Japanese-funded retailers are collectively "slimming down", with AEON withdrawing from the Beijing-Tianjin-Hebei region, while Ito Yokado has made a comeback in Beijing.
On August 22, after a 12-year absence, Ito Yokado returned to Beijing's Wangjing area.
On the same day, the Wangjing V-HUB City Paradise opened, and the Wuta Hall Supermarket located on the B1 floor of the project also started operating. The new store has an area of approximately 1,500 square meters, with a focus on fresh produce, cooked food, baked goods, Japanese cuisine, and daily household essentials.
Four days later, Aeon Co., Ltd., another Japanese-funded retail company, announced that all its JUSCO supermarkets in Beijing, Tianjin, and Hebei would cease operations. Starting September 1, consumers can apply for refunds for their shopping cards.
One outlet downsized before returning to Wangjing, while another company exited its supermarket operations across the Beijing-Tianjin-Hebei region.
The timing of the two companies' moves creates a certain contrast: traditional hypermarkets are contracting, while food retail, shopping centers, and local partnerships are becoming another way for Japanese retailers to stay in the Chinese market.
Japanese-funded retail makes a turnaround
Aisaiyi's contraction in Northern China was not a sudden occurrence.
In 2022, the AEON store at Joy City in Beijing's Chaoyang district closed its doors. In 2023, the Changping location ceased operations. By 2025, the Fengtai store had shut down as well. This February, responding to rumors of a "complete exit from China" and "full store closures," AEON said the company has no plans to withdraw from the Chinese market, and that adjustments to individual stores in North China are simply operational optimization.
By August 26, all supermarket businesses in the Beijing-Tianjin-Hebei region had come to a halt.
Before the announcement was released, some stores in Tianjin had already seen a surge in prepaid card redemptions and a significant decrease in shelf inventory. For customers, the stores were still operating as usual, but from a business perspective, these stores had essentially entered the winding-down phase.
A retail industry insider's analysis of AEON's situation suggests that what the company may shut down is not just a few stores, but also the procurement, logistics, and management systems that come with them.
After the number of stores decreased, the back-end costs that were originally shared by regional stores can no longer be diluted. The remaining stores, even if they still have sales, may not be able to support the entire operational system.
Competition is equally evident.
The Beijing-Tianjin-Hebei region has brands such as Sam's Club, Yonghui Supermarket, Carrefour, Hema, and Qinxian, and traditional markets and morning markets also have a stable consumer base, so consumers are not lacking in purchasing channels, making it difficult for AEON to attract enough customer traffic from these channels.
Looking at prices, distances and product differences, Aeon has not formed a particularly distinctive label either.
Financial performance, on the other hand, has become another source of pressure.
Aeon's listed entity achieved HK$3.931 billion in revenue for the first half of 2025, a year-on-year decrease of approximately 3%; it recorded a net loss of HK$217 million to the parent company, compared to a loss of HK$171 million in the same period last year. During the same period, its mainland China business generated HK$2.147 billion in revenue, a year-on-year decrease of approximately 0.4%, and incurred a loss of HK$66.1 million.
Aeon's mainland China business incurred a loss in 2018, with a deficit of HK$58 million. The company has since pushed forward with store closures, procurement integration, and cost adjustments, but profit pressure has not completely dissipated.
For a loss-making retail company, the costs brought by inefficient regional stores are not limited to rent, but also include warehousing, logistics, procurement, and personnel management, all of which need to be allocated based on the scale of the stores.
The withdrawal from Northern China is due to both sales performance at the store level and the regional scale being unable to support the existing operational system.
Changes in store size and product structure more directly reflect Ito-Yokado's adjustments.
Ito Yokado entered Beijing in 1998, and Hua Shang Ito Yokado once had 11 stores in the city. The original Wangjing Ito Yokado Mall, which closed in 2014, covered an area of approximately 17,000 square meters and operated multiple categories including department stores, food, apparel, home appliances, and home furnishings.
12 years later, returning to Wangjing, Huatang Supermarket compressed its store operating area to 1,500 square meters.
Apparel, home appliances, and home furnishings, among other low-frequency categories, have been phased out, with fresh produce, prepared foods, baked goods, ready-to-eat meals, and Japanese products becoming the mainstay of the store.
On site, Ling Shou saw the fruit and vegetable area, baking stalls, and cooked food area near the main passage. Chinese dishes such as braised noodle dishes, liangpi, stir-fried noodles, and boxed meals were sold alongside sushi, onigiri, sandwiches, and Japanese bento.
