Judging from the figures written into the financial report, many hot pot brands are "cutting prices". In 2023, Haidilao's per capita consumption will fall below 100 yuan, leaving only 99.1 yuan. Xiabu Xiabu's Xiangxiang hot pot, the per capita consumption also dropped from 150.9 yuan to 142.3 yuan.
However, when it comes to the feelings of consumers, the atmosphere of "price reduction" is not obvious, but the shrinkage of dishes is believing. Zi Ling said that she could accept that the hot pot restaurant should raise its price appropriately because of the rising operating costs, "but if it does not only increase the price, but also the amount of food is getting smaller and smaller, it will make people feel too much."
Once upon a time, diners would say "there is nothing that can't be solved with a hot pot". But now, the high-priced hot pot of 150 yuan or even 200 yuan per capita has made the workers exclaim "can't afford it".
Text | Zheng Sifang
Interviews | Zheng Sifang, Guo Siwen
Edit | Shinno
Operations | Puffs
Popular hot pot, secretly reduce costs
Three months have passed, and Zi Ling still can't forget the impact of the hot pot meal at the beginning of the year. It was in a Banu hairy belly hot pot in Zhengzhou, she and her friends ordered two small portions of beef, a hairy tripe and some vegetables, and finally spent 380 yuan after checking out with a discount coupon, 190 yuan per person.
According to Zi Lemon's previous experience of eating Banu, two people can eat enough by ordering a serving of beef and a serving of hairy belly. I ordered two servings because the first 88 yuan Australian milk cow short ribs were "shabu a few pieces and gone", so she had to order another 69 yuan snowflake fat cow - this time, she counted carefully, there were only seven pieces in total, and the price of each piece was close to 10 yuan.
Sensing that the amount of food was wrong, Zi Lime called the waiter. When pressed by her, the other party said hesitantly that the standard serving size of a small portion of meat is 75 to 85 grams. According to a small portion of 85 grams, the price of a pound of snowflake fat cattle has exceeded 400 yuan, several times higher than the market price. In Zi Lemon's memory, the price of a piece of meat in Banu was about fifty or sixty yuan, but the amount was much more than now, "I really can't afford it."
Not only is meat "becoming more expensive", but the price of vegetables in hot pot restaurants is also becoming unattainable. As early as the beginning of 2023, Banu was questioned for "18 yuan and 5 pieces of sky-high potatoes", even if the official response said that in fact, 5 slices of potatoes are small portions, and the correct price is 9 yuan, it is still difficult for netizens to pay.
By 315 this year, a Haidilao campus hot pot in Xi'an was exposed to only 4 pieces of baby cabbage for 6 yuan. After the consumer reported to the store manager, the other party explained that it had just opened and wanted to see the feedback from the students, so as to appropriately increase or decrease the cost of the dish.
▲ Campus Haidilao 6 yuan 4 pieces of baby cabbage. Photo / Weibo @ Sohu clairvoyant
The wind of reducing costs and increasing efficiency has finally blown to the hot pot track. In the final analysis, more than one hot pot restaurant owner found that the popularity of hot pot began to decline off a cliff, and business became more and more difficult.
As a franchisee of two hot pot brands, Li Ran has felt the chill behind the boiling hot oil since last year's National Day - the colder the weather, the fewer people eat hot pot.
When the customers are full, Li Ran likes to go to the store in person to observe where the service and dishes are not in place. After the business was deserted, he went less and less every month, and when he arrived at the empty lobby of the restaurant, he waited for a long time to sit at a sporadic table or two, "looking depressed".
Opening a hot pot restaurant in a third- or fourth-tier city in Jiangxi is not easier than a first- or second-tier city. At a time when major chain brands are sinking, it is becoming more and more difficult to develop new customers, and reducing costs has become a decision that has to be made.
Unlike Haidilao, Banu, etc., the second hot pot brand that Li Ran joined was Nan hot pot, which focused on "small bowls of dishes", and the amount was not much, so he didn't dare to make a fuss about it. And most customers will order the bottom of the butter pot, it is also difficult to start - a pot bottom priced at 38 yuan, generally contains a pound of butter base and a pound of slag, the butter base provided by the brand, the cost price is 18 yuan a catty, chili, pepper and other slag materials, at least a dozen yuan per catty, so down, the cost of the bottom of the pot alone accounts for more than 30 yuan.
