The aura of a "century-old store" is nothing more than taking advantage of the licensed monopoly operation in the planned economy era and the fact that state-run restaurants will never go out of business.
Wen|Wu Yu
Not long ago, Quanjude Group, which is famous for roast duck in China, disclosed its half-yearly results: in the first half of 2019, the total operating income of 758 million yuan, a year-on-year drop of 13.43%; the total profit of 0.46 billion yuan, a year-on-year drop of 58.16%, and the tragedy of the pounce caused public outcry.
This is not the first time Quanjude encountered a public opinion crisis. Years before, the performance of Quanjude all the way rout, the first half of the first quarter just burst out of the net profit decline of seventy percent of the news.
In the face of a comprehensive street situation, Quanjude calmly gave an explanation: catering stores to receive fewer people, operating income declined, while driving part of the upstream food industry income decreased, resulting in a decline in operating results.
But the diners who are tired of Quanjude have already come up with their own answer: Quanjude's virtues, it's strange not to pounce on the street.
Standing strong, but with a bad reputation
For tourists outside of Beijing, Quanjude may still be the first brand that comes to mind when you think of "Peking duck". But if you ask a friend who lives and works in Beijing, or even just a cab driver, you'll probably get a look of disdain:
"It's a rip-off for tourists, so why eat it?
Almost anyone who lives in Beijing can tell a story about visiting Quanjude on various occasions and having their eyes opened. It boils down to high prices, poor service, and regret.
And Quanjude is by no means the only famous long-established restaurant to attract bad reviews.
On May 24 this year, collector Ma Weidu took to the social media site to describe his experience at Chengdu's famed Dragon Hand Restaurant:
- The Dragon Hand restaurant on Chengdu's busiest stretch of Chunxi Road
These kinds of discredited restaurants are not uncommon in cities across China today.
They're a big hit with outsiders, they're a recommended destination in all kinds of local tourist literature, they're decorated in antique style, and they're labeled as "old Chinese", but their local reputation has collapsed, and they're in a very similar situation to Quanjude and Long Died Hands.
For example, Tianjin's Dogfu Baozi:
Yangzhou's Fu Chun Tea House:
Shanghai's Old Half-Sai Restaurant:
These old-fashioned restaurants, whose word-of-mouth has collapsed, have invariably become tourists' franchises, and even specialize in opening stores in tourist areas. Thanks to their nationwide fame, they can still have huge tourist traffic to support hit-and-miss spending even when local popularity dies.
In 2014, a brokerage firm calculated that the revenue of Beijing Quanjude's three stores with the highest traffic flow - Hepingmen Store, Qianmen Store, and Wangfujing Store - accounted for about 70% of the total revenue of the Quanjude Group, and the profit of the three old stores accounted for more than 90% of Quanjude's net profit. The location of these three stores is in the most popular tourist areas of Beijing.
In many people's opinion, the reason why the old stores are able to continue to rip off tourists regardless of reputation is that the tourist consumption scenario is a typical single game, and there is no need to consider repeat customers.
However, the single-play game, while partially explaining the poor attitude of the old firms, ignores the other side of the coin: China's restaurant industry is a high elimination rate, and the elimination rate for restaurants near tourist streets and tourist spots is even higher.
Very few of the Netflix restaurants in Beijing's Nanluoguxiang have been open for more than 2 years. And according to the Wuxi Catering Industry Association's 2018 statistics, the annual elimination rate of Wuxi's catering industry is more than 30%, while some well-known food streets are higher than the industry average of 40%.
The reason is not difficult to understand: in recent years, the high rent has become more and more the entire catering industry is facing a crisis, and the tourist neighborhoods of the front of the ground rent is very high, the tourist flow is divided into off-season and peak season, the combination of down, the operating difficulty is in fact much higher than the ordinary restaurant, many well-reputed veteran restaurants will not choose to get involved in the tourist food and drink at all.
But the old favorites, such as Quanjude and Longdou, are clearly the anomalies, and can be found in almost any tourist-heavy area, even airport stations.
- The Quanjude store at Beijing's South Railway Station and the Dragon Hand branch at Chongqing's Jiangbei Airport
How can the old firms survive the bad publicity and adopt a form of business that is clearly contrary to the laws of the market? The scale effect of chain operation can only explain a very small part of it. The more important reason is that they are old firms with Chinese characteristics, the favorites of privilege and policy.
'Old Firms' in Name Only
The so-called 'Chinese Old Firms' of today were first selected by the former Ministry of Domestic Trade in 199 3 . Later, in 2006 and 2010, the Ministry of Commerce issued new regulations, twice officially recognized. After that, each province and city also recognized their own old brands.