The traditional comprehensive model of "big and all-inclusive" is no longer seen. The limited space is now allocated more to food products that can drive daily consumption and repurchases.
However, Wangjing is not lacking in fresh produce.
The new store is less than 500 meters away from Freshippo. Surrounding consumers already have many purchasing channels, including fresh produce, cooked food, and instant retail. For Ito Yokado, which has returned to Wangjing, the old brand can bring attention at the time of opening, but it still needs to use its products to answer a more practical question: why will consumers come again?
At the beginning of 2026, 90% of the equity of Beijing Ito Yokado Wangfujing was transferred to Beijing Xincheng Supermarket Development Co., Ltd., with Ito Yokado retaining 10% of the equity and brand licensing, and the operational focus of the Beijing business has been adjusted accordingly.
From a large store of 17,000 square meters to a supermarket of 1,500 square meters, the change is not just in size.
Ito Yokado retained its brand and some of its product features, but abandoned its past approach of relying on large stores to cover all product categories for consumers.
Remaking regional business
After withdrawing from the Beijing-Tianjin-Hebei supermarket business, YonWo (永旺) has not stopped investing in the Chinese market.
Instead of focusing on filling the gaps left by the closure of stores in North China, it has shifted more efforts to Guangdong and Central China.
As of February 2026, Aeon operates 70 supermarkets in mainland China, with over 40 of them located in Guangdong, accounting for more than half of the total.
Guangdong is one of the earliest markets where AEON has entered mainland China. After years of operation, it has a relatively mature supply chain, store foundation, and brand recognition in the region.
Guangdong has also become one of the most important regions for AEON's adjustment of its store model.
In the second half of 2025, AEON opened three new stores in Guangzhou and Jiangmen. Among them, the Tianhe City store in Guangzhou was renovated and reopened in the form of AEON STYLE. The store area is about one-third of the original comprehensive store, with a product structure focused on high-frequency categories such as food, fresh produce, cooked food, ready-to-eat, and daily essentials.
In Zhuhai, Yongwang plans to take over the original Yonghui Supermarket stores from China Resources Land's Commercial Capital, with a lease term of 15 years. Entering an already mature commercial project can reduce initial investments in site selection, construction, and customer flow cultivation. The official opening time and operational arrangements for the project will be subject to official announcements.
The Central China market has taken on another part of Yongwang's expansion plan.
Wuhan currently has four Aeon Fantasy stores, and the company plans to increase this number to seven before 2030. In November 2025, the Aeon Fantasy Changsha project opened; in April 2026, the Hubei Xiaogan project was announced. According to relevant disclosures, after the opening of the Changsha project, the number of shopping centers operated by Aeon in China increased to 23.
On one hand, North China is withdrawing, while on the other, Guangdong and Central China are continuing to invest.
Yongwang is reallocating its resources to markets it is more familiar with or still has growth potential. Guangdong has a supply chain and consumer foundation, while the central China markets of Hubei and Hunan have a certain amount of room for consumption growth.
And moreover, what Aeon is operating now is no longer just supermarkets.
At its core, the supermarket business is about selling goods, with inventory turnover, gross margin, and losses determining the outcome of operations. Shopping centers, on the other hand, are different - they must first attract people through merchant recruitment and business format combinations, and then generate revenue from rent and commercial operations.
AEON MALL has introduced various business formats, including catering, entertainment, parent-child activities, cinemas, and branded stores, essentially providing consumers with more reasons to visit the mall.
On its Chinese website, AEON expresses its desire to transform shopping venues into "a platform for communication and a space for cultural creation". From this positioning, Dream City is no longer just a larger shopping venue, but is instead moving towards becoming a comprehensive consumption project.
Food retail remains an important part of it.
AEON STYLE stores are reducing the size of their general merchandise areas, allocating more space to food, fresh produce, prepared foods, ready-to-eat items, and daily necessities. The company is also increasing the sales proportion of its private brands, aiming to improve gross margins through differentiated products.
In the first half of 2025, the mainland China division of AEON China saw a slight rebound in gross margin, with the company citing an increase in sales of its private brands as one of the reasons.
Ito Yokado is taking a different path.
Wangjing Huatang Supermarket is operated by Xincen Commercial, with brand licensing provided by Ito Yokado. After Beijing Huatang Ito Yokado completed its equity adjustment, Ito Yokado retained 10% equity and brand licensing. The Asian Games Village store has also started its upgrade and renovation, which is expected to be completed by mid-2027.
This cooperation model reduces the brand's investment in re-entering the Beijing market, and some operational work is also handed over to local companies.
