Core Viewpoint - Yonghui Supermarket (SH601933) has issued an open letter to suppliers advocating for a transparent supply chain and a zero-tolerance policy against corruption and hidden rules, emphasizing the importance of integrity in business practices [1][6]. Group 1: ESG Reporting and Practices - In the A-share retail sector, there are 71 listed companies, with only 24 (33.8%) having published ESG reports, which is below the overall A-share disclosure rate of 46% [2][11]. - The main ESG topics addressed by these companies include climate change, supply chain security, and product safety [2]. - Experts suggest that retail companies have significant room for improvement in ESG practices, which can enhance brand value and sustainable development [2][11]. Group 2: Corruption and Governance - Yonghui Supermarket has established a comprehensive supervision mechanism to combat corruption, including multiple reporting channels for whistleblowers [6][11]. - Among the top 10 retail companies by market value, only 3 have disclosed corruption-related data, all reporting zero incidents [6][11]. - Companies like China Duty Free Group have implemented training programs to prevent corruption, achieving 100% coverage among employees [6]. Group 3: Supplier Management and Rights Protection - Yonghui Supermarket's open letter states a commitment to rejecting "backdoor" dealings and hidden rules in supplier onboarding, ensuring all applications go through official channels [1][8]. - The company emphasizes timely financial settlements with suppliers, aiming to avoid delays and complications [1][8]. - The retail industry generally employs a tiered supplier management system, but there is a lack of focus on supplier rights protection [8][11].

Core Insights - The "2024 China Supermarket Top 100" report indicates that the total sales scale of the top 100 supermarket companies is approximately 900 billion yuan, reflecting a year-on-year growth of 0.3% [1][2] - The total number of stores has decreased to 25,200, representing a year-on-year decline of 9.8% [1][2] - Among the top 100 companies, 42 reported an increase in sales, while 25 saw an increase in the number of stores; 14 companies experienced growth in both sales and store numbers [1][2] Company Performance - Walmart (China) continues to lead the Top 100 with sales of 158.8 billion yuan [2] - Other top companies include: - C. P. Group (RT-Mart, Super RT-Mart, M Membership Store) - Hema (Hema Fresh) - Yonghui Superstores - Wumart [1] - Notable sales growth was observed in companies such as Costco, Chipotle Technology (Hotmaxx), Yao Di, and Aldi [2] Market Trends - Membership and discount stores continue to show significant growth in both sales and store numbers [2] - The overall number of stores in the Top 100 has decreased by 2,750, but sales have improved due to various corrective measures [2] - More than 60% of companies have improved their store performance, particularly those with sales between 3 billion and 10 billion yuan, which represent the highest proportion [2] - The share of online retail sales is increasing, with online sales accounting for 16.9% of total sales in 2024, highlighting the growing importance of front warehouses in boosting online sales [2]

