The popular hotpot restaurant chain Haidilao is closing down 300 of its outlets globally due to the outcome of its mass expansion strategy.
On 5 November 2021, Haidilao released a statement on its official Weibo account. “We will gradually close down around 300 outlets where operations have not met expectations by 31 December 2021 (Some outlets will be temporarily closed to decide whether to reopen, the deciding period will not exceed 2 years),” it stated.
Haidilao said that it will not lay off its employees and will appropriately help them to settle down.
“These outlets are below expectations, mainly due to the mass expansion strategy that was introduced in 2019, the outcomes include: error in choosing locations, change in organisational structure that is not understandable and tiring, inadequate number of excellent managers, and over-confidence in the profit KPI rate,” said the statement.
The board of directors have also come up with a plan and will take measures to help with the current situation.
Haidilao still remains the largest hotpot chain in China, but its share price has fallen by 75 per cent so far this year, cutting its market value by HK$350 billion, according to Global Times.
Haidilao has always been praised for its exceptional service and delicious food. What do you think about this? Let us know in the comments!
