The title picture comes from: worm creative, this article comes from WeChat public account: Investment China (ID: China-Venture) , author: Tin animal husbandry
“We have a good life in the industry, what about those bad days?”
It has been more than ten days since the epidemic began to spread on January 21, and there are still no signs of remission. As the epidemic continues and resumption of work after the holidays is approaching, the impact of the epidemic on China’s economy has also begun to appear.
In the “Analysis of the Impact of the Epidemic on China’s Economy and Policy Recommendations” issued by the Evergrande Research Institute on January 31, it is pointed out that demand and production at the macro level have plummeted, and investment, consumption, and exports have been significantly affected. Among them, the tertiary industry services and consumption industries, such as catering, tourism, and movies, are the most affected.
In the seven-day holiday period of the Spring Festival in 2019, the national retail and catering industry sales were about 105 billion yuan. Because of the impact of the epidemic, the report estimates that the retail sales of catering will have a loss of 500 billion yuan in just 7 days.
Jia Guolong, chairman of Xibei Catering, which has more than 400 Xibei Noodle Village restaurants in more than 60 cities across the country, said in an exclusive interview with China Investment Network that at present, 400 Xibei offline stores have basically been closed and only 100 remain. Many takeaway businesses. It is expected that one month before and after the Spring Festival, revenue will be 700-800 million yuan.
What makes Jia Guolong even more worried is that more than 20,000 employees are currently out of work, but according to national policies, wages must continue to be paid, and the monthly expenditure is about 150 million. If the outbreak is not effectively controlled within a short period of time, the cash on Xibei’s account will not last for three months.
“We have a good life in this industry. How was that bad? We loaned money, tightened our belts and paid three months’ wages. What about other brands and other companies?” Jia Guolong said, “You need to know The 30 to 40 million jobs in the catering industry have pushed these people into society. What’s the situation? “
Jia GuoLong believes that the personnel expenses that account for 30% of the cost of an enterprise are the biggest problem that determines the life and death of an enterprise at the moment. On the one hand, he took the initiative to assume the responsibility of the enterprise and raise his employees. On the other hand, he also eagerly hoped that the state could introduce support policies as soon as possible in terms of tax deductions and employee wage subsidies, so that responsible enterprises would not suffer.
On January 31, China Investment Network interviewed Jia Guolong, chairman of Xibei Catering, the following is the content of the interview:
More than 20,000 employees waiting for employment
Zhongzhong.com: Is Xibei’s offline stores still open?
Jia Guolong: Xibei has 400 stores and more than 20,000 employees in more than 60 cities across the country. At present, the dine-in restaurants have basically stopped, and only some of them, such as the stores in big cities such as Beijing, Shanghai, Guangzhou and Shenzhen, we have reserved a part for takeaway. But the amount of takeaway is very small, it can only reach 5-10% of normal revenue.
The first stop was in Wuhan. We have 9 stores in Wuhan. Later, starting from Beijing, Guangzhou, Shenzhen, Guangzhou, Shenzhen, and a little stop, spread to the whole country. Now in Inner Mongolia, our government that sells takeaways has forced its way out.
But after closing, employees staying in the dormitory are also problems.
China Investment Network: How many employees are in the dormitory?
Jia Guolong: Now more than 10,000 employees are in the dormitory. Don’t run around, don’t get infected by others, and don’t let yourself be a source of transmission.
We also have more than 10,000 employees at home. As soon as we started to close, some employees chose to go home. When we get home, we have to care about their mental health.
Investment.com: What is the current mentality of employees?
Jia Guolong: It is still normal. We eat and drink every day, organize learning, and organize entertainment in a limited small area. There are no major problems. But who knows for a long time?
Zhongzhong.com: Nowadays, the society is in short supply of protective materials such as masks. Does Xibei have more than 10,000 employees in dormitories?
JiaGuolong: We started quickly, stocked up a lot, enough. We have a special materials department that buys quickly, but also at high prices. You have to know that there are still (selling) high prices in the middle. An N95 costs more than 30 yuan, and this part costs millions.
Cash flow and payroll won’t last for three months
Investment.com: The Spring Festival holiday is a traditional peak season for the catering industry. According to previous years’ operating conditions, how much can Xibei have during the Spring Festival?
Jia Guolong: I think there should be seven or eight billion yuan this month. Now the business of seven or eight billion yuan suddenly becomes zero, and the input is gone, and you still have to pay.
China Investment Network: What are the main costs involved?
Jia Guolong: In our cost structure, raw materials account for 30%, but this is equal to money, not loss. The overall labor cost accounts for 30%, which is the big head. The remaining rent is 10%. There are also tax costs of about 6-8%.
One of the biggest variables is the overhead. However, national policies stipulate that these people must be paid for their holidays. We also recognize that we, as a responsible brand, also want to be better to our employees.
But there is no problem in the short-term. We pay 156 million yuan a month, more than three billion yuan in two months, and four or five billion yuan in three months. Which company has so much cash flow?