The Sichuan market has retained the traditional comprehensive department store model, with Ito Yokado currently operating 6 stores in Chengdu and Leshan.
It's becoming increasingly common for the same brand to adopt different business models in different markets, a practice that was not very common in the past.
Guangdong, the Central China region, and shopping malls are the focus of investment for YonWo, while in the Beijing market, Ito Yokado is relying on small food stores and local partnerships to reduce the cost of trial and error.
After the traditional large retailers withdrew, regional foundation, product efficiency, and single-store operating capabilities began to become more important than the number of stores themselves.
The new model still faces many challenges
Small shops and shopping malls have changed their business models, but they still can't avoid the most fundamental problem in the retail industry: whether physical stores can continue to sell products and ultimately make a profit.
As commercial supermarkets downsize, the first challenge they face is area efficiency.
After stores are downsized, rent, labor, and equipment costs may not necessarily decrease proportionally. At the same time, the management of food, fresh produce, cooked food, and baked goods waste has become even more demanding.
With limited space, products cannot be displayed too extensively, but sales targets still need to be met. A reduction in space does not naturally translate to improved operational efficiency, and if sales do not keep pace, pressure on sales per unit area will still exist.
Fresh and cooked food can increase consumer purchase frequency, but it also brings pressure on gross margin and loss. Japanese products have unique characteristics, but it is difficult to rely solely on them to support daily customer traffic.
Ultimately, stores still have to rely on high-frequency consumer purchases of local products such as fruits and vegetables, prepared foods, baked goods, and daily essentials to bring customers back time and time again.
For Aeon and Ito-Yokado, this means having to adapt more deeply to the local market.
Different cities have different consumption habits.
From the perspective of consumption scenarios, consumers in the Greater Bay Area are more concerned with fresh, cooked, and instant food needs, while Beijing consumers pay more attention to price, quality, and purchasing convenience. If stores increase Japanese products but fail to simultaneously establish sufficient local food competitiveness, it will be difficult for the brand's characteristics to translate into stable sales.
What's even more troublesome is that competing channels continue to increase.
Miyijia relies on its numerous stores and dense coverage to cater to daily consumption, while Qian Dama focuses on community fresh produce and Jiarong has a foundation in local supply chains for regional chain stores. Meanwhile, discount formats like Boxma NB and Meituan Kuai Le Hou are vying for price-sensitive consumers.
Online channels offer instant delivery, while offline stores compete for in-store foot traffic. As consumers gain more options, stores must clearly articulate their advantages—whether through product differentiation, competitive pricing, or services that save customers time.
These seemingly specific issues ultimately boil down to sales data.
Mengle City faces competition among shopping centers. The opening of a project is just the beginning of construction and recruitment, and subsequent operations also include brand combination, rental rate, passenger flow maintenance, and consumption conversion. Wanda, Wanzhen City, Longhu Tianjie, Wu Yue Plaza, and a large number of regional commercial complexes are all competing for family consumption and local leisure demand.
The typical configuration of shopping centers already includes categories such as dining, cinemas, parent-child activities, and entertainment. Japanese brands and Japanese elements can bring differentiation, but it is difficult for them to constitute long-term competitiveness on their own. Dream City ultimately still needs to convert project traffic into retail, dining, and supermarket consumption.
Verification from Ito Yokado came from its Wangjing store.
New stores can leverage an established brand to draw attention during their opening period. The real challenge comes afterward: whether consumers will keep coming once the novelty fades. That depends on pricing, the quality of prepared foods, fresh produce, and service efficiency.
Consumers may enter a store due to brand memory, but to continue making purchases, it still relies on the products themselves.
The adjustments made by the two companies are actually a change from their previous business logic.
AEON has shifted its focus from the Beijing-Tianjin-Hebei region to Guangdong, Central China, and shopping malls, while Ito Yokado has sought to reduce trial and error costs in the Beijing market through small food stores and local partnerships.
The two companies are gradually abandoning the approach of covering the market through large-scale, multi-category expansion and relying on multiple stores.
For AEON, the foot traffic at Dream City and the repurchase rate of its food stores will be key metrics to watch going forward.
For Ito Yokado, whether the Wangjing and Asian Games Village stores can convert brand awareness into daily sales also requires operational data to answer.
Japanese-funded retailers have not withdrawn from the Chinese market, but the phase of achieving growth through large stores and extensive layouts has become increasingly difficult to replicate.
Next, the remaining companies will need to find a viable business model that balances products, prices, regions, and operating costs.