Social cattle and social fears have abandoned Haidilao.

Wen | Bao Bian, author | Zhang Mengyi, editor | Yang Liu.

Five years ago, queuing for a meal was still something worth showing off in the circle of friends; Three years ago, Haidilao’s nail art, shrimp-slippery oil gluten and longevity noodles could still trigger a wave of discussions in Tik Tok. Now, how long has it been since you’ve eaten Haidilao?

Recently, "Why don’t people like to eat sea fishing?" boarded a hot search in Weibo, and under the topic, netizens vomited again and again — — "It’s too expensive, I don’t deserve it." "Some stores in Miaocuijiao are gone, and sometimes there are no baby toys. I feel that the service I bought at a high price has shrunk." "The taste is not competitive compared with the Sichuan-Chongqing hot pot at the same price, so it is difficult to keep repeat customers."

Haidilao, which has lost its freshness and attractiveness, is under tremendous profit pressure.On August 14th, Haidilao released the report card for the first half of the year. The announcement showed that as of June 30th, 2022, Haidilao’s estimated income for the first half of the year was no less than 16.7 billion yuan, a decrease of no more than 17% compared with the same period of last year. The net loss in the first half of the year is expected to be 225-297 million yuan, while the net profit in the same period last year was 96.5 million yuan.

Haidilao, which has always been famous for its benchmark service, is facing many questions from consumers: the service quality is shrinking, the service is embarrassing, and the cost performance is not high. After the brand effect is gone, the future of Haidilao still has a long way to go.

"Due to the impact of the COVID-19 epidemic from March to May 2022, some restaurants in mainland China stopped operating or suspended their meals, and the passenger flow decreased. As a result of the Woodpecker Project, the number of restaurants decreased compared with the same period in 2021." For the huge losses in the first half of the year, Haidilao attributed it to the closure of stores and the impact of the epidemic.

However, Haidilao also said that with the gradual easing of the epidemic, since June 2022, the monthly chain of restaurant operations in China and other regions has obviously improved.

The impact of the epidemic can’t be ignored.In fact, it is not just Haidilao, but the performance of the whole hot pot track in the first half of this year is hardly optimistic.

The profit warning issued by Xiabu Xiabu recently shows that in the first half of 2022, the estimated revenue of Xiabu Xiabu is about 2.16 billion yuan, down 29% year-on-year, and the net loss is expected to be 270-290 million, up about 474.47%-517.02% year-on-year. Jiumaojiu, another catering listed company, expects revenue of 1.899 billion yuan in the first half of the year, down by about 6.1% year-on-year, and net profit of about 55 million yuan, down by 70.4% year-on-year.

In addition to the impact of the epidemic, Haidilao is still in the aftershock of the plan to close the store.Since 2018, Haidilao has expanded at an alarming rate. In 2019, 2020 and the first half of 2021, 308, 544 and 299 stores were opened respectively. By the first half of 2021, the total number of global stores in Haidilao had reached 1,597.

It is worth mentioning that the newly expanded stores in Haidilao are mainly in the sinking market. According to the financial report, in 2020, the number of new stores in the first-,second-,third-and below cities of Haidilao was 65, 167 and 257 respectively. In the first half of 2021, these three figures were 75, 204 and 344 respectively.

However, the consumption power of the sinking market is limited.Consumers in low-tier cities are sensitive to price and insensitive to service.. In the rapid expansion, the management problems of Haidilao are also exposed, such as insufficient number of excellent store managers and insufficient corporate culture construction. These newly opened stores failed to bring "Qian Jing".

The crazy development speed has laid a lot of mines for Haidilao. By June 2021, the turnover rate of Haidilao had dropped from 3 times/day in 2019 to 4.8 times/day, and the profit rate continued to be under pressure. Even Zhang Yong, CEO of Haidilao, said frankly in 2021, "I made a plan to further expand the store in June last year, and now I am really blind and confident."

In November 2021, Haidilao launched the Woodpecker Program and decided to gradually close 300 stores with relatively low passenger flow before the end of the year.Affected by the store closure plan, Haidilao lost 4.16 billion yuan in 2021.

The data shows that in 2021, Haidilao opened 421 new stores and closed 276 stores. In the first half of this year, Haidilao continued to close stores. According to the monitoring data of Jihai brand, Haidilao currently has 1,284 stores nationwide, compared with 1,326 stores in December last year, a decrease of 78 stores.

