The owner of the noodle restaurant sells 100 bowls of noodles a day just enough to pay the rent, and industry insiders: it is necessary to make good use of online marketing methods to improve business efficiency

Jimu News

2024-04-24 11:57Posted on the official account of Hubei Chutian Metropolis Daily

Jimu News correspondent Jun Meng

"Probably all the bosses will think at the end of the month, I'm working for the landlord. Recently, a noodle restaurant owner in Shanghai who has just switched to catering has complained about the high rent, which has sparked heated discussions in the industry.

It is understood that Lu Liang, the owner of this noodle restaurant, was previously in the antique business, and changed careers to open this noodle restaurant in October last year. The monthly rent of 23,000 yuan accounts for 30%-40% of the monthly turnover, and there is little profit left after deducting the cost of raw materials and labor.

"Although the catering industry is also recovering, I feel that the rent market is recovering faster," according to Lu Liang, after 2018, the rent increase is about 20%-30%. Taking his own shop as an example, he signed a contract every two years, and the rent would increase by 5% in the second year, and he felt a lot of pressure every time he received a WeChat message from the landlord. "I have to pay 3 months' rent at once, which is actually quite powerful, and the turnover of a month may not be enough, and all the bosses may feel that they are working for the landlord at the end of the month. Lu Liang said.

The owner said that almost all of his current income is used to pay rent, which makes him feel like he is working for the landlord (video screenshot)

Lu Liang introduced that the noodle restaurant now sells about 100 bowls of noodles every day, and the income is almost just enough to cover the rent, and he has to pay the cost of labor and raw materials. According to his calculations, if he can sell more than 150 bowls of noodles a day, he may make a profit.

The traditional catering industry has always had the saying of "three highs and one low", that is, high rent, high labor costs, high prices of ingredients, and low profit margins. Public information shows that in recent years, the price of commercial real estate has risen rapidly, and the rent has risen, which has brought huge pressure to the catering operation. According to the "2023 China Catering Annual Report", the three expenses of rent, manpower, and food ingredients basically account for 70%-75% of the total cost of merchants, and after deducting taxes, depreciation of fixed assets and other losses, the profit margin is usually only 5%-10%.

"Everyone thinks that catering is a low-barrier industry, but that's not the case. A senior industry insider with more than 10 years of experience in catering entrepreneurship said that in recent years, competition in the catering industry has intensified, and the challenge to entrepreneurs' business ability has also risen sharply. Operators should face the "three highs" of "high rent, high labor cost, and high food cost" of traditional catering, and make good use of online marketing methods such as takeaway and group buying to increase daily positive cash flow while diluting fixed costs such as rent as much as possible to improve operational efficiency.

According to the analysis of the above-mentioned people, high rent and labor costs are the main cost items that crush many catering businesses. If the cumulative average turnover of the three days does not cover the monthly rent (the proportion of rent to monthly income exceeds 10%), the operator should stop the loss in time and adjust the operation strategy.

(Source: Jimu News)

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