Core Insights - The food retail industry is experiencing a shift from traditional retail formats to specialized vertical categories, accelerating the process of chain development [1][7] - The overall digitalization level in the food retail sector is low, and increasing the chain rate will drive digital transformation focused on efficiency upgrades and experience reconstruction [1][10] - The digital reconstruction of the food retail industry is based on the concept of "people-goods-scene," with the cash register system serving as a key data touchpoint [1][13] Digitalization Demand Background - The food retail industry has a low digitalization level, primarily consisting of decentralized community stores and small shops, but is entering an accelerated phase of digital transformation due to the rise of new business formats [10] - Digitalization can integrate the supply chain, optimize procurement costs, and enhance management efficiency while reducing inventory waste [10] Evolution of Food Retail Formats - The transition from traditional supermarkets to specialized vertical formats is a response to high loss rates and low efficiency in traditional retail [7] - New formats such as brand snack chains, community fresh supermarkets, and fresh pre-staging warehouses are emerging, promoting overall chain development in the food retail sector [7] Digital Framework of Food Retail - The core of food retail digitalization lies in reconstructing the collaborative relationship among people, goods, and scenes [13] - The cash register system, supply chain management system, and omnichannel operation system form the "iron triangle" of food retail digitalization [13] Cash Register System - The cash register system enhances operational efficiency through integrated payment, inventory management, and dynamic promotions, serving as a data hub for the "people-goods-scene" interaction [20][24] - Different product categories require tailored cash register systems to meet specific sales and promotional needs [20] Supply Chain Management System - The supply chain management (SCM) system integrates the entire process from procurement to sales, enhancing efficiency, controlling costs, and mitigating risks [27][30] - SCM systems enable intelligent replenishment and inventory optimization, crucial for managing perishable goods [27] Omnichannel Operation System - The omnichannel operation system integrates online and offline data flows, creating a unified customer view and enhancing marketing strategies [34][36] - It focuses on data accumulation, customer engagement, and operational analysis to drive business performance [34] Market Outlook - The Chinese food retail market is substantial, with the GMV expected to exceed 7 trillion yuan in 2024 and grow to 8.7 trillion yuan by 2029 [39] - Digitalization is becoming a key competitive factor, with significant growth potential for digital vendors that can capitalize on market opportunities [39] Industry Trends - The food retail sector is transitioning from a sales-driven to a demand-driven model, with vertical vendors poised to seize opportunities through refined category management [43] - Digital vendors in the food retail space are expected to leverage cloud-native architectures and data-driven strategies to enhance operational agility and market responsiveness [46]

Core Viewpoint - The article discusses the significant reforms initiated by Ye Guofu at Yonghui Supermarket, focusing on anti-corruption measures and supply chain optimization to enhance retail quality and operational efficiency [1][2][3]. Group 1: Anti-Corruption Measures - Ye Guofu has publicly declared a war against corruption and hidden rules within the supply chain, emphasizing the need for transparency and integrity in supplier relationships [1][5][6]. - The reform plan targets three main areas: clean cooperation, supplier onboarding, and financial settlement, ensuring prompt payments without unnecessary delays or complications [7][10]. - Ye aims to eliminate the traditional practices that have led to corruption, such as requiring suppliers to pay various fees to enter the supermarket channel, which can create a breeding ground for corrupt practices [6][8]. Group 2: Supply Chain Optimization - Under Ye's leadership, Yonghui is focusing on core suppliers by adopting a direct procurement model, reducing intermediaries, and cutting unnecessary costs [11][12]. - The strategy involves retaining only 200 core suppliers to ensure quality and reliability, with Ye personally overseeing these relationships [14][20]. - Yonghui plans to develop 100 billion-level products in collaboration with suppliers over the next three years, aiming for self-branded products to account for 40% of total sales in 3-5 years [24][30]. Group 3: Organizational Restructuring - Ye has initiated a significant restructuring of the internal team, with a shift in board composition and management roles, replacing several long-standing members with new talent from Miniso [16][18]. - The organizational structure is being simplified from a four-tier to a three-tier system to enhance efficiency [27]. - Ye's reform also includes closing underperforming stores, with an estimated 250-350 closures planned for the year [28][32]. Group 4: Performance and Future Outlook - The article notes that Yonghui has begun to see positive changes, with a reported profit of 74.72 million yuan from 41 remodeled stores in the first quarter [30]. - The company is optimistic about its recovery, projecting that by the end of September, 200 remodeled stores will significantly boost overall performance [31][34]. - Despite a loss of 1.465 billion yuan in 2024 and a nearly 20% decrease in revenue in the first quarter, the management believes the reforms will lead to a turnaround [32][33].