▲ Li Ran's Nan hot pot focuses on "small bowl dishes". Photo / Dianping
In fact, dishes are the bulk of many hot pot restaurants' profits. Li Ran, who has been in contact with many suppliers, revealed that the quality of the hairy tripe in the hot pot restaurant is uneven, the taste of the yellow cow hairy tripe is soft, 42 yuan a catty, and the buffalo hairy tripe tastes crunchy but the cost is relatively high, and the purchase price can reach 58 yuan a catty. Similarly, there are pork yellow throat and beef yellow throat, if diners don't ask, many businesses will not take the initiative to label.
And most consumers eat the fat beef rolls that are necessary to order in hot pot, and the water is deeper. After a few years in the industry, Li Ran can recognize the difference between fat cattle at a glance, the looseness of the meat, the change in color within a few seconds after putting it in the pot, and the chewiness after entering the mouth, all of which indicate the quality of the meat. Poor quality fat beef rolls are easy to disintegrate, and they will be slightly red after cooking, and the cost is 14 yuan a catty, while those with better quality fat beef rolls cost 20 yuan a catty.
Because the unit price of his hot pot restaurant is more than 100 yuan, Li Ran tries his best to control the quality of the dishes at a relatively good level. After calculating, he could only "pick back a little cost" in labor. The number of employees in the store has shrunk from 25 to 14, and the staff dormitories rented for them in the store have been replaced with smaller ones. In order to reduce the loss of dishes, the remaining dishes that have not been sold out of the day will appear in the staff meal.
▲ The meat in Li Ran's hot pot store is plated. Photo / Courtesy of the interviewee
The pressure of cost reduction is also written on the faces of many popular chain hot pot brands. In order to increase the efforts to solicit customers, the "Migrant Worker Package" has been launched in major hot pot restaurants one after another. Haidilao launched a 168 yuan dinner for two, Xiangxiang hot pot launched a lunch meal for two at 188 yuan and 208 yuan, and Banu Mao Belly Hot Pot also launched a 244 yuan weekday tasting package for two people, directly reducing the unit price from 150 yuan to about 120 yuan.
Judging from the figures written into the financial report, many hot pot brands are "cutting prices". According to the data, in 2023, Haidilao's per capita consumption level will hit a new low in recent years, falling below 100 yuan to 99.1 yuan. For comparison, the per capita consumption in 2022 is 104.9 yuan. The per capita consumption of the hot pot, which belongs to the same Jiumaojiu Group as Taier Sauerkraut Fish, will drop from 128 yuan in 2022 to 113 yuan in 2023.
Among the chain hot pot brands that have entered the secondary market, Xiabu Xiabu's Xiangxiang hot pot has a per capita consumption ahead of Haidilao and Haidilao hot pot, but it will also suffer a decline in 2023, from 150.9 yuan to 142.3 yuan. Xiabu Xiabu explained that one of the reasons for this decline is that in response to market changes, Miaobu has added smaller portions to some dishes.
However, when it comes to the feelings of consumers, the atmosphere of "price reduction" is not obvious, and the shrinkage of dishes is a real cost reduction. Zi Ling said that she can accept that hot pot restaurants should raise prices appropriately because of rising operating costs or improved service levels, "but if it doesn't just increase the price, but the amount of food is getting smaller and smaller, it will make people feel too much."
Once upon a time, diners would say "there is nothing that can't be solved with a hot pot". But now, the high-priced hot pot of 150 yuan or even 200 yuan per capita has made the workers exclaim "can't afford it".
In just two years, from the boom to the flameout
Li Ran stepped into this industry with confidence. At the end of 2021, he spent nearly 1.5 million yuan to become the owner of a hot pot restaurant in Jiangxi County, from a building materials merchant who had never been in contact with the catering industry.
The confidence to do so comes from the observation of him and his family. During the epidemic, many brick-and-mortar businesses stagnated and withered, but the business of Haidilao and Xiaolongkan in third- and fourth-tier cities was still hot and hot, and there were long queues to pick up customers.
Before officially joining, Li Ran inspected many hot pot brands such as Xiaolongkan and Dezhuang, and found that the threshold was higher than he imagined. Originally, he calculated that the franchise fee could be controlled within 200,000 yuan, and the total investment would not exceed 1 million, but almost all brands told him that the newly opened store should start with a minimum area of 300 square meters and a franchise fee of at least 300,000 yuan.
Later, he learned that in order to attract more franchisees to join the company, many brands would falsely report the total investment in the early stage, and when the agreement was signed and the store was actually opened, the money would be spent like a stream.
In addition to the need to pay a high franchise fee, franchisees also need to pay a monthly brand management fee, which is 3,000 yuan per month, and 36,000 yuan a year alone. However, Li Ran felt that after the store opened, the brand almost no longer involved in the later operation and management, nor did it give substantial assistance, "basically free-range and self-fending".
