Jiumaojiu International Holdings reports there has been a sharp slump in customer spending at its leading Chinese seafood restaurant chain, Tai Er.
Same store average spending at the quick-service fish soup chain fell by 24.6 percent in the final three months of 2024 compared to the same period in 2023, according to data released by Jiumaojiu to investors. Jiumaojiu International Holdings operates 634 Tai Er locations, the vast majorit of which are self operated.
According to the data, for the three months ending 31 December 2024 average spending per customer at the restaurant was just CNY 72 (USD 9.87, EUR 9.51), with that averaged out between an average of CNY 66 (USD 9.05, EUR 8.71) per customer in mainland China and CNY 155 (USD 21.26, EUR 20.47) per customer in other regions.
Spending was also down by 18.5 percent at Jiu Mao Jiu, another major brand, and by 26.9 percent at Song Hot Pot compared to the same period in 2023.
The sharp decline in spending underlines the challenging operating environment facing China’s restaurant operators, particularly in the fiercely competitive mass market segment that Tai Er had earlier thrived in.
Jiumaojiu has over the past year reported struggling to hold onto customers, it told investors, with year-on-year declines in same store average daily sales of the major brands that it attributed “to the persistent impact of changes in [the] external environment.” The operator cut back on expansion plans for the chain in late 2024 after its profit dropped 71.5 percent in H1 2024 as it cut prices to try and address that issue.
“During the same period, the year-on-year decline in same store average daily sales of the major brands was mainly attributable to the persistent impact of changes in [the] external environment," the company said.
While it’s profit dropped in H1 2024, the firm grew its revenue by 6.4 percent to more than CNY 3 billion (USD 428 million, EUR 389 million).
It isn’t all bad news for the chain, however. It reported spending was slightly up at certain parts of its restaurant chains.
“During the fourth quarter of 2024, the average spending per customer of Tai Er (mainland China) and Song Hot Pot increased slightly compared to the third quarter of 2024, primarily due to adjustments in promotional policies,” it said.
Other seafood restaurant chains have also encountered difficult trading conditions in China. Singapore based upmarket chain Jumbo Seafood saw its mainland China stores struggle in 2024 due to weaker consumer sentiment.
