China’s biggest hot pot chain Haidilao is slowing its rollout of new restaurants and increasing diversification of its fare.
The move comes as it looks to temper its rapid expansion during the coronavirus pandemic to cope with a subsequent slump in consumer spending.
Haidilao, which became so popular in recent years that it appeased customers in hours-long queues for its soups by providing free manicures, snacks and shoe shines, is at the forefront of a reckoning in China’s restaurant industry post-pandemic. The chain has seen falling table turnover rates and profits as consumers dine out less and new stores cannibalise business at older locations.
“We will open stores based on market demand, and compared to before, will appropriately slow down our opening pace,” the company said in a written response to Reuters’ questions about its strategy.
China’s catering industry shrank 4.5 per cent in August, before recovering for growth of 3.1 per cent last month. Analysts said it will likely remain volatile for some time amid the country’s broader patchy economic recovery.
“This year, fresh waves of the epidemic happened repeatedly, and passenger flow in commercial areas is volatile, affecting the recovery of core business indicators,” Tianfeng Securities wrote in a research note last month.
