Haidilao, which fell into store closures and losses during the epidemic, created a business miracle in the first half of this year, and the net profit for half a year was close to the net profit of 2019.
On August 29, Haidilao announced its interim results for the year ended June 30, 2023. In the first half of this year, Haidilao achieved revenue of 18.886 billion yuan, an increase of 24.6% over the same period last year; The net profit was 2.259 billion yuan, compared with a loss of 267 million yuan in the same period last year.
This is less than two years after Haidilao announced the closure of about 300 stores. At the end of 2021, under the dual pressure of bottom-stalling and repeated epidemics, Haidilao announced the closure of some stores and launched a "Woodpecker Plan" aimed at internal management and assessment reform and improving business conditions. During this period, Daniel Zhang, who single-handedly created the business empire of Haidilao, also handed the CEO baton to Yang Lijuan.
Now, Haidilao has finally come out of the quagmire of losses. For the reasons for the reversal of adversity, Yang Lijuan gave two reasons centered on "industry" and "people": "In the first half of this year, the recovery of passenger flow is obvious, and we must be more calm and bring high-quality services to customers with higher and stricter standards; We have a team with strong fighting power and strong execution. All changes in performance and improvement in experience are actually realized by every Haidilao employee, every frontline waiter, and every store manager. ”
After "fishing" himself out of the seabed, the confidence inside and outside of this hot pot giant is constantly strengthened, and the entrepreneurial spirit of Haidilao has been continuously sublimated - under the support of a series of organizational structure optimization and refined management of stores, the fighting spirit and creativity of all employees "love to toss, dare to toss, and can toss" began to be maximized.
The performance picked up, and hot searches were frequent
To be able to reverse adversity, Haidilao has mainly done two things: rational store opening and extension of services and products.
The biggest crisis that Haidilao encountered before was caused by the rapid expansion strategy brought about by the wrong judgment. In 2021, 260 Haidilao restaurants were closed and 32 restaurants were temporarily closed. In 2022, Haidilao closed another 50 underperforming restaurants. Now, in the matter of opening stores, Haidilao is more cautious. As of the first half of 2023, Haidilao operated a total of 1,382 Haidilao restaurants, a net increase of 50 stores compared with the same period last year.
Haidilao revealed at the shareholders' meeting in June 2023 that for the restart and expansion of stores, Haidilao maintains a "cautious + optimistic" attitude, and through the calculation of the cost of the entire operation, management and other aspects, it is arranged by the company in combination with the reserves of personnel and funds.
With the optimization of stores and the improvement of efficiency, the operation level of Haidilao has improved significantly. In the first half of this year, the customer flow of Haidilao restaurants began to recover, receiving more than 170 million customers in total; the overall turnover rate rebounded to 3.3 times per day, and the same store turnover rate was 3.5 times per day; With the resumption of dine-in, the delivery business achieved revenue of 470 million yuan, a year-on-year increase of 5.2%; Raw material and consumables costs decreased from 42.7% in the first half of 2022 to 40.7% in the same period in 2023.
But "bottoming out" is not all Haidilao's labels this year. In the past, Haidilao has always been known for its thoughtful services such as birthday wishes and manicures. At present, Haidilao is still trying its best to create the atmosphere of its stores to attract young consumers, including using free buses to attract customers after the concert; setting up concert "breakout venues" in stores; Jointly launched the "Happy Continuation Program" with the ticketing platform; After the "frozen rose" exploded in the tea drinking circle, Haidilao also followed the popularity, as long as consumers brought their own roses into the store, they would provide transparent cups and ice cubes for free; Innovative services such as setting up stalls in night markets and piloting hair washing have also been on the hot search many times.
In August this year, Haidilao also opened the country's first Haidilao beef workshop in Shenzhen Excellent Store, where fresh beef is delivered to the store within 4 hours, focusing on a series of new products of 10 eaten by one cow.
It can be seen that Haidilao is constantly spending money on marketing and scene expansion, and they hope to get a piece of the tide of consumption recovery. At the same time, Haidilao is also continuing to convey its business philosophy of "putting down your body", from birthday services to nail art, concert "fishing for people", to setting up stalls and washing hair, constantly providing consumers with emotional value, and deepening the mentality of "as long as consumers can't think of it, no haidilao can't do it".
Boldness and decentralization of decision-making
"We made a mistake before, in the past because the business was particularly good, I was always influenced by foreign fast food chain brands. For the standardization of chain catering enterprises, although it is not well summarized, it will cater to it in behavior. ”
This is a sentence that Daniel Zhang said to the participating shareholders at the recent Haidilao shareholders' meeting. "Expansion through standardization" has long been seen by Haidilao as the only way to achieve scale – the first 100 stores of Haidilao took 20 years, and as of the first half of 2023, the number of stores has reached 1,382.
But Daniel Zhang be honest, in terms of store decoration, food innovation, etc., because of factors such as operating costs, standardization and food safety, some personalized services in stores are often limited. However, he said that at the beginning of this year, Haidilao adjusted the authority for products to be put on and off the shelves, and store managers and regions can adjust menus according to local needs.
After repeated adjustments, Haidilao began to change its course in its management model. In the first half of this year, an obvious change in Haidilao was that Haidilao began to promote the reform of the regional system, directly delegating decision-making power, so that the region can do more localized and personalized attempts in products and operations.
According to the financial report, at present, all stores of Haidilao are in accordance with the regional small management radius, and 19 regional coaches are responsible for it. In addition, the independent evaluation of employee performance is the responsibility of the performance team and full-time functional departments such as food safety and health to ensure the triangular structure of referees, coaches and athletes.