Core Viewpoint - The article discusses the significant reforms initiated by Ye Guofu at Yonghui Superstores, focusing on anti-corruption measures and supply chain improvements to enhance operational efficiency and restore profitability. Group 1: Anti-Corruption Measures - Yonghui Superstores publicly declared a war against corruption and hidden rules, marking a new phase in Ye Guofu's supply chain reform [2][3] - Ye emphasized the need for transparency in pricing and quality during a supplier conference, demanding core suppliers to possess anti-corruption capabilities [4] - The company aims to eliminate corrupt practices that inflate supply chain costs, focusing on three main areas: clean cooperation, supplier onboarding, and financial settlement [5][6] Group 2: Supply Chain Reforms - Ye's strategy includes direct procurement from core suppliers, eliminating middlemen and unnecessary costs [8] - He identified thousands of suppliers in the fresh produce category, opting to work with 200 core suppliers to ensure quality and establish long-term partnerships [9] - The goal is to create a symbiotic relationship with suppliers, ensuring they feel secure and supported [9] Group 3: Internal Restructuring - Ye's reform efforts have led to significant changes within the Yonghui board, with the "Mingchuang system" gaining substantial influence [10] - A personnel adjustment occurred, resulting in the replacement of several key management positions within the supply chain system [11] - Ye appointed She Xianping as the Chief Purchasing Officer, who has a strong background in supply chain management [12] Group 4: Product Focus and Brand Development - Ye aims to focus on core products, planning to develop 100 billion-yuan-level products over the next three years [14] - The number of private label SKUs has been reduced from over 1,000 to 87, with a target for private label sales to reach 40% of total sales in the next 3-5 years [16] - Yonghui has already launched popular private label products and plans to introduce at least 60 new items this year [15] Group 5: Operational Changes and Financial Outlook - Ye's "433" reform plan targets organizational, operational, and supply chain improvements [17] - The management structure has been simplified from a four-level to a three-level system, enhancing efficiency [18] - Yonghui plans to close 250-350 underperforming stores this year, with a focus on improving overall profitability [19] - The company reported a profit of 74.72 million yuan from 41 remodeled stores in the first quarter, indicating positive momentum [21] - Despite a loss of 1.465 billion yuan in 2024, there are signs of recovery, with a projected increase in store renovations and overall sales [22]

Core Insights - Yonghui Supermarket has opened its first "Learning from Pang Donglai" self-adjustment store in Taiyuan, Shanxi, providing a new shopping experience for local residents [1] - The store underwent a significant product upgrade, with over 65% of the products being newly added, enhancing the proportion of first- and second-tier brands and imported goods [1] - The product structure of the upgraded store closely resembles 80% of Pang Donglai's product structure, including a 25% increase in fresh food items [1] Product Offerings - The store features a dedicated brand area for Pang Donglai products, including DL craft beer, DL Baofeng liquor, and DL fruit oatmeal crisps, allowing local residents to access quality goods [1] - A variety of local and specialty products have been introduced, such as freshly made local delicacies and popular snacks [1][5] - The fresh produce section includes organic vegetables, high-quality seafood, and seasonal fruits, with a focus on freshness and quality [5][11] Customer Experience Enhancements - The supermarket has implemented personalized services at the meat, poultry, and seafood counters, including free fish scaling and cutting services [3] - Staff have undergone rigorous training to ensure service standards are met, with an average salary increase of nearly 20% for frontline employees [3] - Facilities for employees have been improved, including rest areas and a free cafeteria, as part of the "Craftsman Plan" to develop a skilled workforce [3] Marketing and Events - The supermarket is set to launch its annual "717 Good Eating Festival," focusing on quality consumption and featuring over 100 new quality products [11] - The festival will include food tasting events and immersive shopping experiences for consumers, enhancing brand engagement [11]

