China county-level food-and-beverage value retail: County-consumption policy could accelerate low-tier expansion for China’s value retailers

Overview

The report assesses policy support for county-level consumption in China and its implications for food-and-beverage value retailers with deep lower-tier penetration. Goldman Sachs sees the measures as a meaningful structural tailwind for county expansion and reiterates Buy on Busy Ming and Fujian Wanchen Food.

Core views

On 18 August, the Ministry of Commerce and eight other ministries issued 18 measures intended to stimulate lower-tier market vitality and county-level consumption. Goldman Sachs argues that the policy directly supports food-and-beverage value retailers’ county expansion by upgrading local retail channels and infrastructure, encouraging branded chains and value formats, and reducing operational barriers. Relevant provisions include simplified supermarket and convenience-store approvals, “one license, multiple outlets” within an eligible county, and encouragement of longer leases for state-owned commercial properties. The report also highlights supply-side support. The policy encourages more high-quality and value-for-money goods, flexible localized supply, and private-label development, which Goldman Sachs considers aligned with value retailers’ localized, demand-driven assortments and private-label strengths. It further promotes centralized procurement and distribution centers, warehouses, cold-chain facilities, and land-use support for in-house supply chains. Support for events, sports, night-time culture and tourism, online-offline integration, fiscal and financial measures, employment, and income growth could broaden traffic, spending occasions, and local purchasing power. Goldman Sachs frames counties as a substantial consumption base: China had about 1,870 counties in 2024, representing roughly 50% of the national population and about 40% of GDP. The leading 100 counties, despite accounting for less than 2% of land area and around 7% of population, contributed about 10% of national GDP; 62 had annual GDP above Rmb100bn as of 2024. In 7M26, rural retail sales of consumer goods rose 2.4% year on year, 1.3 percentage points faster than urban areas. This marked the 55th consecutive month in which rural growth outpaced or broadly matched urban growth, while county and township markets accounted for 39.1% of total retail sales, up 0.3 percentage points year on year. The report attributes county consumption momentum to policy-backed industrial development, income growth and urbanization; improving logistics and delivery; deeper short-video and content-commerce penetration; and relatively resilient household spending. These shifts have lowered distribution costs and improved access to products. Consumer demand is also moving beyond pure price sensitivity toward value for money combined with quality of life, particularly among consumers aged 20–40. Goldman Sachs expects this to favor localized assortments, faster replenishment, omnichannel retail, standardized chains, brand strength, and efficient supply chains. Store-density analysis indicates both proof of demand and remaining white space. At end-2025, the top 20 counties by store count had snack-discounter density of about 1.5–2.5 stores per 10,000 people, compared with below 1 nationally; a related exhibit cites a 0.5 national average. Yet many counties remain underpenetrated. Snack discounters are already dense in East and Central China, while North, Northwest and Southwest China retain relatively low absolute store counts despite high coverage. Based on GeoQ income and social-retail-sales data, the report identifies East China, including Shandong, Zhejiang and Jiangsu, as leading potential clusters for further penetration. It also notes runway in Southwest and North regions, where most counties have fewer than the national average of 14 stores per county. Goldman Sachs notes that county retail is predominantly community-based: community stores account for over 80% of county-level outlets, while malls represent only 6%, versus a 14% overall average. This supports neighborhood-oriented site selection. The firm states that 47% of chained food-and-beverage value-retailer new openings were in counties in 2025 and that 1H26 saw accelerating county openings. It attributes attractive lower-tier unit economics to lower rent-to-sales ratios, larger formats, and more price-sensitive consumers. The policy could therefore ease franchisee recruitment, including switches from other chain formats, accelerate rollout by existing franchisees, and improve supply-chain refinement and private-label development. Goldman Sachs believes value retailers may benefit more than supermarkets and convenience stores because of their stronger value proposition and more attractive franchisee economics. The firm reiterates Buy on Busy Ming, valued at 13x 2027E adjusted P/E based on Goldman Sachs estimates of Rmb5.6bn adjusted net profit, and 17x 2026E adjusted P/E based on Rmb4.3bn. It also reiterates Buy on Wanchen, valued at 12x 2027E P/E based on Rmb3.3bn net profit and 15x 2026E P/E based on Rmb2.6bn.

Analysis framework

Goldman Sachs links the policy measures to retailers’ operating mechanics—store approvals, leasing, franchise recruitment, product assortment, and distribution infrastructure—then tests the opportunity using county economic scale, rural-versus-urban retail-growth comparisons, store-density data, geographic footprint analysis, and channel checks. It applies the resulting expansion and unit-economics logic to its covered value retailers and their earnings-multiple valuation.

Methodology notes

• Industry AnalysisSupply-demand framework

  County-level retail supply-demand analysis

  The report combines evidence of rising county consumption demand with policy support for stores, logistics, supply chains, and localized product supply to explain why value retailers may expand faster.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Policy-to-retailer operating transmission

  The analysis traces how policy changes to approvals, leases, procurement, warehousing, cold chain, and purchasing power could flow through to franchise recruitment, store rollout, and private-label development.

• Valuation methodsP/E and PEG Valuation

  Forward P/E valuation

  Goldman Sachs presents Busy Ming and Wanchen valuation multiples against its 2026E and 2027E net-profit estimates.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Busy Ming Group

  Goldman Sachs identifies Busy Ming as a potential beneficiary of county-level value-retail expansion and reiterates Buy.

  Strengths

  Deep low-tier penetration, value-for-money proposition, and potentially favorable franchisee unit economics in lower-tier cities.

  Comparison

  The report believes food-and-beverage value retailers may benefit more than supermarket and convenience-store formats.

• Fujian Wanchen Food

  Goldman Sachs identifies Wanchen as a potential beneficiary of county-level value-retail expansion and reiterates Buy.

  Strengths

  Exposure to value-retail growth, localized assortments, and supply-chain/private-label development opportunities.

  Comparison

  The report believes food-and-beverage value retailers may benefit more than supermarket and convenience-store formats.

Key data

• County countc.1.87k countiesChina had approximately 1,870 counties in 2024.
• County share of population and GDPc.50% of population; c.40% of GDPCounty-level regions’ contribution in 2024.
• Rural retail-sales growth2.4% YoY in 7M261.3 percentage points faster than urban retail sales.
• County and township retail-sales share39.1%Up 0.3 percentage points year on year in 7M26.
• County-opening share47%Share of chained food-and-beverage value-retailer new openings in counties in 2025.
• Top county snack-discounter density1.5–2.5 stores per 10k populationTop 20 counties at end-2025, versus below 1 nationally.
• Busy Ming valuation13x 2027E adjusted P/E; 17x 2026E adjusted P/EBased on Goldman Sachs adjusted net-profit estimates of Rmb5.6bn and Rmb4.3bn, respectively.
• Wanchen valuation12x 2027E P/E; 15x 2026E P/EBased on Goldman Sachs net-profit estimates of Rmb3.3bn and Rmb2.6bn, respectively.

Impact & implications

Goldman Sachs believes the policy package can reinforce a favorable expansion environment for food-and-beverage value retailers, particularly in counties where demand momentum, white space, community-store formats, and lower-tier unit economics support chain penetration. The firm expects the measures to help franchise expansion, supply-chain development, and private-label capabilities, benefiting its covered value retailers.