Why is the service fee cancelled after 20 years? Quanjude: Can't be the enemy of consumers

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Although the large service fee has been questioned, complained and even opposed by consumers, Quanjude service fee has been charged for 20 years. However, a few days ago, Quanjude suddenly announced that all store halls no longer charge service fees, and the overall price of dishes was reduced by 10% to 15%.

Why did Quanjude, which has always been a bit of a high-ranking person, cancel the service fee? The data shows that Quanjude's performance has continued to decline for three consecutive years, and this year' performance has been even more dismal under the influence of the epidemic. In this regard, Zhou Yanlong, general manager of Quanjude, said bluntly in an exclusive interview with China News Weekly, "Enterprises have indeed reached the point where they must change, and we cannot become the enemy of consumers." ”

However, industry insiders said that this year's epidemic has a huge impact on the catering industry, Quanjude wants to turn over, but also needs to pay more, including breakthroughs in quality improvement and service, and the format also needs to be further transformed, which is also a problem that the entire catering industry needs to solve urgently.

The service fee has made Quanjude repeatedly badly evaluated

Recently, Quanjude, which has a history of 156 years, suddenly announced changes. Its changes mainly include three aspects: one is that all store halls no longer charge service fees; the second is that the overall price of dishes has been reduced by 10% to 15%; the third is to innovate dishes and release 47 new dishes. This adjustment also quickly sparked heated discussions.

Quanjude has been charging service fees for more than 20 years. In the past, consumers who went to Quanjude to eat were required to pay a service fee of 10% to 15%. After the new policy, except for some special scenes, all store halls will no longer charge service fees.

The service fee has brought great profits to Quanjude, but it has also made Quanjude bear the infamy. Many of the bad reviews of Quanjude on the Internet are caused by service fees. "Collecting service fees but no services", "What is the charging standard and basis of service fees", netizens constantly questioned Quanjude.

On December 3, 2019, after Zhou Yanlong took office as the general manager of Quanjude, he read a lot of negative reports and netizen comments. He found that there was a fairly high percentage, all for service fees. Since then, Zhou Yanlong has begun to consider the cancellation of service fees.

However, before he could make a decision, the NEW CROWN outbreak suddenly broke out. In the first quarter of this year, Quanjude's revenue was about 180 million yuan, down 55.03% year-on-year; the operating profit loss was 94.489 million yuan, a year-on-year decrease of 598.02%; and the net profit attributable to the mother was 88.501 million yuan, a year-on-year decrease of 931.66%. Due to the delay in opening, some stores of Quanjude even need to rely on the support of takeaway business. At this time, Zhou Yanlong proposed to cancel the service fee from March.

But it is not easy to cancel the service fee. A store leader of Quanjude Group told China News Weekly that the cancellation of the service fee will lose at least 40 million yuan, so this decision was controversial at first, after all, cash flow is the main indicator of the group's store assessment; and initially thought it was a temporary measure during the epidemic, but it was later confirmed as a long-term measure.

In this regard, Zhou Yanlong explained to China News Weekly, "Catering is A× B= C, A is per capita consumption, B is passenger flow, and C is income." The first thing is to pay attention to the flow of customers, only by allowing more consumers to come back to experience, there may be income, at this time to give up some things. ”

This decision did work well. Since May, the passenger flow of Quanjude's various stores has rebounded in a straight line, although affected by the recurrence of the epidemic in June, the test effect has been interrupted, but it has strengthened Zhou Yanlong's confidence.

In Zhou Yanlong's view, after the epidemic, if enterprises only recover hard and passively, and continue to pursue excessively high per capita consumption, they will further overdraft the brand dividend. "We hope to mobilize the good feelings of consumers first, consumers can not come to us to eat, but we can not become the enemy of consumers, no one is willing to do business with a name."

More management mechanisms need to be clarified

Freezing three feet is not a cold day.

In recent years, Quanjude's operating performance has continued to decline. From 2017 to 2019, Quanjude's annual operating income was about 1.861 billion yuan, 1.777 billion yuan and 1.566 billion yuan, respectively, and the corresponding attributable net profit was about 136 million yuan, 73.0422 million yuan and 44.6279 million yuan, respectively, and these two sets of data showed a downward trend.

Relying solely on the cancellation of service fees is obviously not enough for Quanjude to save consumers and save the decline.

Lai Yang, executive vice president of the Beijing Business Economics Association, said that Quanjude has always priced according to the top catering level of Beijing roast duck. However, from the perspective of operation and management in these years, the reputation of consumers is not ideal, so the moderate return of prices is necessary and can also show the sincerity of reform. However, the most fundamental thing is to improve quality and service, improve operational capabilities and quality management capabilities.

