The fellows simply can't afford to eat the fellows' chickens

author:Eat a hundred flavors

Source: Interesting report

It is said that fellow villagers do not pit fellow villagers, but "fellow chickens" may make fellow villagers a little chilled.

Although the brand name is simple and down-to-earth, the fellow villagers simply cannot afford to eat the chicken of the fellow villagers, and even the workers complain that it is too expensive.

Behind the joke that "a monthly salary of 20,000 dare not order three meat dishes in the chicken of the fellows" is the sadness of beating workers to eat a simple fast food and be meticulous.

From the takeaway software, the unit price of Beijing's hometown chicken set menu, 30 yuan to eat a fast food, the budget of hometown chicken is indeed a little reluctant.

Is the freedom of Chinese fast food for migrant workers about to disappear?

More than a family of fellow chickens is said to have a "high price"

The steaming "big pot of rice", the small plates for stir-frying are placed in a row, and the meals are lined up at the food pick-up area... The Laoxiang Chicken Store in Beijing's Xinzhongguan Shopping Center has become a small canteen for migrant workers nearby.

Another finding is that unlike "single order", it is more common for multiple people to order several dishes to eat together in fellow chickens.

Three colleagues who ate lunch together told Interesting that they spent 99 yuan to order two vegetarian and three meat with staple food, with many dishes and good prices, "but it is not cost-effective to eat alone."

The fellows simply can't afford to eat the fellows' chickens

Hometown Chicken Store. Source: Interesting report

The last sentence is also the intuitive feeling of many people about the hometown chicken.

17 yuan of fried local chicken, 18 yuan of small fried meat from the farmhouse, 16 yuan of spicy chicken miscellaneous, 7 yuan of homemade potato chips, 8 yuan of fried broccoli, 2 yuan for the staple food, and 19 yuan for a bowl of signature Feixi old hen soup. No matter how you arrange the combination, a meat and a vegetarian staple food in the store costs about 26-30 yuan.

The great value packages for takeaway don't seem to be cheaper either. A "four-piece set" of two dishes, a staple and an egg custard even costs 30-40 yuan.

The fellows simply can't afford to eat the fellows' chickens

Laoxiang Chicken Beijing takeaway set

The prospectus of Laoxiang Chicken also wrote that the unit price of Laoxiang Chicken's stores nationwide increased from 29.71 yuan in 2019 to 30.66 yuan in 2021, even if it is located in the second-tier city of Hefei, the unit price of customers is close to 30 yuan.

Consumers in Beijing and Shanghai may find it more expensive, and the per capita price of many stores on Dianping has become close to 40 yuan.

It's not just fellow chickens whose fast food is said to be expensive. The per capita price of emerging noodle restaurant brands and Fu Lao Noodles, Ma Jiyong and Chen Xianggui in Dianping is 35-45 yuan. Yang Guo's spicy hot prospectus in Beijing and Shanghai customer unit price exceeded 30 yuan. And the former originator of fast food, Ajisen ramen, which was approaching the 50 yuan mark in 2017, has long been operating poorly.

The intuitive feeling that "fast food freedom is about to be lost" is related to the rapid expansion of emerging fast food brands.

China's restaurant chaining rate has increased from 13% in 2019 to 18% in 2021, and emerging brands are even more in the race.

The rural base of more than 600 stores in the country is located in the southwest, Mr. Rice with more than 500 stores and the uncle of more than 400 stores are based in Jiangsu and Zhejiang, more than 400 stores of Hefu Lao noodles are distributed in first- and second-tier cities, and the emerging beef noodles Chen Xianggui of more than 200 stores have surpassed the old ramen brand Oriental Palace.

When the new Chinese fast food crowded into the public eye in absolute numbers, the surrounded migrant workers had the impression that "eating bowl noodles" or "eating rice bowls" became more expensive.

This also raises the soul question: In today's generally high cost of living, if meals are only expensive, will everyone's complaints be so big?

Why do you think

"Fast food price does not match value"?

Everyone's complaining about "expensive" is more to say that "price and value" do not match.

Although the average price of McDonald's KFC in Beijing Dianping is about 33-45 yuan, it is close to the unit price of emerging Chinese fast food; Even McDonald's KFC's low-priced set menus have risen, but everyone's fiercest fire is still aimed at Chinese fast food such as hometown chickens.

40 yuan to eat a full set of hamburger fries chicken nuggets Coke is barely acceptable, but 40 yuan to buy a "three-spelled rice bowl" still sounds more like a long-distance high-speed train to eat hot rice and have to spend unjustified money.

Few people are willing to be this "big wrongdoer". According to Euromonitor International's 2022 White Paper on Chinese Fast Food Chains in China, although more than eighty percent of the surveyed consumers spend between 10-40 yuan on fast food, 21-30 yuan is the mainstream, and more than 40 yuan is a sensitive area.

For the same price, everyone always feels that Chinese fast food is more against the sky than hamburger fries, and it is somewhat "more strict with their own children" mentality.

After all, regular dishes such as tomato scrambled eggs, stir-fried meat with green peppers, and hot noodle soup can also be made at home, and everyone does not expect too much from the taste of these daily familiar dishes, just to have an unthinking choice when in a hurry, a simple appetite to eat well.

Therefore, where the price is higher, it is inevitable that people will mutter, "Isn't it just a home-cooked dish, why sell 40 pieces".

In addition, in terms of making people feel "expensive and worth the money", Chinese fast food is indeed too subtle in terms of performance and publicity.

"Instead of raising prices directly and bluntly on the original product, a better way is to evolve. For example, the product is healthier, the materials are more solid, the packaging design is more attentive and so on. Zhang Yi, founder and CEO of iMedia Consulting, said.

