Yonghui Superstores, once feted as a poster child of China’s supermarket boom, has reported a fresh year of heavy losses as it pursues a sweeping store remodelling and repositioning plan. The company expects a 2025 net loss attributable to shareholders of RMB 21.4 billion, driven largely by the cost of closing and refitting outlets as it shifts from a scale-driven model to one focused on “quality growth.” This marks the fifth consecutive year of losses for Yonghui, with cumulative deficits since 2021 totaling about RMB 116.4 billion.
The short-term hit is material and granular. Management says it deep-restructured 315 stores and closed 381 locations that did not fit the new strategy; associated one-off costs — asset write-offs, start-up expenses for relaunched outlets and lost operating gross margin during closures — amount to roughly RMB 9.1 billion, with an additional RMB 3 billion in lost gross profit. Employee severance, lease break penalties and other closure-related charges also pushed costs higher: from January to September 2025 alone, compensation for closed stores reached RMB 266 million.
Outside the store network, Yonghui has booked other non-operational impairments. A foreign equity holding in Advantage Solutions recorded a fair-value loss of RMB 236 million, and the company made preliminary provisions of about RMB 162 million for long-term asset impairments, largely tied to persistently loss-making outlets. Together these items help explain why the company’s adjusted net loss (excluding non-recurring items) is even larger than the headline figure.
There are early signs the strategy can work, but they are small relative to the cost. Of the 31 remodelled outlets completed in 2024 and trading through the first nine months of 2025, sales rose 71% year-on-year to RMB 4.662 billion and store-level profit more than doubled to RMB 104 million. Yet those stores make up a minor share of the estate, and the bulk of 2025’s remodels remain in the investment-heavy phase and have not yet made a net contribution to group results.
The corporate balance sheet is under pressure. Yonghui says its overall funding shortfall from Q4 2025 through 2027 will reach about RMB 3.55 billion, prompting a proposed private placement of up to RMB 3.114 billion to finance store and logistics upgrades and to shore up liquidity. The move comes after entrepreneur Ye Guofu’s Miniso-affiliated vehicle built a 29.4% stake last September at RMB 2.35 per share; the stock trading at RMB 4.67 on January 22 shows his position is now significantly in the money.
Yonghui’s timing is made more precarious by structural change across China’s retail market. Data from Worldpanel and Bain cited by the company show large-format hypermarkets have lost 10% of sales year-on-year through the first three quarters of 2025, while supermarkets dipped 1%. New formats — discount chains, snack-collection stores and warehouse membership clubs — surged by 90%, 51% and 40% respectively. Digital innovations such as instant delivery and front‑room micro-fulfilment increasingly compress the margins and footfall that traditional supermarkets rely on.
For Yonghui the question is whether the ‘Pang Donglai’ inspired revamp — a store-centric, service-led model emphasising product quality and customer experience — can create a defensible niche in an ecosystem that is fragmenting along value, convenience and experience lines. Management expects most remodelled stores to reach stable operations in 2026 and plans to cut the pace of closures and renovations next year, signalling the worst of the disruption may be behind it. Still, the company’s recovery hinges on execution, a replenished cash runway and the ability to translate isolated store improvements into a profitable, scalable format before competition erodes the addressable customer base.