Text | Professional catering network Hou Shuoli
The "rich second generation" in the hot pot industry can't hold it anymore?
"Brother Hui" hot pot was once popular in Shanghai, focusing on high-end Cantonese hot pot, with more than 500 per capita, and stores were opened all over the country, and was once called "the favorite hot pot restaurant of stars".
However, in recent years, it has been revealed that stores have been shrinking, net profits have been losing year after year, and stock prices have continued to plummet.
In terms of revenue, the net profit attributable to shareholders of the parent company has been in a state of loss all year round, and the asset-liability ratio is as high as 524.44%, while the number of the company's stores is also shrinking sharply.
Coincidentally, high-priced restaurants such as Xiabu's barbecue brand "Zhan Yao", Jiumaojiu's "So Uncle", and Din Tai Fung, which is known as the "Michelin of the steamed bun world", are also not having a good time.
Under the pressure of the general environment, the downgrade of consumption is unstoppable, and the situation of Huige hot pot is just a microcosm of the current industry, and it is an indisputable fact that high-priced restaurants are facing difficulties......
The debt ratio is over 520%! Net profit has been losing year after year, and there is only 1 store left
Back in 2004, in a historic bungalow on Julu Road in Shanghai, Huige hot pot made its debut and became a new landmark of high-end Cantonese hot pot.
Today, stores are shrinking, net profits are falling, and stock prices are plummeting..... How popular it used to be, how depressed it is now. What happened to this hot pot restaurant, which is known as "the favorite hot pot restaurant of celebrities"?
1. The store has shrunk to 1 percent, and there are only 7 stores left in the country
As a well-known high-end hot pot in Shanghai, Hui Ge Hot Pot was founded in Shanghai in 2004, focusing on high-end Cantonese hot pot, which is deeply loved by stars such as Jay Chou.
The unit price of Huige hot pot is more than 500 yuan, and in 2004, the monthly salary of a waiter was only 800 yuan, and Shanghai is full of small hot pot restaurants with an average consumption of 20-30 yuan.
In addition to making high-end hot pot, around 2012, the founder of Huige hot pot also opened a "Xiaohuige hot pot" that focuses on the mid-range and is more affordable in Shanghai Wujiaochang. In just a few years, Xiaohuige hot pot has also developed rapidly, and has opened a number of stores in Beijing, Hefei, Wuxi and other cities.
In terms of the number of stores, according to relevant introductions, Huige hot pot has hundreds of stores across the country, with about 3,500 employees. In 2020, the number of stores was reduced to 25. According to the latest annual report data of Longhui International Holdings, the number of restaurants will drop to 9 by the end of 2023.
Today, the store is in the single digits, shrunk to 10%. According to Dianping, there are only 7 stores left in Shanghai, including 3 "Brother Hui" hot pot and 4 "Brother Xiao Hui hot pot".
2. Net profit has been losing year after year, and the debt ratio exceeds 520%
In terms of revenue, the annual report data shows that from 2019 to 2022, the revenue of its parent company Longhui International Holdings plummeted, from 419 million yuan in 2019 to 72 million yuan in 2022, and the total revenue in 2023 rebounded slightly to 82 million yuan.
The net profit attributable to shareholders of the parent company has been in a state of loss all year round, with a loss of 62 million yuan in 2022 and a loss of 14 million yuan in 2023. Longhui International Holdings said that the decrease in losses in 2023 was mainly due to the rebound in customer traffic after the epidemic and the closure of three underperforming stores.
The recently released 2024 interim results are only more than 20 million yuan. At the same time, the total liabilities of Longhui International Holdings have been at a high level for a long time, and the total liabilities will expand to 236 million yuan in 2023, with total assets of only 45 million yuan and an asset-liability ratio of 524.44%.
In its latest annual report, Longhui International Holdings stated that the three-year pandemic and the slowdown in macroeconomic growth have had a huge impact on the Group's business development. In order to preserve its viability as a going concern, the Group has closed a number of stores in the past three years and laid off the corresponding employees.
The number of stores and turnover both died, and the life of high-order catering was not good......
High-order catering refers to a form of consumption in which consumers choose high-end, high-quality catering establishments for consumption on specific occasions or special needs.
This type of consumer usually has a high spending power and the demand for quality, and they choose high-order dining establishments to enjoy unique dishes, exquisite dining environments and professional service experience.
However, with the sharp reduction in demand for business and social banquets and the emergence of consumption downgrades, high-priced catering that cannot withstand market changes has to move towards the fate of closing......
1. Under the downgrade of consumption, the market with high customer unit price has shrunk
The decline in consumption power in the past two years has dealt a heavy blow to the catering industry, and some high-priced restaurants have fallen into a "wave of store closures". For hot pot brands with a unit price of up to 550 yuan, survival can also be described as very difficult.
