This article is from WeChat public account: New Retail Business Review (ID: xinlingshou1001) , author: Tianqiao Yun

The vow to “eat a hot pot after resuming work” now seems to be a bit difficult to achieve.

On the one hand, not all work has been resumed nationwide, and on the other hand, the dine-in business in the catering industry is not 100% open.

Taking Haidilao, which has 768 chain stores worldwide, as an example, although it has been announced that it will gradually open the dine-in business from March 12, many stores have only opened up to 80% of seats for safety reasons.

The impact of the epidemic will inevitably make people worry about what performance report Haidilao will hand over in 2020.

However, what is more noticeable is obviously the 2019 annual report released by Haidilao not long ago.

It is expected that in the whole year of 2019, sea fishing will achieve a revenue of 26.556 billion yuan, an increase of 56.5% over the same period last year; net profit will reach 2.347 billion yuan, a year-on-year increase of 43.59%. In the industry, it is a must.

Unexpectedly, as the industry leader, Haidilao’s single store sales and turnover rate indicators in first- and second-tier cities are declining, and it seems that it has reached a platform stage of growth.

In this regard, some insiders believe that “retaliatory consumption” in the post-epidemic era may be able to contribute more revenue to Haidilao in 2020, but Haidilao quietly adopted the strategy of increasing prices of some dishes, trying to reverse situation.

Whether it is retaliatory consumption or the price increase of dishes, the basis must be sufficient passenger flow. Before discussing this topic, it is necessary to look at the opening of the business premises.

Recently, a set of data released by the Cheetah Global Think Tank shows that after the closure of Wuhan on January 23, passenger traffic in shopping malls across the country plummeted, and the average passenger traffic fell by more than 70%.With the resumption of business from March 2nd to 8th, the number of passengers in shopping malls across the country has increased by 42%, but there is still a large gap between returning to normal levels.

Can Haidilao save itself by retaliatory consumption or price increases? Will the crazy shop opening model still work in 2020? What should the future growth of catering companies depend on?

Hai Di Lao after the epidemic

On the evening of March 27, Haidilao in Longhu Tian Street, Liuhe District, Nanjing was very lively. If it was n’t the occasionally empty table, it would be hard to see that this was Haidilao that did n’t take long after the epidemic.

Since the official announcement of Haidilao’s gradual return to business on March 12, this Haidilao will welcome many diners every day.

It is understood that the majority of consumers in the store currently make meals through reservations. For safety reasons, the store only opened 80% of the seats, but the average turnover rate has rebounded to more than 4.

In the past year, Haidilao has opened a total of 308 new stores around the world, of which 125 are located in second-tier cities in China. This store is one of them.

Longhu Tianjie, where the store is located, was opened on December 21 last year, based on multiple factors such as a dozen large communities gathered within 3 kilometers of the radius, and only one Haidilao within 15 kilometers of the radius. .

The waiter Xiaolin is from Henan. After training and internship at a store in Zhengzhou, Haidilao, the company was sent to Longhu Tianjie store to work.

According to Kobayashi, before the epidemic, in addition to reservations, it was common for guests to wait in line for an hour or two during lunch hours and evening meals.

“Haidilao ’s store has a total of 44 items of service. When there are more guests, the work pressure is quite high.” Kobayashi said, fortunately, colleagues like each other encourage and comfort each other like family members, especially when tired, I heard a sentence “Come on, get off work later””, You can become your motivation to keep going.

Despite the hard work, Haidilao ’s employees are indeed well paid. During the training period, wages are not discounted, including food and accommodation. No matter whether you work or rest, as long as you want, all three meals a day can be solved free of charge in Haidilao. After working for 3 months, you can apply to transfer to other stores. During the epidemic, Haidilao also prepared daily necessities for employees.

In terms of accommodation, Haidilao is also not stingy. Opposite the Liuhe Longhu Tianjie store is a high-end community. Haidilao rented a room in this community directly for employees to commute to work. The four rooms, two halls, and two bathrooms are finely decorated. Before the outbreak, there were 4 people in each room, with bunk beds. It felt like a university dormitory.

