Chinanews.com, Beijing, November 6 (Zuo Yuqing) "We will gradually close about 300 stores that have failed to meet expectations before December 31, 2021." On the evening of November 5, Haidilao announced that it will start The "Woodpecker" plan shrinks the group's business expansion.

　　This is after Xiabuxiabu announced the closure of 200 stores, Haidilao finally made the decision to "broken the arm to stop bleeding".

Since 2019, why Haidilao, which has experienced three years of rapid expansion, has not been able to "fish"?

A store in Haidilao.

Photo by Zuo Yuqing

Closed about 300 stores in more than a month

　　The financial report shows that in 2019 alone, Haidilao opened 308 new restaurants, with the total number of stores reaching 768, and the turnover rate stabilized at 4.8 times per day.

By 2021, Haidilao has 1,597 stores, and its layout has gradually shifted from first-tier cities to second-, third-tier and lower-tier cities, but the turnover rate has dropped to 3 times per day.

　　Haidilao’s "Woodpecker" plan will be solely in charge of Haidilao’s executive director and deputy CEO Yang Lijuan, and will close 300 stores within a month, accounting for about 20% of the total number of Haidilao’s stores.

Which stores will be "stopped in time"?

　　"We will continue to pay attention to stores with poor operating performance, including overseas stores, and take decisive measures to integrate." The relevant person in charge of Haidilao said on the evening of the 5th that the scope of closures includes all stores in tier 1, 2, 3, 4 and 5 cities and overseas. Store.

Among the closed stores, some stores will be temporarily closed and reopened at an appropriate time, and the rest period will not exceed two years at the longest.

On the evening of November 5, Haidilao issued an announcement.

　　In terms of the shutdown standards, Haidilao said that it will comprehensively consider the three dimensions of the maturity and passenger flow of the external business district where the store is located, the surrounding density of the store, and the financial indicators of a single store.

"The average turnover rate has not reached 4 times per day. In principle, new branches will not be opened on a large scale."

　　While shrinking stores, Haidilao will also make a series of internal structural adjustments.

Including strengthening some functional departments and restoring the regional management system, strengthening internal management and assessment mechanisms.

　　"The specialty of woodpeckers is that they are good at finding pests under the skin of trees, and they are tenacious." When talking about the "Woodpecker" plan, the relevant person in charge of Haidilao said that this will be a continuous work.

What happened to the accelerated expansion of Haidilao?

　　In a fifth-tier city, a Haidilao store was once full when it opened in September, and even the reservation number had to be booked.

But only two months later, there are no customers waiting in front of the store, and they can enter the store to eat at any time.

　　The service staff of the store told Chinanews.com that the deserted store is now affected by the recent epidemic.

Regarding the news of "closing 300 stores", she said that she has received the news, but the store is currently operating normally and has not received any notice of closure.

　　In Dianping, some consumers who came here said that compared with Haidilao in big cities, the service level of this store is "a little bit worse."

　　"When I asked the waiter to help prepare the bottom of the Internet celebrity pot, the waiter actually said that he was new and would not do this." A consumer who went to the store to dine at the opening vomited. In addition to this basic service, the clerk communicated And the ability to interact is not as good as a store in a big city.

　　Some consumers told Chinanews.com that as the only store in the city, Haidilao's reputation did attract many customers to experience the "early taste" in the early stage of opening the store, but its price and expensive service did not meet expectations, so The price/performance ratio is not high.

"I will come to experience it occasionally, and I may still choose a cheap and delicious hot pot restaurant."

A Haidilao store in a fifth-tier city.

Photo by Zuo Yuqing

　　The coldness of Haidilao in this fifth-tier city is the epitome of the negative results of Haidilao's over-expansion.

In 2020, Haidilao’s revenue increased by 7.8% year-on-year, but its annual net profit fell by 86.8% year-on-year.

In the 2021 interim performance report, although Haidilao achieved a turnaround, its operating results still did not meet management expectations.

　　Expansion of stores to outperform costs seems to be the "destiny" of the catering industry.

However, under the impact of various factors such as the epidemic and the economy, its profits are difficult to catch up with the increase in costs of raw materials, consumables, and employee salaries, and the store scale indicators no longer have operational significance.

　　"We personally think this is related to the company's rapid expansion policy formulated in 2019." Haidilao executives frankly admitted to previous mistakes in decision-making, and the resulting series of consequences: "The location of some new stores Unreasonable, internal organizational structure changes have made managers at all levels'incomprehensible and exhausted', insufficient number of excellent store managers, excessive belief in KPI indicators of'living benefits', and insufficient corporate culture construction."

　　At the shareholders meeting in June 2021, Haidilao founder Zhang Yong also admitted that he had misjudged the trend.

"My judgment on the trend was wrong. In June last year, I made a further plan to expand the store, and now it is indeed blind and self-confident."

Without layoffs, how to arrange the employees whose stores are closed?

　　"With so many stores closed, will Haidilao usher in a wave of layoffs?" After the news appeared on Weibo's hot search, many netizens expressed their concern about Haidilao's layoffs.

　　In this regard, Haidilao stated that it will not lay off staff while closing the store, and will properly relocate the staff and management of related stores within the group.

It is understood that Haidilao will provide other development opportunities for store management, or include it in the "energy storage pool" as appropriate, and improve its job management and operation level through enhanced training; ordinary employees will be deployed internally, fully respecting the wishes of employees, and let them Choose to work in other stores.

　　In terms of intensive training, Haidilao proposed that it will optimize its internal "learning and development center", starting with four categories of courses such as management, business, enterprise, culture, and life, so that instructor certification courses, management procedures, and evaluation systems will be used. Be more systematic and scientific, and promote the improvement of employee skills with a "mentorship" + "professionalization" model, so as to better select talents.

Data map: Haidilao hot pot.

Photo by Zuo Yukun

What will Haidilao do next?

　　In addition to the adjustment of the store process, Haidilao said it will increase the abundance of takeaway products to cope with changes in consumption patterns under the epidemic.

　　"Involving online e-commerce platforms, online services, or peripheral products, etc., many attempts have been made in recent years. For example, the Haidilao APP e-commerce mall has launched products suitable for online sales, including food ingredients and snacks. As well as peripheral cultural products, etc., it can meet the needs of consumers."

　　The financial report shows that although Haidilao's takeaway business has grown, its takeaway revenue will only account for 2.5% in 2020.

　　In terms of product planning, Haidilao executives said on the 5th that they will still focus on the theme of "eating" and related peripheral products, and pay attention to the individual needs of young people.

　　Prior to this, Haidilao had conducted a series of "cross-border" acquisitions.

　　In 2019, Haidilao acquired all the shares of Beijing Youdingyou Catering Co., Ltd.

In 2020, two wholly-owned subsidiaries of Haidilao acquired 80% of the shares of Shanghai Shuhai and HN&T Holdings, respectively, and integrated the Hanshe Chinese cuisine brand, which is mainly engaged in "fusion cuisine", and the Hao Noodle brand, which is mainly engaged in noodle restaurant business. .

　　As for cross-border results, Haidilao’s financial reports for the past two years show that sales of seasoning products and food ingredients only account for 1%-2% of total revenue.

In 2020, Haidilao’s “other restaurant operations” revenue accounted for only 0.1% of total revenue, and this figure in the 2021 interim performance report was 0.5%.

　　"At present, Haidilao's brand still has a high influence in the hot pot market, especially in overseas markets." Shen Meng, executive director of Chanson Capital, said, "closing some of the stores that are slowing down performance will help improve the seabed. The profitable return on net assets and the enhancement of free cash flow are all options for all parties."

　　What do you think about this?

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