A barbecue restaurant was opened for 300,000 yuan, and sold for 180,000 yuan in less than a month, but Zibo is not cold

This article starts from the development history of Zibo barbecue restaurants and analyzes the rise and fall of Zibo tourism. The article analyzes the reasons for the surge in the number of barbecue restaurants and the cruelty of price wars. At the end of the article, it is proposed that Zibo's popularity should be maintained in a long-term way and cannot be supported by temporary popularity. This article is suitable for readers who want to understand the development cycle of the tourism industry.

The rising popularity of Zibo was like a "high fever" to Yao Sheng. In June, he invested a total of 300,000 yuan to rent a shop, purchase equipment, hire employees, and open a barbecue restaurant.

In early July, Yao Sheng put the store up for sale at 180,000 yuan. In less than a month, the loss was expected to be 120,000 yuan. "There are four other stores near my store, all newly opened in June, and three of them have been transferred now." Yao Sheng added that if he continued to operate at a loss, but could outlast his competitors, life would be better.

The problem is, no one has money anymore.

From March to June, it was not only the enthusiastic tourists who came to Zibo to enjoy the barbecue, but also the merchants who heard the news. In just two or three months, more than 100 barbecue restaurants opened around the new landmark of Zibo, "Ba Da Ju". According to the observation of barbecue owner Jin Yang, 70% of them were new stores, "and many of them have been transferred now."

A boss who sells hotel supplies wholesale told us that in May, a large number of barbecue restaurant owners ordered disposable bowls and chopsticks from him. However, not long after, they came to return the goods in droves, saying that "the store could no longer operate."

The Qichacha platform shows that from early March to early July, more than 800 barbecue-related companies were added in Zibo City. Among them, 385 were added in April. This month alone is equivalent to the number of new barbecue companies in Zibo in 2022.

In May, the number of new companies began to decline, with only 90. In June, only 15 barbecue restaurants were opened - at this time, the number of deregistered companies began to increase, and the industry entered a period of elimination.

But most of the stores that have closed down are new stores. Jin Yang took over a barbecue restaurant that had been open for several years, and most of the customers were familiar with the restaurant. Although the current turnover has been halved compared to the average daily turnover of 40,000 to 50,000 yuan in the busiest period (April and May), it is still enough to survive with a turnover of more than 10,000 yuan a day. "The business of new stores depends entirely on tourists, but tourists account for only 30% of our store at most."

All the excitement started with traffic and also ended with traffic. This year's Dragon Boat Festival holiday was the last feast of Zibo barbecue, and since then, the city has begun to "cool down".

During the Dragon Boat Festival, Zibo Station is expected to send 180,000 passengers, an average of 36,000 passengers per day, which is a decrease compared to the average of 48,000 passengers per day during the Labor Day holiday.

Data from Juliang Suansu shows that the search index for the keyword "Zibo barbecue" reached a small peak of 2.4767 million on April 9, and reached a peak of 11.0579 million at the end of April. By the end of June, the search index for the keyword "Zibo barbecue" had fallen to 109,100.

However, compared with the same period in 2019, Zibo is still much busier after the temperature has dropped. According to the staff of the Eight Bureau Cultural Market, the flow of people has increased by more than ten times compared with before Zibo received attention.

This city has gone through a complete cycle of popularity, from being mediocre to becoming very popular, then gradually cooling down and entering a normal state of bustle. It is the tourists from all over the world who bring this bustle. But tourists come and go in a hurry, and in the end, it is the people who work and live in this city who experience the bustle of Zibo for a longer period of time and truly.

Especially the "Zibo BBQ" at the center of the topic, and the barbecue owners behind it. They have experienced what may be the busiest and highest-income period in their lives. In a northern industrial city, they participated in the most brutal business elimination competition that would have only taken place in Beijing, Shanghai, Guangzhou and Shenzhen.

01 Zibo barbecue also started a "price war"

"8 dishes for 19.9 yuan, 49.9 yuan for a meal for 4 people, these kinds of group buying packages are everywhere nowadays." Yao Sheng joked that the current "price war" in Zibo barbecue allows "freeloaders" to eat different food for a month without repeating themselves.

In Zibo, if you open the local life platform, you will find that many barbecue restaurants have launched a two-person meal for 19.9 yuan. Meals for 4-5 people are often less than 100 yuan, which makes people worry whether there is any profit margin at such prices.

There are no winners in a price war

When did the price war in Zibo barbecue begin, and how intense was it? The WeChat Moments of a barbecue owner we contacted gave some answers. The owner's WeChat Moments showed that in April this year, his store had a trial operation with 12% off on all items. The business in the store was very lively, and he even invited an Internet celebrity with millions of fans to check in.

In May, the number of tourists in Zibo was at its peak. The boss’ circle of friends only had some routine publicity, without any trace of promotion. It can be judged that the store’s customer flow should have been good at that time and the business trend was also optimistic.