Haidilao’s substantial investment in employees is finally reflected in the financial report. In the financial report of Haidilao in 2019, the labor cost is close to 8 billion, accounting for more than 30% of the total revenue, an increase of 0.5 percentage points compared with the previous year.

The annual report admits that this is not only related to the increase in individual labor costs, but also inseparable from the rapid expansion of a large number of recruited employees last year.

Sinking market opportunities

In 2019, Haidilao opened a total of 308 stores throughout the year. Except for holidays, Haidilao ran wildly at the rate of opening one store in 1.2 days.

The rapid expansion of catering companies directly brings revenue growth, but behind the growth, services and products are also a test, especially for Haidilao, which is known for its service.

According to the data disclosed in the Haidilao prospectus, the number of restaurant employees (including delivery personnel) accounts for 97.74% of the total number of employees . At present, all employees of Haidilao are about 100,000.68 stores roughly estimate that an average store needs about 127 employees.

According to the speed of store opening in 2019, how can we ensure that every 1.2 days we can enter 127 qualified staff for a new store? In addition to the store clerk, the role of store manager is also crucial.

Haidilao ’s store manager training depends on the apprenticeship of “mentoring belt” In the prospectus, Haidilao made it clear that it would not set a fixed store opening target at the headquarters, but reasonably evaluate the store opening capacity based on factors such as the reserve manager ’s reserve.

However, when the expansion speed is accelerated, it is not easy to find a balance between speed and quality in the training method of the apprenticeship manager.

The feelings are biased and the data will not lie.

When you open the public comment, you can see that the overall service score of this store in Longhu Tianjie, Liuhe is only 3.86 points.

An old Haidilao customer commented: Both the service and the dishes were unheard of. The waiter “ask me three questions” at work; there are also customers who respond that the amount of dishes is too small, Fishing is not the same. ”

Nanjing Xinjiekou Xinbai Store, which is also a new store, has a service score of only 3.99 points. The newly opened Chuan Wanda Store in Huai’an has a service score as low as 3.69 points, which is in line with the general 5 points of Haidilao. Far away.

Haidilao made it clear that the headquarter ’s evaluation indicators for stores are not business performance or financial indicators, but customer satisfaction and employee effort.

In addition to the decline in the service level of new stores, Haidilao’s 2019 financial report also has two key indicators that deserve attention.

One is that the same-store sales growth rate of stores in first-tier and second-tier cities is negative (-0.2% and -1.9% respectively) In 2018, these two figures were 11.7% and 4.3%, respectively. In other words, in the first- and second-tier cities, Haidilao’s revenue from old stores operating for more than 300 days has fallen sharply.

Comparison of same-store sales growth rates in different cities of Haidilao in 2018 ~ 2019

Mapping: New Retail Business Review

Another is the drop in turnover rate. Turnover rates in first-tier and second-tier cities were 4.7 times / day and 4.9 times / day, respectively. In 2018, these two figures were 5.1 and 5.3, respectively. It may not feel like looking at the data alone, but for a Haidilao with at least 100 tables in a store, this number is very impressive.

2017 ~ 2019 Haidilao ’s Turnover Rate Comparison in Different Cities

Drawing: New Retail Business Review

We can make a rough calculation: Suppose a store is located in a first-tier city and has 100 tables. At a turnover rate of 4.7 in 2019, there are 470 tables in a day and 510 tables in 2018. Assuming that each table can generate an income of 500 yuan, in 2019, a store earns less than 20,000 yuan a day, which is 7.3 million yuan a year. The Haidilao financial report shows that in 2019, there are 308 new stores worldwide, including 84 new first-tier cities and 125 new second-tier cities.

Zhang Xingwang, former senior vice president of Xibei Catering, believes that these changes in Haidilao revealed at least three signals.

First, as a large chain catering company with an annual revenue of over 20 billion, Haidilao ’s negative growth actually represents the current status of the entire catering industry. Falling passenger flow is the mainstreamPhenomenon .

Second, the competition for catering in first- and second-tier cities is becoming more and more fierce. Especially in large shopping malls, several floors are full of large and small catering companies, but the number of radiated people cannot increase significantly. The current situation of oversupply will inevitably divert passenger flow .