For a long time, although Quanjude has been a listed company, the management mechanism has problems such as a relatively long decision-making cycle and an imperfect management chain. A staff member of Quanjude Group told China News Weekly that due to the group's weak control over the stores below, problems arose, but they could not be solved in time.

Quanjude gradually realized the seriousness of this problem. After the outbreak of the epidemic this year, Quanjude launched a takeaway business. Zhou Yanlong and the employees of the group's operation department drove to each store to order food anonymously, and then all of them were brought back to the group for unified evaluation. One of the dishes did not meet the group's requirements in all aspects of color and flavor. Zhou Yanlong, who has always been kind and kind, made a rare fire, directly buckled the dish upside down on the table, and asked loudly: How can this dish be sold to consumers? Later, the relevant person in charge of the store was also interviewed by Zhou Yanlong.

The staff member said that his department was responsible for supervising the store. "Nominally we supervise the store on behalf of the group, but in terms of rank we are lower than the store manager, and the problems we pointed out, the store wants to listen, if you don't want to listen, you don't listen, and the most fine is something."

In order to solve this problem, Zhou Yanlong and other management finally decided to add monthly assessment on the basis of the store's annual assessment, and greatly increased the assessment dimensions, such as human effectiveness, takeaway satisfaction, etc. If the store continues to fail to meet the standards, the person in charge will be adjusted. "This year, the head of the store has been adjusted." The staff told China News Weekly.

It is reported that the assessment dimension of the store will continue to increase in the future, such as the turnover rate.

"The original store is short of people to reach out to the group, in the future can not be so, we have to investigate why the store can not retain people", Zhou Yanlong said, operation and management capabilities are the guarantee of products and services, but also our shortcomings, Quanjude also needs to be comprehensively improved.

The transformation of Quanjude still needs to be accelerated

Due to the continuous decline in performance, Quanjude recently received an inquiry letter from the Shenzhen Stock Exchange for its annual report. Quanjude acknowledged the problem in its reply. "From an internal point of view, Quanjude's products and services lag behind market demand, especially the gap with the consumption perception of young customers. From the external point of view, the restaurant business type is more diversified and differentiated, the quanjude business model and product type are single, and the passenger flow shows a continuous downward trend. ”

At present, the rapid changes in the demand of the catering market are continuous, especially with the outbreak of the epidemic, this change is more drastic, and the test for enterprises is greater.

To this end, in April this year, Quanjude will use the first floor of its Beijing Heping Store as a test field to start the design and transformation, which is a hall of nearly 600 square meters, which will be made into a new Chinese small format model, which is expected to be launched in mid-September. It is aimed at the younger generation of consumers, and Quanjude hopes to meet their needs in many aspects such as eating, selfies, and dissemination.

In recent years, the breakthrough transformation to a small format model has been frequently borrowed by the catering field. Previously, Donglaishun launched the "Shabu Bureau", Xiao Nanguo launched the "Nan Xiaoguan", and Da Dong launched the "Xiao Da Dong". But it is worth noting that it is not a small area, and fewer items must be popular.

Lai Yang said that behind the popularity of small formats, it is not blindly catching up with the trend, but keeping up with the changes in the core needs of consumers. Quanjude needs to innovate in business models, such as concentrating on R&D investment in processing technology, and also screening and changing in terms of main dishes and menu combinations to adapt to changes.

However, the transformation of the main business is not an easy task. For Quanjude, this transformation requires a certain amount of time to trial and error, to gradually adapt to the needs of the market, and it is obviously difficult for the new business model to make up for the gap of a sharp decline in performance in the short term.

In this regard, Quanjude's consideration is to hope that the food industry can make up for the gap. In response to the inquiry of the Shenzhen Stock Exchange, Quanjude said that it will accelerate the development of the food industry and form a two-wheel drive of "catering business + food industry" to jointly support the development of the brand. At present, its food processing business is advancing, mainly for the production and sales of duck blanks and other foods.

Lai Yang said that Quanjude can increase profit points through the food industry, but it needs to avoid the traditional path of the food industry. Many long-established brands have been involved in the food processing industry, but often use high-temperature processing technology to obtain a long shelf life. However, such products usually have a serious loss of taste and taste, and the reputation is not good, so there are not many cases of overturning. Quanjude needs to study the needs of consumers and combine them with new food processing techniques, such as cold chain technology, to develop products that are more suitable for market demand.

Some experts also pointed out that Quanjude's food business is ultimately based on the catering business, and its core value is still roast duck catering, so enhancing the brand value and influence of its roast duck catering and improving the ability of catering services is still the first priority, otherwise it will be more than worth the loss, and Quanjude needs to accelerate the progress of transformation and upgrading.