Zhongzhong.com: How much cash does Xibei have now? If this situation is difficult to improve in the short term, how long can it sustain?
Jia Guolong: Our cash flow is based on the limit of payroll. We do n’t have a lot of loans right now. Even if the loan is paid, we do n’t think it will last for three months.
Your year’s payment was paid, the bonus was over, and many cadres were paid at the end of the fourteenth salary. We don’t save much cash, because we know that the New Year’s Eve is the peak business period, and the cash flow returns immediately. We have so much inventory, can we realize it as soon as we sell it? Then pay wages into the cycle.
It is abruptly stopped. Suddenly the business stops and everything stops, but the personnel expenses cannot be stopped. This is not foolish.?
When we were not in crisis, we were quite bullish, and said that we did not lack money and had sufficient cash flow. The crisis came, and suddenly found that the cash flow could not be carried at all, and it was consumed in one month, two months, and three months.
Originally we said that the cash flow industry is bullish, do n’t need financing, do n’t want funds. We ca n’t run out of bank loans. Give us a credit and we use half of it. Now I find that it is no longer possible. As soon as I settle the account, we can’t carry it even for three months.
We have a good life in this industry. We loaned money and tightened our belts to pay three months. What about other brands and other companies? I can only forget it, I won’t pay anymore, can I dissolve? Dismiss employees for (only) .
You have to know about 30 to 40 million jobs in the catering industry, and push these people to society. What is the situation?
Investment.com: Xibei was established as early as 1988, and there were already five stores in Beijing during the SARS period in 2003. How did you respond then?
Jia Guolong: During SARS, our company had five or six hundred employees, and it was closed. The employees left happily. We rented two buses and sent back employees from more than 100 townships. Because it was from an epidemic area in Beijing, it was forced to be quarantined by the government for half a month. During the quarantine period, the government controlled it.
After the quarantine, all of our employees went home without any problems. In May, they were notified to resume business. They bought train tickets and returned to work.
During these business suspensions, these employees were unpaid, and they accepted them. They felt normal. The government also feels reasonable, and that’s it.
The situation of China’s economy at the time was also different than it is now. SARS has lasted for so long, and there is still a 9% increase. Now the overall economic situation is going down, and our scale is also large. The proportion of labor costs has increased from 15% to 30%.
Employees had been on vacation before, but now they ca n’t, and they have to be paid. The difference is too great. But we have to take responsibility. If we start to lay off employees or even push all employees to society, willn’t it be troublesome? Isn’t this a factor of social instability?
But we have taken responsibility. In fact, the government should finally take the bottom. In particular, those “stupid policies” can no longer be issued-twice as much wages will be paid during the epidemic defense. becauseAfter crushing our businesses, social unrest came. If there is a large amount of unemployment, people will have no income and their purchasing power will be seriously insufficient. Is this not the economic crisis?
Don’t let good people suffer
Invest in China.com: What policies do you expect from the government to ease the difficulties facing the catering industry?
Jia Guolong: It is said that the bank is going to cut interest rates recently. There is room for real tax exemptions and reductions. For example, all taxes in 2020 will not be collected. This space is large and can make up for some of our losses during the epidemic prevention period.
I do n’t know if the country has any good way to pay the employees.
Everyone should take on some, enterprises take on some, countries take on some, organizations take on some, and individuals take on some.
This is back to the question of good people doing business. What is a good person? Responsibility is good. Responsible for employees, I do not sever employees, pay wages as well; be responsible to customers, make safe and reliable food; be responsible to the country, run the enterprise well, and raise the employees.
But if we are responsible, we need to support the country at a critical time. If the country does not support it, then ultimately responsible companies and good people will suffer.
Touzhong.com: Many mall properties have also introduced measures to reduce rents and exemptions for tenants. Is this a big support?
Jia Guolong: (Now) It ’s not that we are going to suspend business, it ’s the landlord who wo n’t let you open your business, of course The state will not let the mall open. But now the landlord says that we will give you rent reduction or exemption. When will we give you one month’s rent exemption? You must exempt it. It was you who let me go out of business, and you still paid me for the rent.
This thing can’t be fooled by real estate agents.
Investment.com: What is the most important thing for Sibei now?
Jia Guolong: It is (I hope the government) Live, we take care of our employees, do n’t run around, do n’t get infected, do n’t become a communicator, that is the biggest contribution to the country.
Let’s say that the fifteenth day of the first month is a node, and March 1 is another node, to see what will happen after that.
We do our best to carry it first, and we will talk about it the day we ca n’t carry it. When can’t I carry it? Who knows. How big is the endurance of a person, how big is the endurance of an enterprise, what will happen in the process, these variables are too many, don’t make such accurate calculations, now it is enough to work hard to do what is right now.
This article is from WeChat public account: Investment China (ID: China-Venture) , author: Tin animal husbandry