The food and beverage industry was the most impacted and devastated business during the COVID pandemic, costing hundreds of billions of dollars in revenue loss and millions of jobs shuttered across the globe. Haidilao (6862.HK), the most dominant hot pot chain in China with 1,298 stores globally and employing a workforce upwards of 15,000, was not spared from this devastation. But the famous hot pot chain’s losses due to the pandemic was short-lived and was largely confined to the first half of 2020.
During the latter part of 2020, Haidilao saw a full recovery of its overall performance. Sandalwood data indicates a bounce back for the company’s overall daily sales value in late December 2020 to the same period a year ago. Taking a further peak into the regional breakout, we observed the dominant role played by Tier 3 and below cities towards such recovery with robust double-digit growth at +66% y/y, while Tier 1 and Tier 2 cities experience negative and mild growth rate at -10% y/y and +2% y/y respectively.
Such dominance could be attributed in part to Haidilao’s regional focus of its store expansion strategy. As shown in Sandalwood’s web-craping data – among the 468 new stores opened since Haidilao resumed operation post-COVID until December 2020, 49% are in Tier 3 and below cities. Meanwhile, Tier 1 and Tier 2 cities account for 15% and 37% of the company store expansion respectively.
Is Haidilao’s overall store expansion strategy effective? An analysis on its per store sales value will tell. As sales revenue of those opened pre-COVID merely reached 64% of December 2019 level, the company’s overall restaurant sales increase year-over-year can be mainly attributed to new stores in operation.
To get a full grasp of Haidilao’s performance and post-COVID recovery progress, it is then vital to fully examine its store expansion trajectory. At Sandalwood, not only do we track the number of stores for Haidilao with a capture rate of 90% through web-scraping on a real-time basis, but we also provide insights on daily sales value and average revenue per store with demographic information. As an added bonus, Sandalwood card statement data provides crucial information on user retention.
To learn more about the data behind this article and what Sandalwood has to offer, visit http://www.sandalwoodadvisors.com.
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