Executive Summary: Key Takeaways – Xiabu Xiabu Group, the once-dominant affordable hot pot chain, is projected to report a net loss of 2.9 to 3.1 billion yuan for 2025, driving an urgent strategic shift towards buffet and self-service dining formats. – The company is deploying its buffet model across multiple brands, including semi-buffet tests at core Xiabu Xiabu outlets, premium畅吃 (all-you-can-eat) packages at its Coucou chain, and entirely new concepts like Xiabu Ranch and Xiabu Steak. – Industry-wide pressures, such as declining customer traffic and reduced average spending, are impacting even major players like Haidilao, highlighting the火锅 (hot pot) sector’s need for innovative business models to stimulate demand. – Historical案例 (case studies), notably the failed buffet transformation of former排队王 (queue king) Gelaoguan, underscore the significant operational hurdles in maintaining food quality and cost control within an all-you-can-eat framework. – Xiabu Xiabu’s潜在优势 (potential advantage) lies in its extensive, nearly 30-year供应链 (supply chain) network, but the success of its buffet model hinges on superior execution, brand differentiation, and achieving sustainable unit economics in a crowded market. The Buffet Gambit: A Multi-Front Assault on Declining Fortunes Faced with steep financial losses and eroding market share, Xiabu Xiabu Group is not placing a single bet but launching a diversified offensive centered on the buffet model. This strategy represents a fundamental rethinking of its service and pricing architecture in response to shifting consumer preferences for value and flexibility. Semi-Buffet Experiments at the Core Brand The initial foray began quietly in 2024, with select Xiabu Xiabu outlets in Shenyang, such as the杉杉奥莱店 (Sanshan Outlets store) and三台子万象汇店 (Santaizi Mixc store), transitioning to a semi-buffet format. For 39.9 yuan, customers gained access to unlimited servings of nearly 100 items, including base soups, condiments, drinks, and a selection of vegetables and processed meats, with premium proteins like beef and lamb available for an additional charge. This move effectively slashed the average per-person spending to 40-50 yuan, a stark contrast to its earlier pricing and a deliberate play to recapture its性价比 (cost-performance ratio) heritage. Customer reactions have been mixed, highlighting the challenge of balancing perceived value with product variety in this new buffet model. Premium Plays and New Ventures: Coucou, Xiabu Ranch, and Xiabu Steak The group’s strategy extends beyond the core brand. Its mid-to-high-end chain, Coucou, introduced a “甄选单点+欢乐畅吃” (premium a la carte + happy all-you-can-eat) dual model in 2025, with单人畅吃 (single-person buffet) tiers priced at 158, 198, and 258 yuan. This buffet model aims to stabilize revenue per customer while offering the allure of unlimited consumption. More radically, the group has launched entirely new sub-brands built around the buffet concept. Xiabu Ranch·自选小火锅 (Self-Serve Hot Pot) debuted in Shanghai with a base price of 29.82 yuan for unlimited soup base, dips, and over thirty vegetables, with other items priced in tiers (2.91, 5.91, 8.91 yuan). Meanwhile, Xiabu Steak, a “牛排单点+自助畅吃” (steak a la carte + buffet) concept, has opened in Beijing, targeting a空白市场 (gap in the market) for national steak buffet chains. Financial Desperation: The Engine Behind the Buffet Pivot The aggressive push into buffet formats is not born of ambition but necessity. Xiabu Xiabu’s financial performance has been in a prolonged downturn, forcing management to seek drastic remedies for ailing profitability. Mounting Losses and a Five-Year Downward Spiral The company’s 2025 financial forecast is bleak:预计营收38亿元，同比减少约20% (expected revenue of 3.8 billion yuan, a year-on-year decrease of approximately 20%), with an estimated net loss between 2.9 and 3.1 billion yuan. While this represents a减亏 (reduction in losses) of 22.2% to 27.2% compared to 2024’s 3.98 billion yuan loss, it underscores a persistent failure to achieve profitability. Zooming out, the picture is even more grim: over the past five years, Xiabu Xiabu has accumulated losses exceeding 15 billion yuan. This staggering figure has eroded investor confidence and placed immense pressure on Founder and Chairman He Guangqi (贺光启) to chart a new course. An Industry-Wide Squeeze: No One is Immune Xiabu Xiabu’s struggles are symptomatic of broader challenges in China’s casual dining sector. Even industry leader Haidilao reported a 3.7% decline in revenue and a 13.7% drop in net profit for the first half of 2025. The post-pandemic environment has been characterized by more conservative consumer spending, intense competition, and rising operational costs. This context makes the search for a viable buffet model, one that can reliably attract客流 (customer flow) and protect margins, a critical priority for many chains. Navigating the Buffet Minefield: Inherent Risks and Operational Challenges Embracing a buffet model is fraught with peril. It is far from a guaranteed ‘silver bullet’ and, if mismanaged, can accelerate a brand’s decline rather than halt it. The Cautionary Tale of Gelaoguan The most salient warning comes from Gelaoguan, a formerly popular hot pot brand. In a bid to counteract sliding sales, it转型 (transitioned) many of its restaurants to a buffet format. The move backfired spectacularly. To control costs within the fixed-price buffet model, ingredient quality reportedly suffered, standard operating procedures broke down, and口碑 (word-of-mouth) plummeted. The operational strain from high食材成本 (food cost) and complex现场管理 (on-site management) ultimately accelerated store closures instead of providing a lifeline. This case study is a stark reminder that a buffet