Why did the "big hot pots" drop their prices one after another?
Author | Wang Zixu
Editor|Tong Jie
Header image source丨Visual China
Hot pot has also started a price war.
Recently, Jiumaojiu's hot pot has made a new round of dishes and price adjustments, shouting slogans such as "the bottom of the pot starts at 8 yuan, and the meat dishes start at 9.9 yuan", which is intended to lower the threshold for dining; The relatively "cold" Banu also began to reduce the price of dishes and launched a review group purchase package.
Xiabu Xiabu also recently announced a menu adjustment, with the unit price of meals generally reduced by more than 10%, and the average customer unit price does not exceed 60 yuan. Not to mention that Haidilao will continue to reduce prices in 2023, and its average customer unit price has dropped to less than 100 yuan......
It is clear that the hot pot industry is changing, especially in terms of price. As major brands have adjusted their prices, are hot pots going to start "rolling" prices? Is the price war so easy to fight for a heavy hot pot with hundreds of people per capita?
1
Hot pot collective price reduction?
Recently, Jiumaojiu's hot pot has carried out a new round of dishes and price adjustments, and some stores have posted an announcement outside the store saying: "The bottom of the pot starts at 8 yuan, meat dishes start at 9.9 yuan, vegetarian dishes start at 6.6 yuan, and stewed rice is 6 yuan for all-you-can-eat", compared with the previous round of dishes, the price drop is 0.9-14 yuan, and the bottom of the pot is reduced by 2-4 yuan, and the corresponding dish specifications have also been adjusted accordingly.
Source: Screenshot of the hot pot applet It is worth mentioning that the price of the pot bottom in Beijing and Shanghai is 1 yuan more expensive
In this regard, Jiumaojiu told the brand: "We began to carefully optimize and adjust the tableware plating, menu packages and prices in stores across the country in May this year, and these improvements are aimed at providing customers with a richer and more diverse food choice, so that every customer can enjoy value-for-money catering services." This is a routine and important work in the brand development of the hot pot factory, reflecting our continuous commitment to brand power enhancement. ”
This instigation of hot pot price adjustment is obviously to lower the threshold for dining. In fact, the per capita unit price of hot pot has been declining year by year, according to the financial report, its per capita unit price from 2021 to 2023 will be 129 yuan, 128 yuan and 113 yuan respectively.
Previously, the relevant person in charge of Jiumaojiu had told the brand that the group would make corresponding adjustments to the brand in response to the changes in the consumer market. For example, starting from the unit value, product structure and product mix, the purpose is to improve efficiency, polish the store model, and make it lighter, "only in this way will the pricing be more cost-effective and competitive." ”
In addition to the hot pot, Banu is also adjusting the price.
According to the brand number reading, since the beginning of this year, the national average customer unit price of Banu has dropped from 144 yuan in January to 130 yuan in May. In this regard, the relevant person in charge of Banu told the brand that "the price was adjusted at the beginning of the year and dynamically adjusted at any time." In addition, Banu, which did not sell review packages before, also launched a package at the end of last year, "The earliest was for leisure time, mainly for customers who felt that Banu was expensive. ”
Source: Banu Mao Mao Hot Pot Official Weibo
However, compared with the direct price reduction, Banu has adopted the method of delivering food through membership rights to adjust the price. The other party emphasized that the price adjustment is a phased measure, mainly to take care of the dining choices of some customers, strategically speaking, it is not for sinking, and Banu's original intention of insisting on high-quality hot pot has not changed.
Coincidentally, recently, Nan hot pot opened a 3.0 store type in Chengdu, whether it is the scene or the product, it points to more daily and popular consumption, and the signature fresh-cut beef also has a slogan starting at 9.9 yuan. According to Zhang Wenhao, the founder of Nan Hot Pot, with the changes in the economic situation and market environment, the price band of per capita consumption of 100 yuan in the past has become more competitive, and the repurchase power is not strong, and the per capita consumption of 3.0 stores has dropped to 70-80 yuan. [1]
In addition, Haidilao, the head of the industry, also continued to adjust prices last year, and its per capita customer unit price will be less than 100 yuan in 2023.
In addition to the big hot pot, Xiabu Xiabu, which started with a small hot pot for one person, also announced a menu adjustment, with an average price of 58 yuan for a single meal and an average price of 130 yuan for a double meal, with an average customer unit price of no more than 60 yuan, and the unit price of the meal has generally been reduced by more than 10%. From 2017 to 2019, the unit price of Xiabu Xiabu was 48.4 yuan, 53.3 yuan and 55.8 yuan respectively.
It can be seen that the price reduction of the hot pot industry has been the general trend, and some industry insiders said that in the context of reduced consumption enthusiasm, only price reduction can adapt to today's consumers' pursuit of cost performance.
2
The "big hot pot" is still focused on the high-tier market
Stores are very important for catering companies, and after adjusting the menu and price, they must complete the closed loop through the store.
The number of brands has sorted out the opening of some hot pot brands in the past two years, and on the whole, the opening of stores of various brands is in a steady expansion trend, and only the small hot pot with lower cost has opened slightly more.
Excluding Xiabu Xiabu, only Haidilao and Banu will add double-digit stores in nearly half a year in 2024, with 14 and 11 respectively. It should be noted that in the previous financial report, Haidilao did not announce the store opening plan for the new year, in fact, after the "woodpecker plan", Haidilao has become more cautious in opening stores, but the number of new stores this year has exceeded last year.
