery" model, consumers can choose to experience in-store or order online, enjoying a seamless shopping experience. Q1 2025 data shows that 50% of online orders come from the integrated model of "offline experience + online ordering." Finally, there is the improvement of human efficiency, achieving mutual recognition from both consumers and employees. Pangdonglai founder Yu Donglai's core philosophy: "If employees are happy, customers will be happy." In May 2024, when Yonghui founder Zhang Xuansong led a team to Xuchang, Henan, to "learn from the master," Yu Donglai's first "prescription" was to enhance employee dignity. Over the past year, Yonghui has implemented disruptive reforms in its human resources system. At the employee level, frontline staff at renovated stores have seen salary increases of 30%-50%, with the minimum wage at the Nanjing Jiangning Wanda store rising from 3,400 yuan to 4,900 yuan, and employees with one year of service enjoy 10 days of paid annual leave. Free meals and upgraded break rooms have reduced employee turnover by 35%. Yonghui also implemented a "profit sharing" mechanism, distributing 26.34 million yuan in dividends to over 8,000 employees in Q1. One store manager remarked: "Previously, employee turnover was high; now everyone proactively learns service details and treats their work like craftsmen." A deeper change is occurring in the reconstruction of professional value. Yonghui launched the "Craftsman Plan," aiming to train 10,000 professional technicians, with senior technicians earning monthly salaries up to 10,000 yuan. On June 16, the national elite class for renovated store managers opened in Zhengzhou, providing 40 days of comprehensive practical training to inject talent momentum into store renovations nationwide. At the Chongqing Aegean Sea store, the workforce expanded from 93 to 135 employees, with average salaries significantly increased. Good benefits have boosted team morale, translating into better service. For example, at the Shanghai Jiading store, employees number fruits by sweetness; at the Beijing store, bakers are all graduates of professional culinary schools, with service details approaching Pangdonglai standards. Meanwhile, digital tools further release human efficiency dividends. Yonghui's self-developed full-chain retail digital system "YHDOS" was deployed at the Fuzhou Pingxi store, achieving unified online and offline inventory. The system integrates big data analytics into shelving and replenishment processes, transforming store employees from "specialized roles" to "multi-functional roles," greatly improving human efficiency. At the Fuzhou pilot store, the digital employment system has increased labor efficiency by over 20%, with some employees' monthly working hours reduced by nearly 50 hours.
Industry Future: Competition Beyond Renovation
Currently, competition in the retail industry is intensifying, new business formats are emerging, and traditional supermarkets continue to face pressure. Self-innovation in the supermarket industry has become a widespread trend. Pangdonglai's April 2025 sales reached 1.749 billion yuan, with cumulative annual sales exceeding 8 billion yuan, attracting many traditional supermarkets to follow its path. In recent years, traditional supermarkets like Wumart and Bubugao have initiated renovations. Retail Business Review found that current supermarket renovations have adopted three models: directly introducing the Pangdonglai team, self-directed renovation, and regional supermarkets' partial borrowing. The renovation methods are highly consistent: simplifying SKUs, improving employee treatment, optimizing store traffic flow, and strengthening fresh food and private brands. But the core question is how to achieve differentiation. The core competitive logic of China's retail industry has fundamentally shifted toward a quality era centered on users and products. In our view, the core competitiveness of the supermarket industry still needs to return to the essence of retail. The current development focus of supermarkets should remain on the following aspects. First, build differentiated advantages in products and supply chain. Renovation is not simply changing shelves and products; sustained product strength is the core competitiveness. For example, Yonghui's practice shows that hit product strategies and regionalized product selection are crucial. Its "directed vegetable planting" cooperation with Henan farmers achieves 24-hour rapid delivery from field to shelf, reducing loss rates to below 3%. Meanwhile, the private brand "Yonghui Preferred," with over 60 high cost-performance products, saw sales double year-on-year in the first half of 2025. Second, build omnichannel capabilities. In 2025, China's instant retail market has exceeded one trillion yuan, with supermarket categories contributing 43%. Behind this data is the normalization of consumers' demand for "instant access." We believe that building seamless omnichannel capabilities is also a top priority for supermarket transformation. Currently, Meituan Flash Sales has partnered with nearly one million physical stores to build a 30-minute delivery service network, upgrading the traditional "wait for delivery" model to "30-minute delivery." During the 618 promotion, participating physical stores saw daily customer traffic exceeding 100 million. Another example is Ele.me's Xiaoxiang Supermarket, which has deployed nearly a thousand front warehouses across 20 cities, building a digital network covering the entire "origin-warehouse-delivery" chain. Instant retail is reshaping the value chain of supermarkets. This places new demands on traditional supermarkets: either build their own instant delivery capabilities or integrate into platform ecosystems. Also, there is the competition in digital capabilities. The AI race in retail has shifted from an "optional question" to a "life-or-death question." Nvidia's latest research reveals an industry reality: AI penetration in retail has reached 90%, with 9 out of 10 companies using AI. More critically, a quarter of surveyed companies say AI contributes over 20% to revenue. Digital capability has become the third strategic focus of supermarket competition. For example, Yonghui's self-developed YHDOS system demonstrates the efficiency changes brought by digitalization. This full-chain retail digital system integrates omnichannel procurement and sales collaboration, operations, and finance, connecting online and offline business from the employee operating system. The AI technology gap will directly translate into a commercial divide. Over the next three years, the supermarket industry will continue to evolve toward a composite model of "instant + front warehouse + source direct procurement," with digital capability becoming the watershed. Conclusion After a year of renovation, Yonghui has proven short-term feasibility with data. On June 18, the China Chain Store & Franchise Association (CCFA) released the "2024 China Chain Top 100," with Yonghui Superstores ranking sixth. "Yonghui Superstores is in the deep-water zone of transformation, with the direction being to further learn from Pangdonglai. There is still a gap between Yonghui and Pangdonglai, and it will take another 2 or even 4 years to gradually close it," said Wang Shoucheng. Finally, from an industry perspective, when supermarkets collectively enter the renovation wave, it is no longer simple replication. The essence of future competition is the balance between "efficiency and warmth." Whether it is "humanized service" or "cost-performance revolution," it ultimately needs to return to a core proposition: the "people-centered" reconstruction of people, goods, and scenes. 🔺 7th China FMCG Conference Details Scan QR code for ticket inquiries