In 2021, the transformation and renewal of the catering industry

Author 丨 Tang Weike

Editor 丨 Cao Jinliang

Figure Source 丨 Xinhua News Agency

Looking back at the catering industry in 2021, some people cry and some people laugh.

At the end of the year, the tide of physical business closures continued, whether it was shopping malls, hot pot shops, milk tea shops, or offline clothing stores.

"Hot pot brother" sipping and feeding closed 200 loss-making stores, Haidilao closed more than 300 stores, tea face and pleasant temporary closure of 70 or 80 stores in Changsha, etc., all over the country, the closure of stores is staged every day.

On the other hand, according to the "2021 China Catering Big Data White Paper", the total scale of China's catering stores in 2021 reached a new high, exceeding 9.3 million, but the growth rate slowed down significantly, and the market was in a transition period from "incremental" to "qualitative".

The COVID-19 pandemic has led to a wave of large-scale store closures in Chinese restaurants in the first half of 2020, followed by a rapid recovery in the second half of the year, and by the end of 2020, the size of stores will even exceed the pre-epidemic scale, reflecting the vigorous development vitality of China's catering market. Entering 2021, the opening rate of the catering industry is relatively balanced, and the opening rate is slightly higher than the closing rate. After the epidemic training, the anti-risk ability of Chinese catering enterprises has been significantly improved, and the store retention rate in the past year has exceeded 80%, which is significantly higher than that of previous years. The innovation of new catering models such as cobbled tea and hot pot is also constantly exploring the way.

Transforming online and creating a new model seems to be a new path for the evolution of catering in 2021. After the intensification of the reshuffle of the epidemic, where is the next stop for the catering industry?

The difficulties of physical business

The fall of net red restaurants on the altar has become one of the characteristics of the development of the catering industry in 2021.

Wen Heyou in Guangdong and Shenzhen has gone from shoulder to door, and the internal business person of Wenheyou in the Taikoo Hui Business District of Guangzhou admitted to the 21st Century Business Herald reporter that the performance is almost half lower than in the early days of opening.

Three months after opening the store, Shenzhen Wenheyou also ushered in a sharp decline in customer flow. However, in early September this year, the Shenzhen Wenhe Youyuan signboard was removed and replaced by a new sign " Old Street Oyster Market " . Part of the layout of the site has also been changed to a fish market. It is understood that the "Old Street Oyster Market" is the first independent regional characteristic IP of "Super Wenheyou", which is intended to dig deep into the Shenzhen oyster culture and is also the biggest change since Wenheyou entered Shenzhen.

After the hot pot chain giant Haidilao announced the closure of more than 300 stores in November, half of its fast food brands have also been exposed to have closed down.

Coincidentally, on November 10 this year, Cha Yan Yue announced the temporary closure of 70 or 80 stores in Changsha, which is already the third centralized temporary closure of the brand in 2021, the first centralized store closure this year is due to the local New Year, and the centralized closure in July is due to the repeated epidemic.

In this regard, Cha Yan said frankly that the previous intensive distribution points have earned dividends in Changsha's urban development, and under the epidemic, it is natural to bear the results of the reduction of the flow of people.

"The recurrence of the epidemic has greatly reduced the offline passenger flow, and in the case of a sharp decline in turnover, the cost of opening a store remains high, and it is not an exaggeration to say that it is in the depths of the water." A medium-sized Hunan cuisine catering operator in Shipai, Guangzhou, told the 21st Century Business Herald reporter.

Since last year, the restaurant industry has experienced two turbulent years. First of all, the number of dine-in foods caused by the epidemic last year has dropped sharply, and then this year's upstream raw materials such as vegetables, pork, condiments and other upstream raw materials have risen, and even a chain group such as Haidilao has begun to shrink its front, not to mention many small and medium-sized merchants, any bit of "wind and grass" may squeeze the already precarious profit margins, causing huge pressure on cash flow.

From the perspective of specific dismantling, catering operators using different formats face different problems.

For dine-in restaurants, the sharp decline in offline traffic is the most direct blow. The traditional catering industry has always had the saying of "three highs and one low": high rent, high labor costs, high food prices, and low profit margins. Rent, manpower, and food basically account for 70-75% of the total cost, and after deducting taxes, depreciation of fixed assets and other losses, the profit margin is usually only 5-10%.

For catering businesses, the greater pressure is also that rent is a hard cost, whether it is operated or not, it is necessary to pay rent normally, especially in the face of force majeure external factors, the financial pressure faced by merchants will increase sharply. For example, in the early days of the outbreak, many businesses were forced to close their doors, but they also had to continue to pay rent. In order to complete self-help, some catering associations have taken the lead in issuing proposals, hoping that landlords will reduce the rent of catering enterprises.

Where do influencer brands go from here?

In this wave of closures, many brands have been the "king of traffic", such as the Internet celebrity brand Tea Yan Yue. Since the beginning of this year, The tea face is pleasant three times concentrated on the closure of the store, and recently the tea face is pleasant because the employees have exposed the news on Weibo and Xiaohongshu that the average working hour is 11 hours, but the hourly salary is only 6-9 yuan, which is once again on the hot search, and the discussion about "why the tea face can't go out of Changsha" in the industry is endless.

