Yonghui Issues Ultimatum to Sam's Club Over Supply Chain "Binary Choice" Offline Retail Fair Competition Stirs Again

Why is AI and Yonghui accusing Sam now despite continuous losses?

21st Century Business Herald Reporter Tang Weike

On March 16, 2026, Yonghui Supermarket’s private brand, Quality Yonghui, issued an open letter directly accusing Sam’s Club of requiring suppliers to choose only one partner in the supply chain, using exclusive cooperation to restrict supply channels and squeeze out competitors.

It’s worth noting that this isn’t the first time Sam has been involved in supply chain exclusivity disputes. As early as 2021, Hema X Member Store and Carrefour Member Store publicly complained about similar pressures, and the offline retail “upstream competition” has continued to intensify.

According to the latest financial report, Yonghui Supermarket’s net profit attributable to shareholders for 2025 is expected to lose 2.14 billion yuan, with a non-recurring loss of 2.94 billion yuan, marking five consecutive years of losses. The company states that the losses mainly stem from one-time costs related to store renovations, asset disposals, and product updates. Although same-store sales turned positive in the first three quarters, the overall business remains in a painful transition period, with a more urgent need for high-quality supply chains and high-margin products.

Meanwhile, Sam continues to grow rapidly. Walmart’s latest financial report shows that in 2025, Sam’s China sales exceeded 140 billion yuan, a year-on-year increase of about 40%. Paid memberships surpassed 10.7 million, with 63 stores nationwide, each generating over 2.2 billion yuan in annual revenue, and online sales accounting for 50%. As Walmart China’s core growth engine, Sam’s has achieved double-digit same-store sales growth and over 35% growth in membership fee income. Its scale advantage and channel dominance continue to strengthen, giving it an absolute advantage in supply chain negotiations.

This dispute centers on the competition for private brand supply chains.

Sam leverages its Member’s Mark brand to build a mature system, with strong bargaining power due to bulk purchasing. Yonghui’s “Quality Yonghui,” launched less than a year ago, overlaps heavily with Sam’s in categories like baked goods, snacks, and daily necessities. The competition for quality factories, customized products, and production capacity is becoming increasingly fierce.

This scene closely resembles the industry turmoil of 2021.

Back then, after Hema X Member Store opened, it publicly stated that it faced long-term pressure from suppliers “cutting off” supplies, with many suppliers terminating cooperation due to channel intimidation. Carrefour Member Store also accused competitors of pressuring brands—if they supplied the new member stores, their existing products would be taken off shelves, and some products were even bought out on opening day. Hema and Carrefour once planned to jointly report these issues.

At that time, Sam responded that it had not found any “choose one” behavior, and no public penalty was ultimately imposed. Hema’s member stores have since exited that market segment and shifted focus to new areas.

From Hema and Carrefour to Yonghui now, all three accusations point to the same core issue: powerful membership stores leveraging scale advantages to restrict suppliers and competitors through exclusive clauses, capacity locking, and shelf removal threats. They turn channel competition into supply chain barriers, hindering new entrants from accessing quality sources.

As platform economy extends into physical retail, regulatory oversight of “choose one” fair competition has gradually strengthened.

The State Administration for Market Regulation has repeatedly clarified that market-dominant operators restricting trading partners to only do business with them without legitimate reasons constitutes an abuse of market dominance prohibited by antitrust law. In e-commerce, “choose one” practices have faced hefty penalties. Although offline retail scenarios differ, using supply chain advantages to force exclusive cooperation also violates fair competition principles.

Industry experts generally believe that supply chain “choose one” practices cause triple harm: weakening suppliers’ bargaining power, squeezing out small and medium-sized retailers, and ultimately reducing product choices and raising consumer costs. As warehouse membership stores expand rapidly and private brands become profit centers, upstream competition becomes more intense. If exclusivity becomes normalized, it will deepen industry consolidation and reduce market vitality.

Some food industry suppliers also told 21st Century Business Herald that with improved regulation, conditions are more favorable to suppliers. However, leading suppliers often produce customized products for large platforms. Once a platform helps incubate a popular item, many imitators follow, making it risky for suppliers to offend major platforms.