In June, intensive promotions began. The original price of 38 yuan for hot pot tripe was reduced to 9.9 yuan per pot. The original price of 26 yuan for garlic scallops was also discounted to 9.9 yuan per dozen. In July, the price of hot pot tripe was reduced to 0.1 yuan per pot, which was rounded off to free, but at this time, the boss no longer had the enthusiasm to shout.

Since the store opened for trial operation, he had posted a message on WeChat Moments every day to promote the barbecue restaurant, and never missed one until July 5. After that day, he never posted any information related to the barbecue restaurant. Later, we found the transfer information of this barbecue restaurant in the store transfer list of Zibo 58.com, which was buried among hundreds of barbecue restaurant transfer posts. On July 17 alone, there were more than 30 transfer information added in Zibo on 58.com, which could not be put in one list.

The boss’s circle of friends has been flooded with promotional information since June

The price war has left hundreds of new barbecue restaurants in Zibo with no money to make. At the same time, they also have to bear the increasingly "cooling" customer flow.

"Before closing the store, I could set up seven or eight tables a day, with a turnover of about 1,000 yuan. After deducting the cost of ingredients, employee salaries, and water and electricity bills, I was definitely losing money." Yao Sheng added that a barbecue chef's monthly salary is 12,000 yuan, which means the daily cost is 400 yuan. "When I was recruiting workers, barbecue in Zibo was very popular, and wages also went through a round of increases."

It's not just wages. After Zibo barbecue became popular, the government controlled the prices of retail terminals, but there was a round of price increases for upstream ingredients. According to merchants, the increase was about 20%, so the gross profit margin was reduced. Of course, now that barbecue has cooled down, the price of ingredients has also recovered.

If he can keep the business going, Yao Sheng has a chance to stand out from the four or five barbecue restaurants nearby. His shop is located downstairs of a high-end residential area, close to the Wanda business district, and has considerable consumer power. But he no longer has the cash flow to support the operation of the shop. "I invested a total of 300,000 yuan, of which the rent is more than 10,000 yuan a month. This is a new shop that has just been delivered, and I rent it for six months and get six months free. Then I spent nearly 200,000 yuan on equipment and decoration."

300,000 yuan was all the cash available to Yao Sheng for starting his business. He invested it all in the start-up of the store, ignoring the need for cash flow in subsequent operations. He also mistakenly believed that Zibo would always have so many tourists and that there would always be endless queues in front of every barbecue restaurant.

But the fact is that nowadays, only those internet-famous barbecue restaurants still have long customer lines in front of their doors, such as the most famous "Shepherd Village". Some barbecue restaurants opened on the edge of the main urban area are even deserted, with only one or two tables of people in the large yard.

"The menu design was not distinctive, and there was no money for online marketing. We relied entirely on natural customer flow." Yao Sheng reflected that he underestimated the difficulty of running a restaurant, and the profits were minted pennies. "At the beginning, I had no experience, and the equipment I purchased was all brand new, which was actually unnecessary."

Yao Sheng's experience confirms the joke about opening a shop online - there are only two happy days in opening a shop, the first is the opening day, and the second is the day of successful transfer. Now, he has listed the shop on a local forum with a package price of 180,000 yuan. "The price is negotiable, I just want to get rid of it, and I will never run a restaurant again."

02 Zibo’s “traffic gamble”?

In Jin Yang's view, the huge traffic has expanded the scale of catering in Zibo and made the dimensions of competition more diverse, which has invisibly raised the threshold for local catering.

"Now, 20% of my store's monthly turnover has to be reinvested in marketing. Products are just the foundation. You have to understand how to play Douyin, how to do Xiaohongshu, and how to expand into channels such as Meituan and Gaode."

Jin Yang explained that the proportion of marketing expenses in the past was about 10%. The current increase in marketing expenses is closely related to the influx of young tourists in Zibo in recent months. Channels and marketing are often used to attract young people. "You have to invest this money because your peers are all investing. If you don't, you will fall behind."

Because marketing is widely valued, some bad false marketing phenomena have even appeared in Zibo, such as a group of so-called 30-year-old stores. We asked Jin Yang for confirmation, and he said, "Muyangcun was founded when I was in elementary school. It is an old brand with a long history. Apart from this, I can't think of any other 30-year-old stores in Zibo."

On the other hand, Jin Yang believes that the "elimination round" that Zibo barbecue is currently experiencing is a normal process under the influence of market laws. "For example, this market can accommodate 100 stores, and now 500 stores have opened, so 400 of them will definitely go bankrupt. In addition, barbecue business attaches great importance to old customers. New stores without familiar customers will definitely be eliminated first."

The catering market has never lacked smart merchants, but in this era of increasingly smooth information flow, being smart may not necessarily bring enough time difference. When merchants rush into the market, competition quickly becomes full and saturated, and both sides are stuck in a quagmire.

"In fact, in May, many people hesitated. Everyone knew that the passenger flow would definitely decline, but they were still hoping for the best. Summer vacation was coming soon, followed by the National Day holiday, so they were optimistic about the future. They were afraid that if they didn't act now, they would miss the chance to enter the market later."