"The continuation and recurrence of the domestic epidemic has caused a relatively large impact on the flow of people and cross-city punch-in tourism projects. Strategic errors in the market layout of Tea Beauty are the core reasons for today's predicament. Its store density in Changsha is too high, ten steps a store, and too little development in other provinces, which will naturally limit the expansion of consumption. Under the reality of repeated epidemics, the reduction of passenger flow will continue to increase. Closing the shop is a rational behavior and strategy for the tea face. Zhu Danpeng, an analyst in the Chinese food industry, told the 21st Century Business Herald reporter.

"However, the brand still has its own core tone, and now the physical store business is not good, after making some adjustments, the brand still has a certain core competitiveness, such as his brand tone, brand traffic, etc. In the current consumption background, the fan base is also very important for the support of the brand." Zhu Danpeng said frankly.

In recent years, the catering model that focuses on urban culture has also become a path to build an internet celebrity store. On December 8, Wuhan Liyoucheng, which advertised "more than 10,000 square meters of old Wuhan immersive catering", was opened for trial operation.

"We spent nearly two years sourcing old scenery objects from all over the country, and finally created a city of memories covering an area of 6,000 square meters and a height of 30 meters." Zhang Yawei, the manager of Li Youcheng, said that the reason for such an idea is that we, a group of native young men, miss the old Wuhan in our memory too much. We want to restore the local atmosphere of the alley streets, bungalows, bamboo beds, and old Wuhan that we retained when we were young.

In Zhu Danpeng's view, Wuhan Liyoucheng and Changsha specialty "Wenheyou" business model is similar, are towards the height of the city's cultural business card to build, and there is the support of the government, coupled with the rise of the current national tide culture, there is a large consumer market, which is a popular trend in the catering industry.

"However, the problem is that many stores are only short-lived, so how to achieve long-term development on the basis of cultural dividends is the key, which involves whether the brand's industrial chain is complete, whether product quality can be guaranteed, whether customer stickiness can be maintained, and work hard in these dimensions so that consumers will not be quickly abandoned." Zhu Danpeng told the 21st Century Business Herald reporter.

The next stop in the restaurant industry is crisis and opportunity

There is no shortage of new forces in the dining industry in 2021.

A catering brand hatched by the Feeding Group that has both milk tea and hot pot is called "Cobble Hot Pot Tea Rest". In the past four or five years, Xiang xiang has become the fastest growing brand in the catering industry, opening a new store in about 13 days on average. When the epidemic came, Xiang Xiang instead bucked the trend and gained momentum, with public information showing that it has more than 140 stores across the country. In 2020, it was rated as the fastest growing catering brand in the catering industry, with an average of 1 store opened every 9 days.

Similarly, capital has not given up the catering industry, and the coffee industry has exploded in an instant this year, in fact, more reasons are the help of capital.

According to incomplete statistics, in 2021, there will be 16 financing incidents in the coffee field. For example, like M stand, illy, Manner, three and a half tons, etc., even Luckin, which was delisted after the financial fraud exposure, has once again gained the attention of capital.

Now the "audience", including investors, may want to see the horse racing between brands. Who can be the top, who can successfully encircle starbucks, is the most important.

With the improvement of urban consumption level, coffee has also emerged an increasingly homogeneous category. In order to combat the inner volume, merchants choose to misplaced competition, some began to work third-party space, some chose to differentiate in services, and some focused on the appearance of products.

Relying on the track burned out by capital, it is not a big problem to hold on for a few years, but after the virtual fire recedes, whether these products can get a good ending still needs attention.

In addition, the competition for the online market has also become the keyword of the catering industry in 2021.

According to the "2021 Annual Report on China's Catering Industry" jointly released by the China Hotel Association and Xinhua Net, under the epidemic situation, due to the stagnation or reduction of offline business, some catering enterprises that did not do online sales before have started takeaways; some catering enterprises have tried to do retail sales of semi-finished products, finished products and ingredients; and some catering enterprises have opened online ordering and telephone reservation platforms to develop dishes suitable for Internet sales, and launched online bookings, online booking stores, home delivery and other services.

Pure dine-in or exclusive takeaway, these two types are a minority in the catering enterprises, more companies use the "double home" model, from the perspective of input-output ratio, this is already the most pragmatic path for the catering industry to fight uncertainty.

However, there are also new difficulties in the takeaway business model. The most intuitive problem is how to set up the takeaway menu of the restaurant, when ordering takeaway, there is a layer of mobile phone screen between the customer and the restaurant, the store picture, the meal description, the SKU design are the key information that attracts attention, the choice is too small to meet the customer, too much choice and easy to lead to "choice difficulty".

Secondly, there is always a certain proportion of orders that may have a "rollover" problem, unlike dine-in customers can immediately feedback and solve, how takeaway stores carry out after-sales, how to cleverly reply to the customer's "bad reviews", not only determine whether the customer will repurchase, but also affect the subsequent feelings of other customers when referring to the review.

In addition, the ranking rules of takeaway stores are affected by various factors such as distance and rating, just like clothing stores just entered the online store mode from physical stores 20 years ago, catering companies also need to spend time and energy to study and adapt to the interaction and service model of the takeaway period.

The catering industry, which has changed rapidly, has never lacked those who have come to the top. In the new ecology built under the epidemic, the coexistence of shuffling and opportunities has also become a new test that owners must face.

( Intern Ruonan Wen also contributed to this article)

Editor of this issue: Wang Tingting