Many consumers today are becoming more price-sensitive and cost-effective. Careful budgeting has become a normalized consumption requirement, and consumers are gradually entering a "low desire" society dominated by cost performance. Young people, who are the main consumers, have also begun to "can't afford to eat" hot pot with an average price of more than 500 yuan.
In addition, most of the consumers of hot pot are still at the middle and low level, so the audience of this type of high-end hot pot is still a relatively small part.
Since the beginning of this year, affected by the industry environment and market fluctuations, housing prices have fallen, the stock market has fallen, income has fallen, bonuses have fallen, and financial management has thundered, many industries have been hit, and a number of private enterprises have gone bankrupt and closed down. In this context, the number of consumers with high unit prices in first-tier cities is also decreasing, the demand for high-end business and social banquets is decreasing, and the frequency of high-end meals is also decreasing.
2. The rigid cost is too high, and the transformation is becoming more and more difficult
This year, the high-end restaurant market seems to be shrouded in fog, showing a downturn. The once radiant restaurants are disappearing one after another. In the face of consumption downgrade and fierce market competition, restaurants with high customer unit prices are facing severe challenges.
The first is the cost of ingredients, and one of the most important tasks of high-end catering is to make you see at a glance that it is expensive and justified. Therefore, high-end restaurants like to make a fuss about materials, services, and environment, which directly raises costs.
Secondly, the cost of manpower. Aside from expensive chefs, high-end catering is different from ordinary catering in that the cost of service links accounts for a high proportion, and the labor cost of high-end ingredients combined with Michelin chefs' cooking will naturally not be low.
Finally, the cost of rent. High-end restaurants tend to be located in the most prosperous areas, and the rent is much higher than that of ordinary restaurants. At the same time, the interior decoration should be armed to the trash can, and it is said that Beijing Tiago will invest nearly 30 million yuan to open a store, more than joining 3 Haidilao.
Although some restaurants have begun to try light operation models, try to reduce prices, change small stores, and launch low unit price set menus and other strategies to attract consumers. However, most high-end restaurants are under the pressure of rent, water, electricity, labor and other costs, and it is difficult to have a significant price reduction, and in the end they can only close the store and stop loss.
3. When the restaurant with a high unit price is cold, the contraction is a trend
The catering industry has entered an era of low profits. In Beijing, in the first half of this year, the total profit of the catering industry above designated size (annual revenue of more than 10 million yuan) was 180 million yuan, a year-on-year decrease of 88.8%; The profit margin is as low as 0.37%, less than 1%.
The dwindling flow of customers, coupled with the rise in rent, manpower and other costs, has made it more difficult for restaurant companies to maintain profitability, and the same is true for high-end restaurants.
Faced with this dilemma, many leading restaurant companies choose to shrink strategically. For example, Jiumaojiu previously closed its mid-to-high-end brand "Uncle Nawei". Uncle Nawei is positioned in light luxury Cantonese cuisine, with a per capita consumer price of about 140 yuan. In 2023, Uncle Nawei's revenue, turnover rate, and turnover rate will all decline sharply, so he will be "abandoned" by Jiumaojiu;
With a history of more than 50 years, Din Tai Fung is famous for its signature xiao long bao and is known as the "Michelin of steamed buns". In recent years, as Din Tai Fung's business began to decline and the flow of customers decreased, Din Tai Fung has gradually closed stores, closing 14 stores by the end of October, and the stores in North China have been "wiped out";
Xiabu Xiabu's high-end barbecue brand "Zhan Yao", as an exploration of Xiabu Xiabu's cross-border barbecue track, has opened 8 stores in Shanghai, Guangzhou and other places. However, since the beginning of the year, the last store in the country has also been closed........
Behind the closure of high-priced restaurants, there is a more severe battle for survival. For catering entrepreneurs, under the effect of the severe catering market environment and economic cycle, many bosses choose to "play the table".
In fact, there is no shame in playing the table, but it is a wise move to follow the trend. Playing the card table can also better let the restaurant take a breather, see why other people's cards are playing wonderfully, and when you think about it, you are ready, and we will continue to do it!
Summary of Professional Catering Network:
In the torrent of the fate of the times, the decline of "Huige Hot Pot" is not an exception, but a microcosm of the high-priced catering represented by it.
Nowadays, catering is gradually returning to the era of gross profit, and high-premium specialty restaurants are slowly squeezing out the "bubble". Price-sensitive consumers have also entered the era of rational consumption. A number of specialty restaurants with high customer orders are choosing to use "shrinkage" to stay at the dining table.
The so-called closure of the store cannot be understood as a "retreat", perhaps in order to better "survive", at least to stay at the table and have a chance to survive.
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Editor-in-Chief丨Chen Qing Co-ordinator| Yang Yang Ed. | Hou Shuoli