The third is Innovation in the catering industry is getting harder and harder , and in the process of innovation, higher requirements have been placed on the organizational structure and organizational capabilities of the catering enterprises themselves.

First-tier and second-tier cities tend to be saturated, but there is clearly much room for development in third-tier and below markets.

According to the financial report, although Haidilao ’s restaurants in this market accounted for almost no change in the total number of restaurants, and the unit price of customers is also lower than that of first- and second-tier cities, the proportion of sales revenue is steadily increasing. , From 14.6% in 2017 to 22.5% in 2019.

However, when entering these markets, even if Haidilao has a strong brand foundation, if it cannot ensure that the product and service levels are always online, it will be inevitable to encounter the siege of local brands.

Fuel for the catering industry

Haidilao started as a service, but with the development of more than two decades, the moat of Haidilao is no longer a service. After all, service is the most easily imitated.

In the April issue of Business Review, investor Fan Peng and private equity investment director Yu Jie wrote that the moat in Haidilao is an ultra-low rent and controllable supply chain.

The moat is important for catering companies, but in Zhang Xingwang ’s view, More importantly, catering companies must recognize that digitalization is the future trend , Must go through the digital transformation of the store, Shifting the focus to creating new value for customers. “

How do you understand creating new value for customers?

Sibe does this. In 2018, Sibei began to build an e-commerce platform “selection mall” to sell its own brand of food, kung fu food series and other brand products selected for members.

At the same time, Sibei launched a paid membership system, 299 yuan / year VIP members, including 200 yuan dish vouchers, 60 yuan birthday vouchers and 50 yuan selection mall vouchers.

In addition, VIP members can also enjoy various merchandise discounts in the selection mall. Take Xibei’s organic pure milk as an example, ordinary members purchase 2 boxes for 139.9 yuan, and VIP members only need 99.9 yuan.

“I often buy beef and dim sum from their home now. First, VIP membership prices are really cost-effective. Second, because some things have been eaten in the store, I know the taste better.” At the end of last year, I ate at Xibeimen. Xixima, you can become a VIP member after you wait for the recharge of 500 yuan to recharge. Today, she has formed a consumption habit of shopping at the mall regularly.

In addition to providing catering products and services, catering enterprises provide goods and services for members, which is to create new value. ” Zhang Xingwang believes that the most important point to create new value is to The catering store was transformed into a digital “super store”, breaking the time and space restrictions that consumers must go to the store to consume, and changing the original thinking mode of selling dishes to operating customer relationships.

However, seeing and doing are two things.

According to data, in 2017, the top 100 restaurants in the nation’s catering industry had revenues of more than 200 billion yuan, but they accounted for only 5.04% of the nation’s catering industry. Obviously, small and medium-sized businesses dominate the catering industry.

This status quo makes it very difficult to promote and land digitalization in the catering industry. ThisOn the one hand, the digital transformation requires a large capital investment, but the catering industry itself has thin profits and insufficient motivation to actively invest; on the other hand, catering is a labor-intensive industry, and the degree of fragmentation of information during the manual service process is high. Enterprises are not able to transform themselves.

Therefore, some small and medium-sized catering companies have begun to choose to cooperate with third-party service providers for digital transformation, such as access to local life platforms such as Hungry, Meituan, etc., with the help of standardized tools provided by them to reduce costs and increase efficiency.

According to data, as of 2019, the number of digital services for small and medium-sized businesses in third- and fourth-tier cities has doubled.

Not long ago, the China Institute of Industrial Research’s “In-depth Investigation of the Fast Food Delivery Industry 2019-2025 and the Forecast of the Future Development Status and Trends” analysis believes that with the increasing penetration of online consumption, companies such as catering businesses A large amount of consumption data accumulated in the course of industry development will become one of the assets of the enterprise.

However, in the future, catering companies still need to think about how to extract the value of these data assets after the digital transformation is completed, and continue to provide more “fuel” for the development of the enterprise.

This article is from WeChat public account: New Retail Business Review (ID: xinlingshou1001) , author: Tianqiao Yun