- After the successful selection, the Ministry of Commerce will issue a plaque to the "China Old Brand"
In 2006, the Ministry of Commerce issued the "China Old Brand Recognition Code (Trial)", which set "brand founded in 1956 (inclusive)" as one of the conditions for recognition.
The brand was founded before 1956, and there are business entities inherited to 2006, 2010, such brands, enterprises can be how the existence of it?
If you know the history, it is not difficult to think that the reason why these old brands can be inherited to this day, is not in the market competition to withstand the test of time, won the trust of consumers, but simply because in the history of the journey is more fortunate.
Take Beijing's restaurant industry as an example. The old Beiping originally had many restaurants, however, after 1949, due to the Three Anti-campaigns and socialist transformation, a large number of restaurants went out of business. After the public-private partnership, the snack vendors were reorganized into Nanlaishun, Longfusi and Xisisi three large snack bars, or merged into the major canteens, restaurants and taverns also followed a large number of withdrawals and mergers, and only a few remaining Quanjude, Fengzeyuan, Zuihua House and so on. To the 60s, all changed to state-run.
- According to the Japanese government statistics in 1943, there were 607 restaurants in the city, and 97 of them opened in the Qing Dynasty.
Beijing City Archives "Beijing restaurant industry old historical materials a 1943 pseudo-Beijing Social Bureau questionnaire" (partial)
In 1966, the tide of destruction of the Four Olds, the catering industry suffered a heavy setback, and many stores closed down. But it was lucky enough to make it this far, because it finally renewed its "corporate legacy" until the Great Depression of the decade, and most likely waited until the 1980s to rectify the situation, regain organizational ties, restore the name, and reopen the business. The company's name is still the same as its name, but it's not the same as the company's name.
Many more stores unfortunately closed down before then, or were merged with other restaurants in the public-private partnership and later reforms, which meant that the business legacy was dead in the water, completely dead.
- They also have a slight chance of being famous enough to attract the attention of leaders. For example, Beijing in the late Qing Dynasty and early Republic of China, "eight buildings" in the Dongxing Lou, Xinfeng Lou, as early as the 1940s has been closed, but in the 1980s by the districts catering company to force the "restoration", but also became the so-called Chinese old < / strong>
Therefore, who died, who lives, who can inheritance to date, who can be assessed on the old, the ultimate rely on the struggle is not a commercial tenant, is not a market of the great waves of sand, but the history of the journey, the organization of the old, and the old, and the old, is not the old.
They are the most important of all, but they are the most important of all.
The so-called "century-old store" halo of these old firms is nothing more than taking advantage of the monopoly of licensed operation in the era of planned economy, and the state-run restaurants never close.
Not only can it not be used to prove the goodwill of today, but it also does not reflect the historical facts.
Such as the old Beiping restaurant to service attentive, cost-effective known, because the capital moved out of the city after the disintegration of the consumer system, the catering industry, supply exceeds demand (see previous article: why Beijing snacks are difficult to eat | Elephant Guild), in the market competition, only to optimize the service, only to be in the writing of many writers to leave a lot of beautiful, which is the opposite of today's Beijing old.
In the old days, all the restaurants were family-owned private, craft by the family, master-disciple relationship inheritance, business depends on the old patron care, and changed to the state-run for many years, the remaining only state-run cafeteria habit.
Only in one respect, today's Chinese old firms have been able to retain the business habits of the past, that is, they do not have to bear high rents.
During the Republican era, except for a few areas such as the Shanghai Concession, land prices were generally low, so many restaurant stores were owned properties. Today, the vast majority of restaurant operators do not have the ability to dish out storefronts, and high land rents have become one of their biggest operating pressures.
But the oldest of the old is clearly not such a worry. Almost all of today's old shops were restored in the 1980s by state-owned catering companies at all levels, and they relied on government allocations to realize the property rights of the stores as early as the planned economy era.
Beijing Quanjude three stores with the highest traffic, Hepingmen store, Qianmen store, Wangfujing store, all Quanjude own property rights, large-scale, today's value can be tens of tens of billions of dollars, far more than the entire group's total business.
This other private catering enterprises simply can not imagine the privilege, it is the bottom of the hundreds of work not die.
Policy-funded zombies
The privileges enjoyed by the old firms are not limited to the stores themselves.
Today, most of the old firms, although most of them have undergone the so-called restructuring, most of them still have a state-owned shareholding structure.
Most of the old restaurants in Beijing belong to three group companies: Quanjude, Cheap Square, and Huatian Catering. The largest shareholder of Quanjude is Beijing Shouyou Group (state-owned), the absolute controller of Cheap Square is Chongyuan Investment and Management Company under Chongwen District State-owned Assets Administration, and Huatian Diet is fully owned by Beijing Financial Street Capital Operation Center, which is directly controlled by Xicheng District State-owned Assets Supervision and Administration Commission.