Group 1 - Private enterprises play a crucial role in boosting consumption, serving as important suppliers, promoters of consumption upgrades, and direct beneficiaries of consumption expansion [1] - The continuous optimization of the policy environment and deepening digital transformation have led to significant contributions from private enterprises in promoting consumption [1] Group 2 - The SOLANA Blue Harbor, a national-level 3A tourist attraction, has transformed into a demonstration window for Beijing's international consumption center city construction by integrating water-based commerce, outdoor streets, and non-standard economies [3] - Blue Harbor has created diverse consumption scenarios and cultural IPs, enhancing its positioning as a high-end leisure port for international trends and quality living [3][4] Group 3 - The Blue Harbor commercial area has successfully integrated commercial and artistic scenes, becoming a popular social media hotspot with numerous trendy dining options [4] - Plans to create immersive consumption experiences for concert-goers by linking ticket stubs to discounts and after-party events are underway, promoting synergy among local businesses [4][5] Group 4 - Xiushui Street, known for high-quality "Beijing gifts," has seen a 245% increase in inbound tourist numbers in 2024 compared to the same period in 2023, with sales up 71% [7] - The street is becoming a hub for "national treasures," showcasing Chinese design and craftsmanship, and aims to present a comprehensive experience of Chinese culture to international visitors [8] Group 5 - The brand "Kailun Life," incubated by Xiushui Street, exemplifies the support for local designers and the promotion of high-quality Chinese products [9] - Xiushui Street has undergone a comprehensive update since 2020, focusing on supporting lesser-known but high-quality Chinese brands to enhance their visibility [8] Group 6 - The traditional restaurant "Meizhou Dongpo" has adapted to consumer demands by innovating its breakfast offerings, including a "half-portion" concept to promote balanced nutrition [11] - The restaurant has received support from local government initiatives aimed at stimulating consumption and enhancing market opportunities [12] Group 7 - The emerging brand "Xiaoxian Stewed" has led the fresh stewed bird's nest market in China for eight consecutive years, focusing on systematic innovation to modernize traditional health products [14][15] - The brand has expanded to 27 stores across 16 cities, benefiting from supportive policies in Chaoyang District [15] Group 8 - The cultural product "Bing Dwen Dwen," associated with the 2022 Winter Olympics, has generated over 300 million yuan in sales, showcasing the appeal of cultural consumption [16] - Beijing Huajiang Culture Group has successfully developed Olympic-themed cultural products, demonstrating the potential of small products to become significant businesses [17] Group 9 - The transformation of industrial relics, such as the Shougang Park's SoReal Sci-Fi Theme Park, illustrates the integration of technology and culture in creating new consumer experiences [24] - The park has attracted 150,000 to 200,000 visitors annually, becoming a landmark for cultural tourism and educational activities [25] Group 10 - Traditional supermarkets like Yonghui are adapting to changing consumer environments by implementing innovative retail strategies, resulting in a significant increase in sales and customer traffic [28][29] - The support from local government in streamlining processes and enhancing the business environment has been crucial for the success of these adaptations [30][31] Group 11 - Overall, private enterprises are becoming a driving force for economic growth, employment, and innovation in China, supported by favorable policies and a focus on enhancing the business environment [1][28]

Core Viewpoint - Yonghui Supermarket has demonstrated a strong commitment to reform by launching an anti-corruption initiative aimed at combating corruption and hidden rules within its supply chain [1][11]. Group 1: Anti-Corruption Measures - Yonghui Supermarket has announced a zero-tolerance policy towards corruption, establishing a comprehensive supervision mechanism and encouraging suppliers and the public to participate in oversight [11][12]. - The company has set up a whistleblower protection system, ensuring confidentiality and prohibiting retaliation against those who report misconduct [11][12]. - Yonghui has committed to strict penalties for verified misconduct, including legal accountability for involved personnel and termination of partnerships with corrupt suppliers [11][12]. Group 2: Supplier Engagement - Yonghui Supermarket rejects any form of "backdoor" dealings and hidden rules, requiring all suppliers to submit cooperation applications through official channels [11][12]. - The company promises a 24-hour response time for supplier applications and has implemented an online process for registration, negotiation, and contract signing to eliminate human interference [11][12]. Group 3: Financial Settlement - Yonghui has pledged to ensure timely and accurate payments to suppliers, adhering strictly to contractual terms [11][12]. - A dedicated financial settlement hotline has been established to provide immediate online payment services and quick resolution of complex issues [11][12]. Group 4: Business Performance and Strategy - As of July 7, 2023, Yonghui has completed the transformation of 128 stores under the "Fat Donglai" model, resulting in significant sales growth [12][13]. - The company reported a revenue of 67.574 billion yuan in the previous year, a decline of 14.07%, with a net loss of 1.465 billion yuan, which increased by 10.26% year-on-year [12][13]. - Yonghui aims to collaborate with suppliers to develop 100 billion-level products and has integrated supply chain reform into its core business strategy [13][14].