Simply put, the reason that consumers can see and persuade is the biggest confidence for fast food to become expensive.

For example, the selling point of product upgrades such as "selected Angus beef" and "double-layer meatloaf" is that McDonald's Angus Cowburger dared to sell 40 yuan of capital when it was launched. There is also a dish in the hometown chicken that consumers are more convinced: Feixi old hen soup. Officially, it is stewed with 180-day-old Feixi hens and Nongfu Spring water. Although the price is not low, 19 yuan a small bowl, but the sales rushed to the third place after rice and steamed eggs.

As for the improvement of services, environment, etc., the visibility and perception of consumers with the naked eye is the most important. "Standardized construction" is transmitted from the central kitchen system and the employee management manual to the end of the chain, that is, the taste of each store's dishes can reach 90 points, and the serving speed is basically the same as the intuitive feeling that "chain brands are guaranteed".

After all, when the idea of "too expensive" arises, subtly good experiences can also emotionally convince consumers.

"Standardization" can enhance the brand upgrade of chain restaurants, but if you put on the standardization of food taste, people can accept that hamburger fries are "pre-made dishes and reprocessed" to fry and fry, and the attitude towards Chinese food is still very awkward: I don't spend less money, just let me eat cooking bags?

Interesting report: When asked the store staff if the dishes were pre-made dishes, the answer was that chicken legs and steamed eggs were stewed and steamed in the store, and most meals were also stir-fried in the store. The clerk pointed to the marinade, and the chicken thighs were steaming hot in the grumbling sauce.

The prospectus of Laoxiang Chicken shows that the central kitchen sends semi-finished products to the store for processing, and "the store then completes the final product by steaming, stewing, frying, stir-frying, etc.", and the products are mainly Feixi old hen white stripe chicken, buckle meat, noodles, wontons, chicken sauce spicy fish bags, etc.

But from Meituan and Dianping, consumers' evaluation of Laoxiang chicken dishes is more four words: "decent". Since there are more advanced stir-fry steps than "direct heating of the cooking package", eating in the mouth only feels that the taste is only "passable", diners' thinking about this fast food is more focused on the cost performance: the taste is just like that, is it really worth selling 40 yuan?

Is it a helpless move to become expensive?

Chinese fast food also has grievances in my heart: I am always scolded for being too expensive, but in fact, I don't make money.

Taking Laoxiang Chicken as an example, its revenue growth rate during the epidemic was not bad, with annual revenue growth rates of 20.8% and 27.18% in 2020 and 2021 respectively. But there is not much net profit behind the glamor: from 2019 to the first half of 2022, the net profit of Laoxiang Chicken in the same period was 159 million, 105 million, 135 million and 76 million, respectively.

Fast food with small profits and quick sales is not easy to make a profit.

The average net profit rate of Lao Niang Uncle, Lao Xiang Ji and Country Key in the past three years is less than 4%, which is a gap with 8%-12% in the catering industry. Hefu Lao Mian, which was valued at 7 billion yuan, only turned a profit in the first half of 2021, and the plan to open thousands of stores was also shelved.

It is difficult to make money, and it is necessary to deal with the "three highs" pressure of high rent, high labor costs, and high food prices.

Take the hometown chicken, the ingredients account for 40% of the total cost of the hometown chicken, of which the chicken used to make soup and vegetable wrapped wontons occupies the C position. In order to reduce the cost of ingredients, Laoxiang Chicken reduces the procurement and circulation cost of chicken by building its own hen farm.

Even so, there are quite a few places that cost money.

The old hens used by the hometown chickens are more expensive than the ordinary white-feathered chickens themselves. According to Deppon Securities Research Report, the same is 1 pound of long meat, white feather chicken only eats 2 kilograms of feed, while the old hen eats 4-5 kilograms. In addition, Nongfu Spring, the "high-grade spring water" used to make chicken soup, also accounts for 1% of the cost price.

The expansion of the store size has also increased procurement costs. In 2019, the money spent on raw material procurement was 850 million yuan, and two years later, it will cost 1.39 billion yuan.

The rent of thousands of stores is not a small amount. What's more, Deppon Securities Research Report shows that nearly 60% of Laoxiang Chicken's stores are stationed in white-collar office buildings, business districts and shopping malls, and 70% of the stores cover an area between 260 square meters and 300 square meters.

Behind the heroism of spacious stores in prosperous areas is high rents, and the business model of directly operated stores accounting for eighty percent also means that Laoxiang Chicken brands have to pay more store property fees, fixed asset depreciation expenses and other categories.

The fellows simply can't afford to eat the fellows' chickens

The commercial street lot settled by the catering brand is rented expensively. Source: Figureworm Creative

In order to gain more customer flow, it is the consensus of fast food brands to choose a busy market. Five to six percent of Mr. Rice's shops are located in commercial streets, and 40 to 45 percent of the shops in the latter contract lunch and dinner for office workers – the high rents behind the traffic are also a common challenge for fast food brands.

Expenses are large and it is difficult to make money, not to mention the fast food industry, which relies on large-scale profits, and how to earn the expansion funds of "opening more stores in the future".

Even if brands have "bitterness", it is not smart to pass on the increased costs directly to consumers.

"The pricing of Chinese restaurants really can't be too high, but rely on scale to win the market. China's market is large enough to doubt the low-price strategy of the Chinese fast food industry. Zhang Yi said.

Upgrading fast food brands takes time, and upgrades in ingredients, tastes, environments and services won't happen overnight. But if it's the price that jumps over the gate first, this may be the most risky jump.