- Quanjude Group has Quanjude, Imitation Cuisine Restaurant, Fengzeyuan, Sichuan Restaurant and other old; Cheap Place has Cheap Place, all one place, Tianxingju, Jinfang and other 12 old, Huatian Group has Hongbinlou, barbecue season, barbecue Wan, casserole house, Emei Restaurant, Liuquanju, Xilaishun, Yuhuatai, Guiguo Temple snacks and other old
As a result of this, the company has become the first in the world to be awarded the title of the "Best Chinese Restaurant in China. >
As state-owned enterprises, they are financing investment, against risk, revenue pressure, etc., than ordinary private enterprises have a natural huge advantage, the face of the check fire check sanitation and other gray rent-seeking, much stronger backbone.
Of course, there are part of the old is the restructuring of state-owned enterprises, state-owned exit model. For example, Chengdu Catering Company of Sichuan Province, which owns 23 old brands such as Dragon Hand, Lai Tangyuan, and Husband and Wife Lung Slices, was converted into a fully-owned joint-stock cooperative enterprise in 2004.
But they are still very different from ordinary private enterprises.
Since 2006, when the Ministry of Commerce recognized China's long-established brands, the revival of traditional culture has gradually become a national policy, and support for the growth of long-established enterprises has become a political correctness from the central government to the local government, with many subsidies and policies.
Just take the "Opinions on the Protection and Promotion of the Development of Old Firms" issued by the Ministry of Commerce, the Development and Reform Commission and other ministries and commissions in 2008 as an example, it is not difficult to see how powerful the government's support policies are:
In 2017, the Ministry of Commerce and other 16 departments "on the promotion of the reform of old firms and innovation and development of the guiding opinions" reiterated these policies. Based on these policies, various forms of subsidies and support have been given to local old firms around the world.
For example, Wuhan, in 2011, announced that the old catering to open a branch, according to the actual investment in the project capital of 30% of the financial subsidies, a single project up to 1 million yuan. 2015, Wuxi announced that the year of the new directly operated chain stores of the old enterprises, you can get 30% of the rent of the financial subsidies for three consecutive years.
More commonly, it is in the tourist neighborhoods, airport stations for the old firms to open new stores, a substantial reduction in rent. Chengdu's various old firms were thus able to occupy Jinli and Kuannarrow Alley, and in 2018, Suzhou even cleaned up all the stores on Guanqian Street and provided large subsidies for old firms that could not afford the rent.
Such a large subsidy, naturally, can make the old firms show a thriving and crowded scene, even if the food is more muddled, service is more rough, there is no danger of closure. And the related assessment requirements of governments at all levels have been perfectly met.
However, the price is to cut off the normal market feedback path, so that the management problems, should be educated by the market of the old, such as zombies in brocade clothing in general, living in the local public and consumption of one time to regret the tourists in the spurning.
Gu Jiuru, the head chef at Quanjude, once lamented to the media that the rigid internal personnel system, where elite technicians are paid far less than management, has led to a serious brain drain and made it extremely difficult to recruit chefs. The repeated outrage over the attitude of the waiters often signaled a full-scale festering of its internal personnel management. These problems have been exposed for more than a decade, and so far no improvement has been seen.
Ma Mingyang, the head of Xi'an's "Old Sun Family" restaurant, another old tourist favorite, complained that he suffered from the state-run system: endless meetings made it impossible to keep up with normal operations, and even buying a green onion had to be reported up and down the chain of command.
According to the 2018 China Dining Report released by Meituan, the average lifespan of a restaurant that closed down in the last two years was 508 days, a figure that once again demonstrates the fierce and brutal market competition in the contemporary restaurant industry, as well as the absurdity of relying on policies to force the revitalization of old businesses.
If we want to promote the healthy development of the restaurant industry, it is obviously more meaningful to create a better environment for contemporary enterprises that are recognized by the market, so that they can equally enjoy the convenience of borrowing and financing, than to subsidize the old firms that have lost their reputation.
If it's about passing on food culture, the fact that the state-run Quanjude and Cheap Place have long been surpassed in reputation by the private Da Dong and Four Seasons Minfu shows that the excellent private restaurants that have fought their way through the marketplace are far more capable of passing on their heritage than these old favorites that rely on privilege and policy to continue their lives.
It is the sadness of traditional culture to let the word-of-mouth, widely disliked, and against the laws of the market old, continue to rely on privileges and policies to maintain.