Xiabu Xiabu Closed 229 Restaurants in 2021 and Shifted Expansion Toward East, South China and Overseas

This is an English adaptation of a FoodBud historical article originally published on March 30, 2022.

According to Xiabu Xiabu Group's 2021 annual report, the company generated revenue of RMB 6.15 billion in 2021, up 12.7% year on year, and recorded a net loss of RMB 283 million.

Xiabu Xiabu Group's business was mainly driven by two brands: Xiabu Xiabu and Coucou. Xiabu Xiabu contributed RMB 3.5 billion in revenue, accounting for 57.3% of group revenue. Coucou Hotpot contributed RMB 2.35 billion, accounting for 39.3%.

Seasoning products generated RMB 126 million in revenue in 2021, representing 2.1% of group revenue.

Cost Structure

In 2021, raw material costs accounted for 38.1% of revenue, employee costs for 29.8%, and property rent and related expenses for 4.8%.

Store Network

During 2021, the group opened 52 Xiabu Xiabu restaurants and 43 Coucou restaurants. It closed 229 Xiabu Xiabu restaurants, mainly because most of those locations were loss-making.

By the end of 2021, Xiabu Xiabu operated 841 Xiabu Xiabu restaurants across 132 cities in China. Coucou operated 183 restaurants across 42 cities, three municipalities directly under the central government, Beijing, Tianjin and Shanghai, and Hong Kong, China.

Xiabu Xiabu's restaurant base in 2021 remained concentrated in China's first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, which accounted for 38.5% of its stores.

Brand-Level Operating Metrics

Xiabu Xiabu's average spend per guest was RMB 62.5 in 2021, with a table turnover rate of 2.3. Same-store sales revenue fell 8.3% year on year.

For Coucou Hotpot, 54.1% of stores in 2021 were in second-tier cities, while 39.3% were in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen.

Coucou's average spend per guest was RMB 140.6 in 2021, with a table turnover rate of 2.5. In first-tier cities, its table turnover rate increased from 2.6 to 2.8.

Coucou's same-store sales declined 0.9% year on year in 2021. Its Hong Kong, China restaurants stood out, with sales up 21.4% year on year.

Expansion Strategy

In 2022, Xiabu Xiabu Group planned to adjust Xiabu Xiabu's expansion strategy. After a prior focus on northern China, which the company described as an operational layout failure, the brand planned to concentrate on East China and South China. Over the following three years, both regions were expected to be key expansion areas.

Coucou planned to build on its brand momentum in first-tier cities while continuing to expand into second- and third-tier cities. In addition, Coucou opened its first Singapore restaurant in early 2022 and planned to continue entering international markets.

Note: Forward-looking expansion plans are historical statements from the 2022 article.