Haidilao Closing 300 Restaurants, Some Will Reopen Within 2 Years
You’ve probably been living under a rock if you haven’t heard of Haidilao, the Chinese hotpot chain that takes customer service to a new level.
But the pandemic hasn’t been kind to hotpot chains given safe distancing measures.
Perhaps this is why Haidilao announced that it’s closing down 300 restaurants by the end of 2021.
This comes just a year after the chain founded by Zhang Yong expanded to 1,597 stores.
Haidilao closing 300 restaurants by end-2021
China Global Television Network reports that Haidilao announced it’ll close 300 underperforming locations by the end of 2021.
The voluntary announcement was released on the Hong Kong Exchanges and Clearing stock exchange on Friday (5 Nov).
The restaurants closing are those with “relatively low customer traffic and unsatisfying results of operations”.
However, some will only be temporarily closed “for no more than 2 years” and will reopen in the future.
Nor will any employees be laid off, as they will be moved to different locations.
The plan will include overseas restaurants, although it wasn’t stated as to whether those in Singapore will be affected.
544 new restaurants opened in 2020
Haidilao embarked on an opening spree last year and opened 544 new restaurants, reported CGTN.
This made for a total of 1,597 worldwide.
But the table turnover rate, which counts the number of times a table serves customers a day, has fallen to 3 times a day in the first half of 2021 compared to 4.8 times in 2019.
New restaurants saw even lower footfall at 2.3 times daily.
Net profits have dwindled to just 0.48% in the first half of 2021 compared to 8.81% in 2019.
As such, the company plans to scale down in future and slow down its expansion plans until the average table turnover rate reaches 4 times a day again.
Not an easy time for Haidilao
Covid-19 has made large social gatherings like hotpots inadvisable even at the best of times.
With lockdowns and limits on dining in globally since 2020, it’s no surprise to see that Haidilao has suffered much loss and dwindling profits.
It’s a far cry from the days when founder Zhang Yong was Singapore’s richest man.
Here’s hoping that the situation can improve so that minimal job impact will be felt by employees.
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