During the epidemic, many media were mentioning a concept of retaliatory consumption. However, it is unexpected that retaliatory consumption did not come, and retaliatory price increase came first.

According to a small ticket issued by a Beijing diner on the Internet, the price of Haidilao rose sharply after opening the dine-in meal. Half of the blood went from 16 to 23 yuan, eight small slices; half of the potato chips were 13 yuan, and one piece of potatoes 1.5 yuan, 10 yuan per person for self-service seasoning; 7 yuan per bowl for rice; 50 yuan per plate for small crispy pork.

The response from Haidilao is that the price has indeed risen: because of the epidemic, there are still restrictions on the number of restaurants and the number of customers received after the resumption of business in Haidilao. The flow of people is not too fixed; the second is the cost problem. The locations of stores are different and the consumption levels are different, so the increase is different, and the overall control is about 6%.

Haidilao ’s reply makes sense, but netizens do n’t buy it. Many people are dissatisfied with Haidilao ’s anti-market price-rising behavior. The public commented on “Haidilao ’s price has risen. Would you still eat it? “?” The questionnaire shows that nearly 80% of users choose “no food”.

On the evening of April 10, Haidilao officially apologized, saying: The price increase was a wrong decision of the company ’s management and hurt the interests of Haidilao ’s customers. We are very sorry for this. As of now, the prices of food in stores in mainland China have returned to the standard before the store closed on January 26 this year.

It seems that Haidilao itself has realized the error of price increase, so why is Haidilao’s price increase way wrong?

01 Economics of the price increase of Haidilao

From an economic point of view, there is no problem with Haidilao’s price increase. The revenue of a hotel is the customer’s unit price multiplied by the turnover rate.

Before the CITIC Jiantou Research Report, it was judged that the epidemic caused a loss of about RMB 5.04 billion in Haidilao ’s revenue in 2020, and the loss of net profit to the mother was about RMB 580 million. If Haidilao, which has been closed for more than a month, wants to make up for the loss of profits, either increase the turnover rate or increase the unit price of customers.

The turnover rate of Haidilao has gradually decreased to about 4.8 last year. This data cannot be increased. On the contrary, due to the low number of open seats during the epidemic, the density of in-store dining decreased, and the total number of turnovers will definitely decrease. Therefore, Haidilao can only make up for the loss by raising the price.

Generally speaking, once the price of goods rises, the consumer population will also fall. But over the years, Haidilao has established a relatively strong brand moat, and its brand premium ability is high. It is normal for Haidilao to queue for more than 1 hour. Therefore, although the price increase will allow some consumers to vote with their feet, the total number of Haidilao consumer groups is large, so the number of consumers in a single store will not decline significantly.

The same is true. After dine-in, Haidilao still needs more than 1 hour to wait in line. It seems that consumers still cannot escape the law of true fragrance.

I do n’t talk about eating, but my feet are honest. Does Haidilao’s price increase really have no negative impact? But in fact, it’s not.

02 irrational consumers damage Haidilao brand

As mentioned above, merchant price increases are an economic issue. Merchants themselves will measure the pros and cons of price increases. Since they have made price increase decisions, in terms of sales, he must think that the benefits outweigh the disadvantages.

For rational consumers, after measuring the price, he will vote with his feet. Those who are willing to go to Haidilao naturally feel that the price increase is worthwhile. Those who are not willing to go will choose other restaurants. But the problem is that consumers are often irrational. This irrational quality will greatly damage the brand image.

  • Form the “stain memory” of the brand


    During the epidemic, many people were isolated at home. They had been thinking about eating a meal of Haidilao for a long time. I wanted to eat a retaliatory meal after the epidemic eased.

    Many netizens associate the price increase in this special period with “making a country difficult to make a fortune” (although this cannot be linked to “making a country difficult to make a fortune”, but irrational consumers always love this connection), and This hat is buckled up, and the enterprise has one more original sin.

    Consumers have a memory of a brand. Haidilao has built a brand memory of “universal Haidilao” among consumers because of its high-quality service. However, this price increase has diluted the previous memory and formed The “stained memory” in the minds of consumers.

    The price increase Haidilao gave consumers the impression that “you increased the price when I needed you most”, this “smudge memory” will affect the brand’s image in consumers’ hearts for a long time. .

    • The joint impact of the brand


      After Haidilao’s price increase, some netizens dug out some information about Haidilao’s chairman Zhang Yong. Zhang Yong had already immigrated to Singapore in 2017. In 2019, Zhang Yong also paid $ 13.8 billion for Singapore’s richest man. . Because Singapore exempts overseas income, this move avoids the tax risks that China may face after the implementation of the new anti-avoidance tax. Therefore, some netizens commented that “when making money, they are Chinese, and when making money, they are foreigners.”

      Xunkong does not comment on this. What I want to explain is that when an enterprise is pushed to the cusp because of a negative, there are always omnipotent netizens who will dig out all kinds of bad news in its history. The effect doubles the loss of the brand.

      03 Correct price increase strategy

      Product price increase is a normal behavior in business operations. Haidilao’s online condemnation is because it raises prices in the wrong way at the wrong time, which has a negative impact on the brand. If Haidilao handles the price increase, maybe it does n’t need to be so