Under the regional system reform, Haidilao is no longer applying the same set of standardized product and service templates across the country, but balancing growth and risk in different regions, giving each region greater business freedom. The functional departments of the headquarters will empower the Haidilao regional market and provide various targeted solutions to help the personalized innovation of the region quickly land. This also means that Haidilao is further encouraging internal innovation in the form of organizational reform.
Under the new mechanism, regional coaches can exercise more dominance based on regional characteristics, such as the situation of the business district, the store's own budget, the cost and benefit of the region, etc., so as to give the region greater autonomy to gain insight into the market and grasp consumer demand. For example, since the beginning of this year, Haidilao has delegated the authority to put products on and off the shelves, and store managers and regional coaches can adjust products and services according to local needs.
The adjustment of the organizational structure has also made it easier to implement the personalized service of the store, and the personalized and regional attributes of Haidilao on the product side have begun to be highlighted. According to the financial report, Haidilao launched 9 new products in the first half of the year, and as many as 143 special products were listed in the region, such as sugar gourd and sugar man in Beijing, crayfish fried rice in Suzhou, and hot pot oysters in Guangdong.
Haidilao has provided more personalized services through a series of internal adjustments, while also constantly consolidating its status as the "hot pot brother".
In recent years, the domestic catering industry has changed rapidly, consumer demand has become more diversified, and competition between hot pot brands has become fierce. Over the past decade, Haidilao has been a sample of China's catering industry, and its various service "myths" have generated strong appeal, but on the other hand, they have also raised the threshold of customer surprise and satisfaction.
In other words, it is becoming more difficult to get employees out of the process and let customers have an experience that exceeds expectations in Haidilao. Under this circumstance, a series of innovations driven by today's regional system reform have effectively made up for this lack.
The further release of the attribute of "love to toss, dare to toss, can toss"
Another reason behind it is that Haidilao pays more attention to releasing front-line innovation vitality, listening to the voice of consumers, returning to and sublimating the entrepreneurial spirit of Haidilao, and further stimulating the attributes of employees "love to toss, dare to toss, and can toss".
In addition to delegating power, giving regions greater autonomy to gain insight into the market and grasp consumer needs, Haidilao has also turned store managers into "partners" by improving the piecework wage system and modifying the wage system "low base salary and high commission", which not only stimulates the potential of store managers, but also enhances the combat power and enthusiasm of grassroots employees, and improves the overall income level of employees. Institutionally ensure the vitality of the frontline.
At the same time, Haidilao continues to advocate a corporate culture of "being kind to people", guiding employees to think differently, proactively understand and respond to customer needs, and reward employees for innovation. After completing a series of reforms, the gene of "love to toss" of Haidilao employees has been further activated.
This change is effective and eventually transmitted to the terminal link of Haidilao.
Huo Yihui, manager of a Haidilao store in Taiyuan, was awarded the Grand Innovation Award for launching "Frozen Rose" in July this year.
Regarding the origin of frozen roses, Huo Yihui told a small story. In March this year, a lady came to the store, Huo Yihui found that she was depressed, from entering the store to sitting down, without saying a word, Huo Yihui tried to communicate with her, but was politely refused, but not long after, the female customer began to cry alone.
In order to comfort the female customer, Huo Yihui thought of flowers, she found small daisies, moon seasons and some small grass to decorate from the kitchen, put them in a milk tea cup and added ice cubes, sealed them, accompanied by a card with "I hope flowers can make you feel happy", and quietly put them on the seat of the female customer, and the other party was very moved. Later, Huo Yihui further improved this small gift, she replaced the flowers in the cup with roses, and gave them to customers who came to eat, which became a unique "romance" in her store.
In Huo Yihui's view, all this comes from his own attention to customer satisfaction and from his careful observation of customer needs. "Some subtle services can bring a touch of warmth to customers and make customers satisfied with our service, which I think is worth it." She said.
At present, this kind of behavior of encouraging employee innovation has become a regular mechanism in Haidilao: every month, Haidilao will evaluate and screen the basic innovation of regional coaches, functional departments and stores, and review the effect of innovation use, and finally screen out a number of excellent innovation cases.
There are many more initiatives that Haidilao has taken to bring customers closer. In April 2023, Haidilao held a "huddle meeting" in Dujiangyan, Sichuan, inviting more than 600 "Black Sea" members to participate for the first time, during which more than 30 executive-consumer dialogues were held to listen to customers.
At the previous performance communication meeting, Haidilao also revealed that it improves efficiency through digitalization and hopes to free up manpower to do more important things - improve customer satisfaction. Haidilao believes that front-line employees are the ones who understand consumers best, and it is up to them to combine the specific actual situation and find ways to get close to every consumer, "catch customers table by table", and achieve deep connection with consumers.
One possible change brought about by bringing frontline employees closer to consumers is that Haidilao no longer uses the same set of standardized product and service templates to apply to the whole country, but can quickly launch more distinctive services and products according to the needs and regional characteristics of consumers in different regions.
On the other hand, in order to enhance the enthusiasm of employees, Haidilao has been working hard to defend employees' rights and improve employees' happiness.
Since 2005, Haidilao has begun to provide education subsidies to employees' children, and in 2007, it has been clarified in the system and continues to this day. In 2019, Haidilao launched a parent-child companionship program to encourage employees to take their children with them and give certain subsidies such as education and rental every month.
At a time when concepts such as central kitchens and prepared dishes are dominating and the industry is constantly pursuing standardization and expansion, Haidilao has begun to achieve self-return and transcendence in a series of reforms. This is also an important reason why Haidilao can win this turnaround battle in 2023, when the industry as a whole recovers.