At present, most of the above-mentioned brands are mainly directly operated, so on the whole, the big hot pot with higher opening costs is still stable in terms of store opening.
Looking at the distribution of stores of various brands, Haidilao, which has an absolute advantage in the number of stores with 1,360 stores, currently covers 32 provinces and enters 255 cities, which can be said to occupy an absolute leading position.
Due to the relatively short time of establishment, the number of stores is only 70, and Guangdong is the absolute base camp from the distribution point of view, with more than 40 stores, while the number of stores in other regions is only in single digits, but the hot pot has entered Shanghai and Beijing, and the overall layout of the first-tier cities has been completed.
Last year, the hot pot contributed 807 million yuan in revenue, a year-on-year increase of 210.4%, and the revenue accounted for 13.5% of Jiumaojiu's total revenue, compared with 6.5% in the same period last year.
Banu's base camp has more than 50 stores in Henan, but Jiangsu is the second province with 23 stores, even surpassing Beijing, and the number of stores in other provinces and cities is also in the single digits.
For this year's store opening strategy, Banu revealed that on the one hand, it will encrypt stores in markets such as Beijing, Wuhan, Hefei and other cities that have been laid out, and on the other hand, it will focus on developing some new provincial capitals such as Hangzhou, Jinan, Qingdao, etc., and some stores are currently being renovated.
Xiabu Xiabu, a small hot pot that started in the north, has been adjusting its stores in the past two years, and mentioned in the financial report that it will focus on the East China and South China markets this year, focusing on the rebranding of the southern region and the competition for advantageous points in the northern region.
In addition, from the perspective of the distribution of first-tier cities, most brands still target the layout of high-tier cities. At present, about 70% of the total number of stores in first-tier and new first-tier cities are located, and there are few stores in cities below the third tier.
Banu's stores in first-tier and new first-tier cities accounted for 60% of the total, and its stores in second- and third-tier cities accounted for about 30%; Haidilao is the most sinking hot pot brand due to the advantage of the number of stores, and its stores in third-tier cities and below account for 30% of the total number of stores.
In general, in addition to Haidilao, most hot pot brands are still mainly based on the layout and encryption of high-tier cities, supplemented by second- and third-tier cities.
3
Forced to join the price war
Some industry insiders said that the price war in the hot pot industry has been going on for a while, whether it is low-cost group purchase coupons, cost-effective sub-brands, or the rise of various small hot pots, all of which prove this.
Price wars are usually a strategy adopted by brands to compete for market share, by lowering prices to attract consumers, but this practice often leads to the intensification of homogeneous competition within the industry, which in turn accelerates the reshuffle of the industry.
For example, the impact of the price war in the coffee industry, the unit price and revenue of multi-brand same-store customers have decreased, and many small brands have closed down their stores, but this is still an industry with high enough standardization.
In fact, the macro environment is superimposed on industry competition, and the impact of the hot pot price war has emerged. According to the data of Narrow Door Restaurant, 220,000 new stores have been added to the hot pot track in the past year, but the net increase is only about 84,000, which means that more than 130,000 hot pot restaurants have left.
A number of industry practitioners told the brand that due to the weak market environment, price reduction is a last resort, and the price war is not beneficial to the brand itself and the development of the entire industry in the long run.
Du Zhongbing, the founder of Banu, once said frankly in an interview that the price can be relatively adjusted when consumption declines, in order to attract the original target group, it is difficult to completely convert a consumer group through price reduction, and there are such head players as Haidilao in the market, so from a strategic point of view, price reduction can only be a phased strategy, and it is difficult to overtake through the price reduction corner.
The current situation is that although brands are subjectively unwilling to join the price war, there is a high probability that the price reduction of hot pot will continue. So, how long will such a price war last?
An analyst said that price reduction is only a short-term marketing method, and price is closely related to cost, revenue, and profit, and he believes that once the brand finds that the price reduction has too much impact on profits, it will step on the brakes in time, so in his opinion, the price war will not last too long.
However, some industry insiders have suggested that with the deepening of the price war, it will promote the transformation of brands to a more efficient and lower-cost operation model, so that brands will pay more attention to supply chain management, improve the efficiency of raw material procurement and optimize the operation process through digital means, so as to reduce costs while maintaining the quality of products and services.
In this way, the price war in the hot pot industry seems to have no end in sight.
Resources:
[1] "10% Cut! The listed hot pot is also annoyed, and it can only rely on low prices to please young people? See you at the hot pot meal
This article is an original article, please inform us if you need to reprint
To reprint, cooperate or join the community, please contact the editor: xdskefu plus the editor's friends, please indicate the company and the intention
"Reading 100 Brands" Past Articles
Tiffany丨Starbucks丨lululemon丨Shanghai Auntie丨Shiseido丨Guanxia丨Li Auto丨Luckin Coffee丨Jiangnan Buyi丨Kuafu Fried Skewers丨NIO丨Belle Fashion丨Domino's丨Miu Miu丨ubras丨Seesaw丨Xpeng Motors丨ZARA丨Peacebird丨Anta丨Decathlon丨Hometown Chicken丨L'Occitane丨Tea Beauty丨Tea Baidao | Mardi | Blue Bottle Coffee | ZEEKR Cars | Acne Studios丨Angpao丨Hollyland| Burger King | Jasmine yogurt | Chanel丨VF Group丨Sam | Rural Foundation丨iFLYTEK
"Winning Matrix"