One boss who entered the market during the store opening boom in May explained that on the one hand, he had an optimistic expectation of Zibo’s customer flow, and on the other hand, he underestimated the madness of his peers entering the market.

"While your shop is still under renovation, several barbecue restaurants open up next door and next door to yours. This feeling is really hard to describe. You regret it, but there's no way to turn back," said Yao Sheng.

But risks and benefits are always proportional. What attracts people to the Zibo barbecue business is the "hot fire" in April and May. According to a merchant, the normal payback period for a barbecue restaurant in Zibo is about one year, and for a good restaurant, it may take 8-10 months. But in the hot market in April and May this year, it is not unrealistic to pay back in two or three months. The huge return space makes the scale of newly opened stores and the severity of competition far exceed the expectations of entrants.

The barbecue industry in Zibo over the past few months has been a bit like a "gambling game". Merchants have more or less had a crazy feeling of "making a quick buck and then dying".

For example, before opening this store, Yao Sheng was a local architectural designer in Zibo. He worked in the home decoration and building materials industries and should not have entered the catering industry. However, it was competitors outside the industry like Yao Sheng that made the operation of new stores, including Yao Sheng himself, increasingly difficult.

However, Jin Yang believes that the oversupply is not entirely due to the misjudgment of merchants. "Before, tourists had to queue up in many restaurants to eat barbecue. In order to meet the needs of tourists, the government has accelerated the review efficiency of new restaurant qualifications, which can be regarded as a 'green channel', but this has also led to new restaurants opening faster and faster and in greater numbers."

03 Whether Zibo is cool or not, barbecue has no say

Just like the unprecedented prosperity in Zibo in April and May, it will never become the norm. The barbecue restaurants that have closed down now cannot represent the real popularity of Zibo at the moment. An industry or a period of time is, after all, just a slice of a city's popularity.

In early July, the topic of "Zibo barbecue has cooled down" was once very popular, but to look at Zibo's popularity more objectively, we should extend the period and look at it in years.

A local Zibo person once commented on a post about "Zibo BBQ is out of fashion": Originally, there were 100 outsiders coming to the city every day, but because of the popularity, 10,000 people came. Now, the popularity has faded and now there are only 1,000 people coming every day. For us locals, how can it be out of fashion? The flow of people has increased tenfold, so it's obviously getting better.

Scale expansion and survival of the fittest are twin brothers of the market, the former is the result, the latter is the process. "With so many barbecue restaurants opening up all of a sudden, it is normal for some to close down." Erxi, who once bought local food in Zibo for netizens across the country, told us that now is the summer vacation, the popularity of the Eight Bureau is still very high, and the government has also expanded the "calligraphy and painting street" and "traditional Chinese medicine street" and other special products and services.

"There are still many cars with out-of-town license plates on the road, and the Badaju is still crowded. I have never walked out of the Badaju empty-handed. Some famous calligraphers and painters only charge a few dozen yuan for painting a fan. Some people will ask calligraphers to write marriage certificates when they get married, or customize portraits for their cats and dogs."

Gao Niannian, who just came back from a trip to Zibo, told us that there is still a long queue for barbecue at the Shepherd's Village, and that merchants and citizens in Zibo are still enthusiastic. She doesn't care about the online discussions about whether Zibo is declining or not. For her, this city is a good place for travel experience, and that's enough.

We have also mentioned similar views in the article "24-hour raid on Zibo, the rise of a small northern city". Barbecue and local Internet-famous snacks are just labels and topics on the surface of Zibo's popularity. The customs and habits of the old northern industrial city, or more intuitively, "hospitality and enthusiasm", these emotional factors may be the main reason for the continued fermentation of Zibo's popularity.

Catering is one aspect, and accommodation is another. We interviewed three local hotels in Zibo, including Hilton Garden Inn, Hampton by Hilton and All Seasons, covering both mid-range and high-end categories. The three hotels were almost fully booked on July 15 and 16 (weekend), and the subsequent occupancy rate was also high.

"From April to now, the rooms have hardly been empty. It's summer vacation now, and there are still many tourists from other places. The price has not increased. The government has control over us." A hotel receptionist told us. However, we also observed that the prices of some mid- and low-end hotels seem to be more "free" to adjust according to market demand.

Red Star News also interviewed the Jinan Railway Bureau and learned that the Zibo special train that had been running previously had stopped running at the end of May, but at the same time, the passenger flow from Jinan to Zibo did not show a significant decline. Due to the arrival of summer vacation, there are still many trains running between the two places.

In this era, everyone is considered to have 15 minutes of fame. The popularity of Litang, Caoxian, and Zibo seems to prove that every city will also receive at least one phenomenal exposure in the era of traffic.

For Zibo, this exposure has already happened, and Zibo has also contributed textbook-level traffic operation practices. The surging traffic cannot be replicated, and the city has also completed its transformation. The next thing to consider is how to make steady flow.

Author: Shen Songnan

Source: WeChat official account: "E-commerce Online (ID: dianshangmj)"