Objective To simultaneously identify consumer segments based on individual-level consumption and community-level food retail environment data and to investigate whether the segments are associated with BMI and dietary knowledge in China. Design A multilevel latent class cluster model was applied to identify consumer segments based not only on their individual preferences for fast food, salty snack foods, and soft drinks and sugared fruit drinks, but also on the food retail environment at the community level. Setting The data came from the China Health and Nutrition Survey (CHNS) conducted in 2006 and two questionnaires for adults and communities were used. Subjects A total sample of 9788 adults living in 218 communities participated in the CHNS. Results We successfully identified four consumer segments. These four segments were embedded in two types of food retail environment: the saturated food retail environment and the deprived food retail environment. A three-factor solution was found for consumers’ dietary knowledge. The four consumer segments were highly associated with consumers’ dietary knowledge and a number of sociodemographic variables. Conclusions The widespread discussion about the relationships between fast-food consumption and overweight/obesity is irrelevant for Chinese segments that do not have access to fast food. Factors that are most associated with segments with a higher BMI are consumers’ (incorrect) dietary knowledge, the food retail environment and sociodemographics. The results provide valuable insight for policy interventions on reducing overweight/obesity in China. This study also indicates that despite the breathtaking changes in modern China, the impact of ‘obesogenic’ environments should not be assessed too strictly from a ‘Western’ perspective.