Core Insights - The report maintains an "outperform" rating for the retail sector, anticipating that easing international conditions and domestic policy stimulus will positively influence the sector's performance [3][42]. - The overall retail sales in May 2025 reached 4.13 trillion, growing by 6.4% year-on-year, with goods retail sales increasing by 6.5% [11][14]. Beauty and Personal Care - In May 2025, the cosmetics retail sales grew by 4.4%, with high online penetration leading to diminishing promotional effects. However, leading domestic brands are expected to outperform the market due to the trend of domestic product substitution [11][12]. - The competitive landscape is intensifying, with rising sales expense ratios expected to pressure profit margins for some brands, although top players with strong product innovation may still achieve robust growth [11][12]. Gold and Jewelry - The gold and jewelry sector saw a significant year-on-year growth of 21.8% in May 2025, benefiting from a low base effect from the previous year. Products that appeal to younger consumers are expected to drive higher growth rates [11][12]. Supermarkets and Department Stores - From January to May 2025, department store sales slightly increased by 1.3%, while supermarket sales grew by 5.7%. Companies that adapt to the current value-for-money consumption trend through supply chain upgrades are expected to perform better [12][14]. Cross-Border E-commerce - The second quarter is expected to face short-term performance pressures due to external environmental challenges. However, leading platform companies are anticipated to demonstrate strong resilience in the medium to long term due to flexible tariff responses and solid product capabilities [12][14]. Investment Recommendations - The report recommends several companies across different sectors, including: - Beauty and Personal Care: Recommended companies include 毛戈平, 丸美生物, and 登康口腔, which are expected to benefit from domestic product substitution and channel optimization [3][42]. - Gold and Jewelry: Companies like 老铺黄金 and 潮宏基 are highlighted for their potential to achieve accelerated growth due to favorable market conditions [3][42]. - Cross-Border E-commerce: Recommended companies include 小商品城 and 安克创新, which are positioned to capitalize on improving trade conditions [3][42]. - Retail: Companies such as 名创优品 and 重庆百货 are suggested for their low valuation and potential for improvement [3][42].

Core Viewpoint - Yonghui Supermarket has publicly declared a war against corruption and hidden rules, emphasizing integrity as a core value and the foundation of cooperation with suppliers [1]. Group 1: Measures Against Corruption - Yonghui Supermarket will implement a comprehensive supervision mechanism, encouraging suppliers and the public to participate in monitoring for a fair business environment [2]. - Strict penalties will be enforced for confirmed cases of corruption, including legal accountability for involved personnel and termination of partnerships with implicated suppliers [3]. - Protection for whistleblowers will be ensured, with all reports kept confidential and any form of retaliation strictly prohibited [4]. Group 2: Supplier Entry and Cooperation - Yonghui Supermarket has established a unified entry point for supplier applications, requiring all submissions to be made through the official website or designated QR codes, prohibiting any private recommendations by employees [6]. - The company promises efficient responses, with cooperation applications being addressed within 24 hours and all processes being fully online to eliminate human interference [6]. - A quality ecosystem will be built, focusing solely on quality standards and collaborating with suppliers to establish a quality management system throughout the supply chain [6]. Group 3: Financial Settlement Commitments - Yonghui Supermarket commits to timely payments, adhering strictly to contract terms and ensuring accurate payment processes [7]. - A dedicated financial settlement hotline will be established for suppliers, providing immediate online payment options and rapid response to inquiries within 24 hours [8]. Group 4: Performance and Store Transformation - As of now, Yonghui Supermarket has completed the transformation of 128 stores under the "Fat Donglai" model, with significant sales growth compared to pre-transformation levels [8]. - The company reported a revenue of 67.574 billion yuan for the previous year, a year-on-year decline of 14.07%, and a net loss of 1.465 billion yuan, which increased by 10.26% year-on-year [8]. - For Q1 2025, Yonghui Supermarket achieved a revenue of 17.479 billion yuan, down 19.32% year-on-year, with a net profit of 148 million yuan, a decrease of 79.96% [8]. - The company aims to complete the transformation of 200 stores by September 30 this year, focusing on employee training and enhancing product structure to strengthen its private label offerings [9].