In the end, among the many hot pot brands, he chose to join a local chain hot pot brand in Jiangxi. The store opened near a popular business district in the county, and achieved a turnover of 500,000 yuan in the first month of opening, and the daily queue lasted for more than two months. This also made Li Ran's heart relax slightly.
At that time, the shadow of the epidemic was still hanging over many industries, but people's desire for hot pot was the first to recover. According to the "China Catering Development Report 2022", due to the impact of the epidemic, the scale of the mainland hot pot market decreased to 526.8 billion yuan in 2020, but rebounded in 2021, reaching 563 billion yuan.
Then in 2022, the hot money of capital is still pouring in. In the first half of 2022 alone, there have been 5 investment and financing events in the hot pot track, among which Sister Pei Chongqing Old Hot Pot has won a round A financing of 100 million yuan.
Players at all levels in the track are also ready to move. Since May 2022, Banu has opened new stores in Beijing, Hefei, Wuhan and other cities, and the first store in Hefei even dissuaded more than 100 tables of guests on the opening day due to excessive customer flow. In July of that year, Zhu Guangyu Hot Pot Restaurant landed in Shanghai, and the turnover rate was stable at 6 times a day, with a monthly turnover of more than 5 million, becoming a "phenomenal" store during the epidemic in Shanghai. In September, Sister Pei Chongqing Old Hot Pot opened two stores in Beijing Heshenghui and Sanlitun, and during the first Mid-Autumn Festival holiday after the official opening, the waiting place for the store was four or five hundred during the peak hours.
▲ Sister Pei's Chongqing old hot pot was once the top queue in the hot pot industry. Photo / Sister Pei's official website of Chongqing old hot pot
During that time, Internet celebrity hot pot brands continued to emerge, and the bloggers who visited the short video platform received soft promotion orders. Every once in a while, Li Ran would hear that another brand in the industry was "doing it", and his heart itched when he heard it. Seeing that the momentum of the first store was good, he quickly made up his mind: to make another one, this time to go to the prefecture-level city above the county seat, and join a more famous Internet celebrity brand.
Nan hot pot came into his sight at that time. This time, Li Ran invested nearly 2.3 million, and the store is located on the third floor of Wanda Plaza in the prefecture-level city, covering an area of 348 square meters, and will open for business in October 2022.
Li Ran's previous hot pot restaurant was decorated in a simple style similar to Haidilao, while Nan Hotpot's store highlighted a Chongqing-style Internet celebrity style, not only decorating various elements from the 80s of the last century on the wall, but also launching various styles of desserts, all for the sake of "convenient photographing".
▲ The dishes in Li Ran's hot pot store. Photo / Courtesy of the interviewee
Although the franchise fee, management fee and actual investment amount have increased significantly, Li Ran is still impressed by the appeal of the Internet celebrity brand. In the month of the official opening, the turnover reached 1 million yuan, and the most popular time was once ranked to more than 100, and the turnover rate was 5 times a day, which was higher than the highest 4.8 times in Haidilao in recent years.
It would be nice if the numbers could be maintained at that level all the time, Li Ran can only sigh now. In fact, the turnover fell to 7.8 million yuan from the second month, but it didn't pay enough attention to it at that time. Including the mistake of site selection, it also gradually became apparent after the opening - this Nan hot pot is located in a corner of the restaurant floor on the top floor of Wanda Shopping Mall, if the diners are not checking in the name of Internet celebrities, the number of people who naturally come to the restaurant is almost half less than the point with the largest customer flow on the same floor.
Internet celebrity wind crosses, the heat comes and goes faster. The numbers are still slipping. Compared with the three months of 2022, the turnover of Li Ran's store in 2023 will drop by about 30%, and this year, it will fall by nearly 40% on the basis of last year. The unit price of the store can not hold up, at first the table table can be ordered to more than 300 yuan, from April last year, this number has dropped all the way to 290 yuan, 270 yuan, to February this year, the average table consumption is only 260 yuan.
For the county catering people, the Spring Festival is the peak period of people worth looking forward to, and Li Ran also hoped that the pot gas in the store could warm up during the holiday, but in the end it backfired.
As soon as the holiday passed, Li Ran decisively closed Wanda's Nan hot pot, and in a year and a half, he lost more than 1 million yuan in this store. The other hot pot restaurant fared a little better, but it lasted only a month, closing in March. Li Ran said that he had to stop the loss in time, "There is no money to make, (again) I have to post money in, and I will simply close it."
