Haidilao to suspend operation of 300 stores due to low customer traffic

Chinese hot pot chain Haidilao has announced plans to shut down or suspend the operation of about 300 Haidilao restaurants with relatively low customer traffic and unsatisfying results of operation by the end of this year. 

On 5 November, the company announced a voluntary business update. In a statement, Haidilao said after reviewing the operating performance of its restaurants, it decided to adjust its restaurant expansion planning decisions, shutting down or suspending the operation of about 300 Haidilao restaurants with relatively low customer traffic and unsatisfying results of operation gradually by 31 December 2021, of which some restaurants will be temporarily closed of no more than two years and resume operation in appropriate times.

Haidilao added that it will not lay off employees and will properly settle the employees of such restaurants within the company. 

Meanwhile, Haidilao has also announced the “Woodpecker” plan led by the executive director and the deputy chief executive officer Yang Lijuan. According to the plan, Haidilao will continue to pay attention to the restaurants with unsatisfying results of operations, including overseas restaurants, and taking improvement measures accordingly. Haidilao will also rebuild and strengthen part of the functional departments of the group and restore the regional management system.

The company will also slow down its business expansion plan, adding that if the average table turnover rate of Haidilao restaurants is less than four times per day, no new Haidilao restaurants will be opened on a large scale in principle.

Currently, Haidilao is operating five restaurants in Hong Kong at Yau Ma Tei, Tsim Sha Tsui, Causeway Bay, Tsuen Wan and Tseung Kwan O. According to its website, its presence includes its native China, Singapore, the US, South Korea, Japan, Canada, Australia, Malaysia, Vietnam and the UK. As of 30 June 2021, Haidilao has a total of 1,597 stores across the global, according to its latest interim report. 

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