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, after consecutive 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 is not 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 greater 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 a membership fee revenue increase of over 35%. Its scale advantages 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 Member’s Mark 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” supply, 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, all three accusations point to the same core issue: powerful member stores leveraging scale advantages to restrict cooperation through exclusivity clauses, capacity locking, and removal threats, turning channel competition into supply chain barriers and hindering new entrants from accessing quality sources.

From platform economy to physical retail, regulatory oversight of “choose one” fair competition has been gradually strengthening.

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 similarly violates fair competition principles.

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

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