It is foreseeable that Haidilao will remain in the shadow of closing stores for some time to come, and at the same time, it will constantly adjust the location of stores and open new stores.

Wang Hongdong, an analyst in the catering industry, said: "Unlike the Internet business, offline physical stores can produce immediate results with a little adjustment, which takes a certain period and time.There are no large-scale layoffs in Haidilao, and employees’ wages have to be paid normally, so it takes time to digest. As a listed company, Haidilao still pursues growth, so it will continue to open stores in some good locations, and employees need to be resettled. The existing stores can’t digest so many employees. "

Haidilao was first circled by high-quality service.

Up to now, many consumers are relished about the Haidilao service, such as aprons, hot towels, small rubber bands for ladies, waterproof covers for mobile phones that can be unlocked by fingerprints, fruit platters for free renewal, lemonade, sour plum juice, soybean milk, nail service, birthday face-changing performance, and waiters who play games on behalf of them.

When you eat hot pot alone in Haidilao, the clerk will not only send a bowl of porridge to pad your stomach, but also put a special play doll opposite the seat, and will also give away small desserts and snacks after the meal.

Before the epidemic, consumers were willing to pay for the intimate and warm service of Haidilao, but with the decline of young people’s spending power, people are no longer willing to pay a premium for the service.
In this regard, Wang Dongming, a catering analyst, said: "At present, the situation of the national catering industry is not very good, and everyone’s spending power is declining.When consumers are not short of money, they all demand quality and service. When they are short of money, they only demand price. It used to belong to the industry volume, but now it belongs to the industry downgrade."

More and more people choose to tighten their money bags. Thomas lee used to have dinner with friends in Haidilao, but she only ate Haidilao once this year. That was when the epidemic broke out in Beijing in May, and she stayed in the community for a month. Later, when she saw that the set meal for two in Haidilao was only in her early 100 s, she ate it once at a discount of about 60%.

Thomas lee told Leopard Change,After eating Haidilao, take-out will be given priority, because it is cheaper than the store."Haidilao is not as delicious as Yishengyuan. If it is cheap, I will consider eating it once or twice occasionally."

Consumers who are not rich in pockets are complaining about the price increase of Haidilao. Many consumers have found that Haidilao is quietly raising prices. "The bottom of the pot, Sigongge and beef have all gone up in price. Small materials cost 11 yuan each, and drinks cost 8 yuan. Usually, you only need to be in your early 100 s, but now it costs 150 yuan." "In less than a year, half of Flammulina velutipes has risen from 7 yuan to 13 yuan." "Half of quail eggs have risen from 14 yuan to 17 yuan, and then to 19 yuan."

In the face of quietly rising vegetable prices, consumers can only choose to downgrade their consumption.The financial report shows that from 2020 to 2021, the per capita consumption of customers in Haidilao’s domestic first-tier cities dropped from 116.2 yuan to 111.8 yuan, second-tier cities from 105.7 yuan to 101.7 yuan, and third-tier cities from 100.2 yuan to 95.7 yuan.

Along with the price increase, there is also a decline in service quality. In February of this year, the labeling of customers by Haidilao caused controversy. Some consumers have found that Haidilao labels customers privately in the membership system, which also includes physical characteristics and personality needs. Many netizens believe that this behavior of Haidilao has been suspected of infringing on personal privacy.

A member of Haidilao Jinhai, who lives in Shanghai, also found that a Haidilao service he often goes to has changed: snacks used to be delivered voluntarily, but now this service has disappeared. In the past, you could make an appointment for a manicure after 10 o’clock in the evening, but now it will not work after 8 o’clock in the evening. The enthusiasm of service personnel is also declining. "The food in Haidilao can’t be said to be bad, but it is definitely not the best hot pot. I came here because I want to enjoy friendly service. Isn’t this the original intention of Haidilao?"　

For others, the excessive service of Haidilao makes them feel "social death". On social media, some consumers talked about their embarrassing experience in Haidilao. "I ate a hot pot and asked me back and forth dozens of times. Do I need this or that? I still have to answer no, thank you, so tired." Some netizens even joked that if you hate someone, take him to Haidilao and let employees push cakes, light signs and large photos for his birthday.

