In the meantime, I have heard back from the investor relations team of JiuMaoJiu. Here are some highlights of their answers.
As of the end of 2023, Tai Er has 578 stores across 142 cities in China and 6 cities overseas. Moving forward, Tai Er’s expansion will focus on increasing density in higher-tier cities, entering lower-tier markets, and expanding internationally. We aim to open 1,000 Tai Er restaurants in mainland China by the end of 2027. At that point, we will evaluate the market and set new targets for our next phase of expansion. Initial overseas expansion will target Chinese communities, with plans to attract local customers to broaden our base and create more opportunities.
Given the current market environment, many chain restaurants are adopting a cautious approach to expansion. However, with low barriers to entry, new competitors continually emerge. We’re not afraid of competition; it drives us to improve. The key to success lies in maintaining stable operations. Supply chain management and IT systems are our core competitive advantages, and we’re investing heavily in these areas with significant results.
Currently, we’re facing intense price competition due to low mall foot traffic. Many restaurants are using discounts and promotions to compete, impacting our short-term gross profit margins. The macroeconomic environment also adds pressure, but we are managing costs effectively. We believe that unsustainable low-price competition will eventually push out weaker businesses, returning the market to more reasonable pricing levels. As a resilient chain, we are confident in enduring and thriving.
Supply chain management and IT systems remain crucial for our success. We are constructing three central kitchens in Guangzhou, Shanghai, and Chongqing. Guangzhou’s center is expected to be operational by the end of this year or early next year, with Shanghai and Chongqing following by the end of next year or early the following year. These kitchens will provide a solid foundation for our nationwide expansion. Bringing previously outsourced processing in-house will reduce costs and allow us to benefit from economies of scale.
Beyond cost savings, building our supply chain ensures food safety, consistent quality, and reduces dependency on restaurant staff. While the contribution to cost savings may be hard to quantify, we believe this direction is a competitive moat for chain restaurants. We will continue to invest in this strategy.
In response to current trends, we are also studying consumer habits to boost revenue through both dine-in and delivery channels. For dine-in, we are adjusting our product mix and prices to enhance value and variety, adding more SKUs while maintaining efficiency, and offering discounts and promotions. Region-specific adjustments are also in place.
For delivery, we launched a 40+ RMB Black Fish Sauerkraut Fish set meal for one person in early March. This caters to solo dining and has increased delivery revenue by 15% in pilot restaurants, prompting a nationwide rollout.
As big of a fan I am of their food, the stock is a hard pass for me.
In the meantime, I have heard back from the investor relations team of JiuMaoJiu. Here are some highlights of their answers.
As of the end of 2023, Tai Er has 578 stores across 142 cities in China and 6 cities overseas. Moving forward, Tai Er’s expansion will focus on increasing density in higher-tier cities, entering lower-tier markets, and expanding internationally. We aim to open 1,000 Tai Er restaurants in mainland China by the end of 2027. At that point, we will evaluate the market and set new targets for our next phase of expansion. Initial overseas expansion will target Chinese communities, with plans to attract local customers to broaden our base and create more opportunities.
Given the current market environment, many chain restaurants are adopting a cautious approach to expansion. However, with low barriers to entry, new competitors continually emerge. We’re not afraid of competition; it drives us to improve. The key to success lies in maintaining stable operations. Supply chain management and IT systems are our core competitive advantages, and we’re investing heavily in these areas with significant results.
Currently, we’re facing intense price competition due to low mall foot traffic. Many restaurants are using discounts and promotions to compete, impacting our short-term gross profit margins. The macroeconomic environment also adds pressure, but we are managing costs effectively. We believe that unsustainable low-price competition will eventually push out weaker businesses, returning the market to more reasonable pricing levels. As a resilient chain, we are confident in enduring and thriving.
Supply chain management and IT systems remain crucial for our success. We are constructing three central kitchens in Guangzhou, Shanghai, and Chongqing. Guangzhou’s center is expected to be operational by the end of this year or early next year, with Shanghai and Chongqing following by the end of next year or early the following year. These kitchens will provide a solid foundation for our nationwide expansion. Bringing previously outsourced processing in-house will reduce costs and allow us to benefit from economies of scale.
Beyond cost savings, building our supply chain ensures food safety, consistent quality, and reduces dependency on restaurant staff. While the contribution to cost savings may be hard to quantify, we believe this direction is a competitive moat for chain restaurants. We will continue to invest in this strategy.
In response to current trends, we are also studying consumer habits to boost revenue through both dine-in and delivery channels. For dine-in, we are adjusting our product mix and prices to enhance value and variety, adding more SKUs while maintaining efficiency, and offering discounts and promotions. Region-specific adjustments are also in place.
For delivery, we launched a 40+ RMB Black Fish Sauerkraut Fish set meal for one person in early March. This caters to solo dining and has increased delivery revenue by 15% in pilot restaurants, prompting a nationwide rollout.