It will take time for the catering industry to recover.
The price increase of Haidilao is helpless.
“220+ per capita, 13 yuan for half a piece of potato chips, 1.5 yuan for a piece of potatoes, and a self-service seasoning for 10 yuan each … Not only is the amount less, the price is still up.” Many netizens complained on Weibo Road. For this, Haidilao has publicly responded that the total price increase is about 6%, and different stores and cities have different pricing plans.
However, due to the increasing downward pressure on the macro economy, people are forced to reduce optional consumer spending, and consumers’ tolerance for price increases is also lower. Many netizens expressed their difficulty in accepting Haidilao’s price increase. Therefore, Haidilao publicly apologized on Weibo yesterday afternoon. After the release, the letter of apology quickly posted on Weibo. Haidilao officials said that the pricing will be restored to the standard before the shutdown on January 26.
For the price increase, Haidilao had previously explained the reasons. After the epidemic, Haidilao, which relied on more than 90% of its income from dine-in food, could not quickly recover its hematopoietic capacity, and the costs of employees ’salaries and food ingredients were also increasing.
Compared with other hot pot brands, Haidilao’s service has been well received. In order to maintain the service level, it is basically impossible for Haidilao to lower the wages of employees. Compared with 2019, the prices of ingredients such as beef and mutton are still volatile.
So. For Haidilao, price increases are the easiest way to maintain profits.
There are many reasons for the price increase. Haidilao officials only said a part.
From the 2019 annual report released by Haidilao last month, there are two negative signals worth noting. The turnover rate of Haidilao and the same-store sales growth rate both declined. The turnover rate fell from 5.0 times / day in 2018 to 4.8 times / day, and the same-store sales growth rate in first- and second-tier cities fell from 4.3% to -1.9%. The unit price of passengers in first- and second-tier cities still maintained a slow growth.
In general, Haidilao ’s expansion in first- and second-tier cities has reached a bottleneck. Individual customers consume more than before, but passenger traffic is decreasing. In order to maintain growth, Haidilao must actively adopt a sinking strategy. Haidilao did the same in the past. In 2019, Haidilao opened a total of 302 restaurants, and 77 new cities were added in third-tier and below-tier cities.
The sudden epidemic attacked the sinking strategy of Haidilao. In order to maintain the hematopoietic capacity as much as possible, Haidilao began to shrink the front quickly. Today, when the epidemic prevention and control situation is still grim, rapid expansionBut it cannot bring about an increase in income, but will increase costs because store rents, food ingredients, employee salaries, and interest are all rigid expenses.
Incremental income is difficult to obtain. Haidilao will start from the stock. The price increase also shows from the side that Haidilao’s management is very confident in their brand.
But contrary to expectations, as strong as Haidilao, we must also follow the principle of customer wei xia. In the dissatisfaction of customers, Haidilao had to give up retaliatory price increases.