In the aftermath of the “Precooked Food Controversy,” Chinese chain restaurant Xiabéi has experienced a series of public relations missteps, leading to a significant drop in business and the closure of 10 stores. In recent times, Xiabéi has shifted its marketing strategy by implementing nationwide price reductions on menu items, resulting in an average per capita spending of around 85 yuan (RMB) in their stores.
On November 22nd, the Xiabéi Sand Ship Store in Nanjing opened for business. The store manager informed reporters from the Modern Express that Xiabéi has adjusted prices for nearly 40 products nationwide, with reductions ranging from 5% to 20%.
According to Jímù News, some customers who dined at the stores mentioned that the price reductions on products were noticeable and resulted in a significant decrease in their average spending.
Upon querying about the menu prices, reporters discovered that the newly opened Xiabéi Sand Ship Store in Nanjing had visibly lowered prices on signature dishes such as tender roasted lamb chops, Mongolian beef ribs, lamb skewers, millet noodle fish dish, and Xiabéi gluten noodles. Additionally, the nationally applicable promotion of “spend 50 save 50” was also available in the new store. According to Xiabéi’s reviews on the Meituan app, the average spending per customer has been reduced to around 85 yuan, positioning them at a moderate level in the Chinese dining sector.
The report states that in early October, Xiabéi had announced the nationwide reduction of over 30 products, with price reductions close to 20% at that time.
Regarding the on-site preparation, menu items like lamb skewers, chicken soup, and dumplings, which were previously promised to be adjusted at the stores, were all displayed. Store staff mentioned that most products at Xiabéi stores are now prepared on-site, and even a small portion of previously pre-cooked products have been transformed into on-site prepared items after adjustments.
According to Red Star Capital Bureau, a staff member at a Xiabéi store in Chengdu stated on the 23rd that 70% to 80% of the dishes at that store had been reduced in price, mentioning that the price reductions were a unified measure by the headquarters.
Regarding the average salary increase of 500 yuan for all Xiabéi staff, a Xiabéi representative mentioned that in September, a subsidy of 500 yuan was given to frontline employees. Starting from October, various subsidies were introduced at the stores, with each frontline staff receiving a total subsidy ranging from 300 to 800 yuan.
According to the Red Star Capital Bureau’s previous statistics, Xiabéi had closed nearly 10 stores in various locations since October. In response to rumors of the “Xiabéi store closure wave,” Xiabéi stated on November 11th that both opening and closing stores are normal operational activities in the catering industry, and they plan to open 8 new stores within the year, including the Xiabéi Sand Ship Store in Nanjing.
On November 23rd, topics tagged as “Xiabéi opening new stores” and “Xiabéi price reduction” trended on Weibo.
Author of the headline article and influential Weibo user “Black Reviewer VVV” mentioned, “Xiabéi’s price reduction is a desperate attempt at self-rescue. After rounds of restructuring, Xiabéi’s products have become stagnant in many malls, previously 10 yuan for a dish of leek dumplings, now only selling at 2 to 3 yuan per bag. I hope Xiabéi can survive and successfully transform.”
Author of “Overturning the Situation: The Winning Way for Ordinary People” and prominent Weibo user “All-Purpose Bear” stated, “It’s not easy for Xiabéi to significantly reduce prices. The catering industry is already low-profit, and this time, Lao Jia [Jiǎ Guólóng] has made a determined move. Recently, Xiabéi raised salaries for employees and then lowered prices, it feels like they are gearing up for the final battle.”
Commentator and essayist Qiáo Zhìféng remarked, “A 20% price reduction can be said to be Jiǎ Guólóng’s most sober decision recently. In the current consumption environment, cost-effectiveness is king.”
Local influencer and Weibo user “Yú Xiǎopān” expressed, “The news of layoffs and salary cuts has become commonplace, but Xiabéi, on the contrary, is raising salaries for employees. The old ginger is still hot; Xiabéi has been around for 37 years, surviving storms is not easy, I hope they continue to improve!”
However, some netizens raised skepticism, stating, “Wasn’t the profit margin only 5%? Is Xiabéi now selling products at a loss, isn’t that deceiving consumers?” “Mr. Jiǎ previously mentioned that the profit margin was only 5%. Now with price reductions of 5% to 20%, Mr. Jiǎ is truly benevolent, treating everyone to a meal at a loss.” “They should have reduced prices earlier. After the Xiabéi incident came to light, I spoke with one of their suppliers who confirmed that while Xiabéi’s prices are indeed high, the ordering prices for suppliers have been decreasing, indicating substantial profits.”
“Has the portion size of the dishes changed?” “Xiabéi is digging its own grave; while prices have been reduced, the portion sizes have been reduced even more.”
“Just dined there yesterday, ordered stir-fried beef, lamb neck soup, Mongolian cheese cake, and five tomato millet noodle fish, spent 200 yuan, averaging 100 yuan per person, the portion sizes were too small, my husband couldn’t get full. The day before, dining at a restaurant along the coast, the three of us spent 179 yuan and were satisfied. Overall, unless necessary, eating at Xiabéi is not worth it.”
Xiabéi Dining originated from Inner Mongolia and was founded in 1988 by Chairman Jiǎ Guólóng. Currently, they have nearly 400 branches across China. In mid-September of this year, Xiabéi experienced a “Precooked Food Controversy,” leading to a significant decline in business and the closure of 10 stores.