Haidilao Sharpens the Heat on its Hot‑Pot Empire
That bustling hot‑pot chain you hear about everywhere—Haidilao, the fire‑and‑spice juggernaut—has decided to turn off the lights in about 300 of its less-than‑roaring restaurants. All of this after a
“let‑the‑world‑burn” expansion over the past two years.
What’s the Thermometer Reading?
- “We’ll temporarily shut 300 outlets for up to two years,” the Hong Kong‑listed company said in a filing on Friday, November 5.
- No employees are left high‑and‑dry; they will be relocated within Haidilao’s own big family.
- While most of the closures hit China hard, a handful of stalls in overseas markets are on the chopping block too.
- The exact list of markets remains under wraps, but you know—letting the heat die down where it isn’t sizzling.
Why the Heat Fell Out?
Haidilao’s growth story has been nothing short of a fire‑world. As of end‑June 2021, it ran 1,597 restaurants worldwide—over a 70% jump from 1,020 a year earlier. The bulk of that (1,491) sat in Mainland China. But big numbers don’t always mean they’re cooking up profit.
- Time to break‑even for new shops has stretched longer than before.
- Cash‑returns lagged, and the lingering pandemic punch from Covid‑19 has kept some spots stuck in low‑volume mode.
- In 2021’s first half, the group still pulled in more revenue and profit, but the table turnover rate slipped to 3.0 round‑trips a day (down from 3.3 in 2020).
- That shortfall peeled away about a third of Haidilao’s stock value in just nine straight days from late October through early November.
“Woodpecker” Tactics
Calling up its “Woodpecker” plan, Haidilao is pulling out the claw to knock out any restaurant that’s not getting its groove right—both within China and overseas.
- Focus on problem spots: identify and boost under‑performing outlets.
- Revamp internal departments and restore a regional management vibe that’s more on‑track than a last‑minute roast.
- Put a throttle on expansion: “If the average table turnover stays below four per day, no big new openings for now.”
Moving Forward
Haidilao’s next move is clear: tighten its belt, keep the hot‑pot flames alive, and treat its restaurants like a well‑cooked dish that needs a good seasoning. As the group slashes the number of new stores, it will focus on making existing locations hotter than ever.
— Source : The Business Times, with permission.