It was not only Li Ran's hot pot restaurant that fell, but many chain hot pot brands also turned off their flames.
The number of Tan Yaxue's stores shrank from 654 at the beginning of last year to 470 at the end of the year, and more than 180 stores were closed in one year. The number of Little Sheep stores, which were once very popular, has shrunk from 760 in its heyday to more than 100 at present. Xie Guo, founded by former CEO Zhang Zhenwei, has received $150 million in angel round financing, once opened four stores in Shanghai, Guangzhou and Shenzhen, and also claimed to expand the number of stores nationwide by 40 to 50 in 2022, but now all stores have closed.
▲ The number of Little Sheep stores, which was once a smash hit, has shrunk to more than 100. Photo / Visual China
The hot pot brands blessed by stars such as Chen He and Xue Zhiqian have also lost their former halo. In its heyday, Xianhezhuang lo-mei hot pot, which had more than 800 stores, was previously exposed to a large-scale closure of stores, and all stores in Beijing, Shanghai, Guangzhou, Chengdu and other places were closed, and there were only a few dozen stores left in the country. Another Shangshangqian Chuanchuan incense hot pot currently has only two stores left in Guangzhou Grandview Plaza and Shanghai Nanjing East Road Pedestrian Street, while there are nearly 30 stores at the peak of development.
According to the data of the enterprise investigation, in 2023, the cumulative number of cancellation and revocation of hot pot-related catering enterprises will exceed 30,000, and Li Ran is obviously only one of the insignificant 30,000 of them.
Flat is popular, what else can be rolled in hot pot
Hot pot used to be the first choice for post-00s to dream and gather with family and friends.
When Zhu Meng was in elementary school, Banu drove from Anyang to Zhengzhou, where she was. She remembers that business in Banu was so busy that the family started queuing at 7 p.m. and didn't finish eating until 10 p.m.
But in 2022, she and her family went to Banu for dinner again, and without asking for alcohol, 14 people spent 2,700 yuan, nearly 200 yuan per person. Since then, hot pot has gradually faded out of her sight, "Now that all my friends are having dinner, no one has proposed to eat hot pot, nobody!"
Compared with many chain hot pots, consumers are more willing to choose better service and environment when the taste is heavy and the taste is not prominent enough, and the price is about the same.
When food blogger Lynn ate a price of nearly 300 per capita at a chain hot pot brand, she said she couldn't understand it, "It gives me the impression that it is an ordinary social scene like a gathering of friends", and with some money, two people can spend seven or eight hundred, you can eat hot pot with higher quality and better environment, "you don't even have to do it yourself.
▲ Picture / Visual China
For a long time, hot pot has been a good social medicine and a stress reliever for contemporary workers. But in the current era of cost-effective performance, the high unit price determined by the cost of pot bottom, dishes, store decoration and other costs seems to have made hot pot the bottom of the chain that many young people choose to despise.
Although he has only been in the hot pot industry for two years, Li Ran himself can be called a heavy lover of hot pot and has seen the ebb and flow of this industry. A friend of his invested 1.6 million yuan in October last year, and also opened a hot pot restaurant, unlike Li Ran, the friend actively embraced low-price group buying, and the store hung a coupon of 9.9 yuan to 50 yuan on the group purchase page for a long time, but even so, the customer flow is still unsatisfactory, and the friend has not returned to the original cost so far.
Since last year, low prices seem to have become the standard configuration of every restaurant, but until now, Li Ran still thinks that "everyone is tired when they see 9.9 yuan, and they are all the same, but they are not interested." He only entered the game after the Internet celebrity hot pot brand became popular for two years, but he just stepped into the downward cycle.
When Li Ran found that three small hot pot restaurants of different brands suddenly opened on the street within a kilometer radius of Wanda Plaza, the direction of the wind had actually changed. Those small hot pot restaurants with "market style" and "stall style" are scattered on the street, with smaller stores and fewer employees, not only can the unit price of customers be reduced, but also the temperament of traditional Sichuan and Chongqing alleys hot pot can be promoted, focusing on an asset-light and down-to-earth atmosphere.
Consumers' belts are getting tighter and tighter, and their resistance to high-priced hot pots has also forced high-priced hot pots to put down their bodies and bow their heads for transformation.
Haidilao first launched a sub-brand "Hi Lao Hot Pot" of about 80 yuan per capita, streamlining the proud service, and opening up the franchise in full swing, hoping that the franchisee bosses in sinking cities will lift themselves again. Banu, who used to stick to star products such as Haidilao and hairy belly, once launched a small hot pot for Tao Niang's rice, and the latter's main 6 small hot pots are all within 30 yuan, and the side dishes are within 10 yuan, focusing on one person.
