The lesson of 300 Haidilao stores per hot review: rapid expansion can not be chaotic

Per commentator Zhang Huaishui

A few days ago, Haidilao suddenly announced that it would implement the "Woodpecker Plan" to close and integrate about 300 stores that did not meet expectations, and also announced a series of measures. As soon as the news came out, it immediately jumped to the top of the Weibo hot search list.

Why did the "national hot pot", which was once difficult to find, now come to the dilemma of large-scale shutdown?

According to public information, in 2019 and 2020, Haidilao opened 308 new stores and 544 stores respectively, and added 299 new stores in the first half of 2021. As of the end of June 2021, haidilao has a total of 1,597 stores worldwide. From the above data, it can be seen that even in 2020, when the new crown epidemic is more serious, Haidilao still chooses to expand rapidly against the trend. As a result, the turnover rate has dropped sharply, the performance is not up to standard, and some stores are cold. In this case, perhaps only by surviving with a broken tail and closing stores with poor departmental performance can we help improve quality and efficiency.

In 2020, Haidilao's revenue increased by 7.8% year-on-year, while the annual net profit fell by 86.8% year-on-year. In the 2021 interim results report, Haidilao's operation still did not meet management expectations. The number of closed stores announced this time is close to 19% of the total number of Haidilao stores.

It can be seen that in the current environment, the idea of using scale expansion to win the market and trying to reduce the cost of a single store may not work. In contrast, the reason why Haidilao has been able to succeed and become the dark horse of the domestic hot pot industry lies in its characteristics of high-quality service and relatively comfortable dining environment. From this point of view, the closure of stores that fail to meet the performance standards will indeed help Haidilao to quickly recover blood, further improve the quality of dining services, dining experience and dishes, and further expand and strengthen its own advantages.

In the era of information fragmentation, consumers are constantly filled with new information, and it is difficult to maintain a long-term consumer passion for a product. It is in this context that cases such as the launch of milk tea products have become widely discussed cases in the industry. How big brands can expand their product lines and business areas, and even carry out cross-border cooperation with different industries, while incubating new brands in the process of transformation and upgrading, may be a topic that Haidilao should consider carefully at present.

On the other hand, in the current booming Internet economy, entering the Internet e-commerce platform can help enterprises pay more full attention to the needs of young consumer groups. Haidilao has also tried to integrate into online e-commerce platforms in recent years. For example, the Haidilao APP e-commerce mall has launched products suitable for online sales, including ingredients, snacks, leisure products and peripheral cultural products. But at the same time, we must also rationally face the opinions of netizens such as high delivery fees and less fast food.

Haidilao's rapid expansion is like a marathon, if you run too fast, it is easy to mess up the pace. Stop and tie your shoelaces tightly and look up at the road ahead to maybe go further.

Daily economic news