model demands military-grade precision in supply chain logistics and portion control to prevent margins from evaporating. The Triple Pressure Cooker: Cost, Labor, and Quality Control A successful buffet model operates under constant tension. First,食材成本 (food cost) is the most volatile variable; unpredictable consumption patterns can lead to significant waste or shortages. Second,人力损耗 (labor attrition) often increases as staff must manage constant replenishment and maintain sprawling service areas. Third,品控管理 (quality control management) becomes exponentially harder when preparing large volumes of food for extended service periods. For Xiabu Xiabu, which has emphasized “高品质和平价化” (high quality and平价化) in its new strategy, maintaining its proclaimed standards within the buffet framework will be the ultimate test of its operational mettle. Market Timing and Competition: Has Xiabu Xiabu Missed the Bus? Beyond execution, the集团 (group) faces significant headwinds related to the timing of its entry and the saturation of the markets it is entering with its buffet model. A Crowded Self-Service Hot Pot Arena The赛道 (lane) Xiabu Ranch is entering is already packed. According to Qichacha data, there are over 20,000 active “小火锅” (small hot pot) enterprises in China, translating to an estimated 50,000 physical stores. Regional champions like围辣小火锅 (Weila Small Hot Pot) with over 2,000 stores and龍哥自助小火锅 (Longge Self-Service Hot Pot), which opened 300+ outlets in a year, have solidified their positions. For Xiabu Ranch, differentiating its buffet model from established players offering similar price points (around 50 yuan per person) will be an uphill battle, especially without strong prior brand recognition in this specific niche. The High-Stakes Game in Mid-Tier Dining Coucou’s move into the buffet space at a 150+ yuan price point is also risky. The market for mid-to-high-end火锅 (hot pot) is contracting as consumers prioritize value. While Coucou’s brand equity may initially draw curiosity, its buffet model must compete with a proliferation of high-quality, more affordable自助火锅 (buffet hot pot) options. The challenge is twofold: to avoid cannibalizing its own a la carte business while offering a compelling enough buffet experience to justify the premium. The subdued launch of its副牌 (sub-brand)锅韵火锅·茶憩 (Guoyun Hot Pot & Tea) in Shanghai, which garnered little market noise, suggests the difficulty of making a splash in this environment. The Path to Redemption: Supply Chain as a Foundation, But Not a Guarantee In its quest for a successful buffet turnaround, Xiabu Xiabu is leaning heavily on its most tangible asset: a vertically integrated supply chain built over decades. Chairman He Guangqi (贺光启) has pointed to “精细化运营与升级转型” (refined operations and upgrade transformation) as the industry’s new imperative. The company’s中央工厂 (central factory) and national distribution network could, in theory, provide a cost and quality advantage in sourcing the high volumes of ingredients required for a buffet model. This infrastructure is the bedrock upon which any profitable buffet operation must be built. Testing, Not Scaling: A Cautious Approach to New Formats The current strategy appears focused on cautious experimentation rather than rapid rollout. Concepts like Xiabu Steak and Xiabu Ranch are being tested in single or few locations, with stated plans for Xiabu Steak to reach 100 stores only over three years. This suggests a focus on first perfecting the单店盈利模型 (single-store profit model) before considering expansion. In an era where “跑马圈地” (land-grabbing expansion) is out of favor, this methodical approach to validating the buffet model is prudent. However, it also means that these new ventures are unlikely to contribute meaningfully to group financials in the short term, leaving the core brand’s performance as the primary concern. The Ultimate Challenge: Reclaiming the Value Proposition More than operational tweaks, Xiabu Xiabu’s fundamental issue is a eroded brand identity. It lost its mantle as the “平价小火锅之王” (king of affordable hot pot) through years of price increases and a muddled move upmarket. The current buffet model push is, at its heart, an attempt to rebuild a clear value proposition—offering abundance and predictability in pricing. Success will depend not just on logistics, but on marketing, customer experience, and whether the buffet format can truly reignite emotional connection with a customer base that has drifted away. Synthesis and Forward Outlook Xiabu Xiabu’s all-in bet on the buffet model is a high-risk, high-reward strategy born of financial distress. While the move aligns with the broader consumer trend towards value-for-money dining, the company enters a fiercely competitive field with notable laggard status. Its extensive supply chain is a solid foundation, but history and market reality suggest that this alone is insufficient. The specter of operational meltdowns, as seen with Gelaoguan, looms large. For investors and industry observers, the key metrics to watch will be same-store sales growth at converted buffet locations, customer retention rates, and, crucially, the trajectory of gross margins. The buffet model may provide a short-term客流 (traffic) boost, but the true test is whether it can be refined into a sustainably profitable engine. The coming quarters will reveal if this buffet gambit is the first step in a genuine turnaround or merely a frantic pivot in a prolonged decline. Stakeholders should closely monitor management’s execution on cost control and quality assurance, as these will be the definitive factors in determining if Xiabu Xiabu can finally翻身 (turn over a new leaf).
Buffet or Bust: Can Xiabu Xiabu’s All-You-Can-Eat Strategy Reverse a 3 Billion Yuan Loss?
