Haidilao to Reopen Stores Closed for Cost Reductions
Haidilao, a popular Chinese hot pot restaurant chain, on August 30 released its financial report for the first half of this year. The company revealed that it plans to start its “Hard Bone” plan, and is considering the possibility of resuming operations at some stores that had been closed under last year’s “Woodpecker Plan” for the purposes of cost reduction.
Under the influence of continuing pandemic prevention measures, Haidilao recorded a total operating income of 16.764 billion yuan ($2.43 billion) and a net loss of 267 million yuan in the first half of 2022.
According to the financial report, in the first half of 2022, 18 new restaurants were opened, while 26 restaurants were shut down due to the Woodpecker Plan. As of June 30, 2022, there were 1,435 Haidilao restaurants, of which 1,310 were located in the Chinese mainland, 22 were located in Hong Kong, Macao and Taiwan, and 103 were located in 11 other countries. Haidilao received 146 million customers in the first half of the year.
Haidilao revealed in its financial report that the management team will continue to reassess site selection, property conditions, staffing, business areas, business improvement potential and other factors pertaining to the closed stores in the future, and will gradually select some that meet the conditions for reopening.
The impacts of pandemic control measures, which began more than two and a half years ago, on China’s catering industry are still significant. According to data released by the country’s National Bureau of Statistics, from January to June 2022, China’s catering revenue decreased by 7.7% year-on-year. From March to May this year, an average of more than 200 Haidilao stores each day suspended dining in services.
Facing the continuous impact of the pandemic, Haidilao has been striving to meet needs of consumers other than dining in at restaurants. In mid-June this year, Haidilao established a community operations center, focusing on diversified catering service innovation with the community operation mode of “take-out + community + livestreaming + online mall.” According to its report, from January to June this year, income from Haidilao’s take-out business increased significantly.
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Haidilao’s business scope now covers ingredients, condiments, supply chain, human resources, information technology and store decoration. In the second half of 2022, Haidilao will continue to promote product innovation and enhance the dining experience. At the same time, Haidilao will strategically seek to acquire high-quality resources to further enrich the catering business and customer base.