Haidilao is increasingly difficult to surprise consumers. Faced with questions such as the lack of product taste characteristics and insufficient innovation iteration speed, in December last year, Haidilao released a number of new menus, introducing new products such as real spicy pot, Haidilao mutton ball, crispy pea tip, crispy tender fried milk and so on, and said that it would be served at least twice a year in the future. Even so, the service, not the product, remains the most impressive thing for consumers in Haidilao.

In this regard, Wang Hongdong believes: "Consumers’ impression of Haidilao still stays in good service, and the presence of products is not strong. Everyone has formed an inherent understanding of the high-quality service of Haidilao.The aura of service is too heavy, ignoring the innovation of products."

He also said that if Haidilao wants to continue to bring freshness to consumers, it can continuously introduce new products, increase investment in product research and development, and continue to emphasize product innovation in publicity. New products and explosive products can also stimulate consumers. Or co-branded with other brands, cross-border marketing has caused some topics, so don’t let consumers feel that Haidilao has no other highlights except services.

In July this year, Haidilao announced that it was considering splitting the shares of super HI Company and intended to go public independently. With the disclosure of the prospectus, Haidilao’s overseas business achievements have also been exposed.

According to the data, by the end of last year, Haidilao had opened 1,443 direct stores around the world, of which 114 stores outside Chinese mainland contributed 2.712 billion yuan in revenue.The contribution of overseas business to total revenue is only 6.9%, and the overall scale is not large.

From this data, we can see that the domestic market is still the focus of Haidilao, and overseas business is only a supplement. Overseas Chinese people love to eat hot pot, so it is very difficult to develop foreigners into hot pot customers. Moreover, overseas stores are generally faced with problems such as unacceptable service, low turnover rate and few local consumers.In the case that the hot pot category is difficult to become the mainstream overseas catering consumption, Haidilao can’t intensively open stores and give full play to the advantages of the supply chain.

For catering groups with online celebrity gene, brand aging is a common problem in the industry. In order to alleviate the pressure of revenue and reduce risks, major catering brands are looking for the second growth curve outside the main brand and creating new explosions. For example, Xiabu Xiabu created its high-end brands, and Jiumaojiu launched Taier pickled fish.

Haidilao is also looking for a second growth curve urgently, but compared with its peers,Haidilao’s road to exploring new brands is not smooth.

In recent years, Haidilao has created more than 10 sub-brands, including Shibajian Noodle Shop, Qin Xiaoxian, Laopaiyouer Noodle Shop, Baibran Private Noodle Shop, fanfan Forest, Wugu Sancan, Mengxiaojiang Rice Noodles, Mrs. Luo’s dumplings, Qiaoqiao’s noodles, and even Omuda, a Japanese food store, involving cheap fast food, snacks, Japanese food, breakfast and other categories.

At present,Four sub-brands in Haidilao have closed stores one after another.Like the main brands, these fast food snacks are highly standardized, focus on low-cost strategies, have a bad taste, are under great cost pressure and are difficult to make a living.

In terms of store management, Haidilao also tries to create other formats besides catering. After launching a new type of pub in August last year, Haidilao started the barbecue ingredients delivery business in March this year, and launched peripheral products such as blind boxes and digital collections.

In mid-June this year, Haidilao set up a community operation division, focusing on the innovation of diversified catering services other than restaurant services, and trying to deploy the core strategy of "home+store". The department is gradually introducing prefabricated dishes and hot pot dishes, such as crayfish, pickled fish, pepper and hemp fish, to cater to the needs of young consumers for "one person to eat" and "two people to eat". In addition, Haidilao also sold its own brand of drinks and craft beer in the store.

For a series of actions of Haidilao, Wang Hongdong believes that the hot pot restaurant in Haidilao has been opened and closed, and it has been closed and opened. In fact, it shows thatThe category of hot pot has its own ceiling, and the largest scale may be about 1000. If you want to open thousands or tens of thousands, it is very difficult.The blind pursuit of scale is actually inconsistent with objective laws. Therefore, it is necessary to make some innovations in business model and store model, transform shopping malls into community stores, and find the second growth curve in order to break through the bottleneck.

In the era of consumption degradation, Haidilao will undoubtedly face enormous profit pressure if it wants to maintain the existing price and provide high-cost service quality. It’s not easy to make a deck and find the second curve. Even if it has become a restaurant head brand that has climbed over countless hills, the throne of Big Brother is not easy to sit on.