▲ The in-store environment of the sub-brand "Hi Lao Hot Pot" launched by Haidilao. Photo / Dianping
The catering players who were not originally on the hot pot track also coveted this business. Xijiade, which sells dumplings, launched dishes similar to "small hot pot" last year; Ah Xiang rice noodles also launched a new "Ah Xiang small hot pot" in seven stores in Beijing and Shanghai; and Nancheng Xiang, which is entrenched in Beijing, launched a small hot pot with a minimum of only 19.9 yuan last year (and experienced several rounds of price increases soon after), and was popular among netizens under the name of "poor ghost package".
As many players roll up new poses, as many brands lose their original position in the era of low prices.
When it was listed in 2014, the unit price of Xiabu Xiabu was still 44.4 yuan. At that time, it was a "cheap canteen" in the hearts of many students and new workers, and for thirty or forty yuan, you could eat a hot pot with meat, vegetables, and sesame sauce base for unlimited continuity, and was called "McDonald's of the hot pot industry".
But after that, the founder He Guangqi hoped that Xiabu Xiabu would develop in the mid-to-high-end direction and become the "Starbucks of the hot pot industry". While he made a decision to launch a more positioned and Haidilao with a higher unit price, he also wanted Xiabu Xiabu to take off the parity label. During the epidemic in 2022, he also bucked the trend and made a bold decision - to launch a high-end barbecue brand Zhan Yao, which has a unit price of 220 yuan, and plans to exceed 100 stores within three years.
▲ Take the high-end route while burning. Photo / Dianping
As he wished, the unit price of Xiabu Xiabu soared all the way from more than 40 yuan to 62.2 yuan in 2023, and "the price is unaffordable" replaced parity and became one of the most significant labels on Xiabu. The more high-end positioning and targeting the "new middle class" have been hit harder by the decline in the middle class, and the same-store sales growth rate in first-, second- and third-tier cities has suffered double-digit negative year-on-year growth. As Xiabu Xiabu and Xiabu Xiabu's restaurant revenue accounts for more than 90% of Xiabu Group's overall revenue, the cumulative loss of Xiabu Group from 2021 to 2023 will reach 845 million yuan.
In addition, the unit price of customers is higher than Xiabu Xiabu and Xiabu Xiabu and Xiabu Xiabu, after the high-profile start, there is no sound, with the closure of stores in Guangzhou and Shenzhen, only one store in Shanghai Longhua Club is still operating.
In the 2023 annual report, He Guangqi attributed the losses faced by Miao to "the current increasingly fierce competition in the catering market and weak consumption", and he also emphasized that due to the external environment, the entire catering industry will have a serious "involution" in 2023.
It is not difficult to see that the increasingly fierce price war in the hot pot industry has squeezed the living space of many players. Yin Yi, president and CEO of Liu Yishou hot pot, once said in an interview that the hot pot has "three mountains" of high labor, high rent and high raw materials, and the price war is not a long-term behavior.
For those chain brands that are struggling with transformation, small hot pot is more like a "helpless move" in the context of consumption downgrade. In early March this year, Du Zhongbing, the founder of Banu Mao Belly Hot Pot, held shares in the company and officially withdrew from Tao Niang's small hot pot. At the end of 2023, Du Zhongbing publicly stated that in the case of limited overall capabilities, he still hopes that Banu will focus on the development of the main business and not be a sub-card.
However, individual businesses like Li Ran still have to go through rounds of big waves and sands. He did not give up, and still insisted on looking at the opportunities in the catering industry, just like what he decided when he entered the hot pot, "people always have to eat, and cooking will never be eliminated".
It's just that hot pot will not appear in Li Ran's consideration in the past five years. Nowadays, there is a vague trend of explosion in the style of Chinese food, and he plans to investigate and take a look.
(At the request of the interviewee, the names of the characters in this article have been changed.) ）
Resources:
"The Boiling Hot Pot Market is Playing a "Song of Ice and Fire"", Red Meal Network
"The hot pot price war that has spread for a year: first roll up your peers, and then roll yourself to death", watching the tide and new consumption
"Hangzhou's "National Hot Pot" Closes 9 Stores a Year, Young People Don't Love Hot Pot Anymore?", Lianshang.com
"The hot pot restaurant has "turned off" this winter?", consumption is at the forefront
"Xiabu Xiabu, Abandoned by Young People", NetEase Digital Reading
The article is the original work of Daily People, and infringement must be investigated