Summary of the Key Points
Juewei Duck Neck, once the chain with the largest number of stores among the three major domestic marinated meat businesses and the first to reach the “10,000-store club,” has suddenly hit a major setback: in just three years, it has closed more than 6,600 stores, averaging 7 closures per day. Its total number of stores has plummeted from over 15,000 at the end of 2023 to less than 9,300, dropping out of the 10,000-store club. Not only has the number of stores significantly decreased, but its revenue also fell by more than 10% year-on-year in the first half of this year, and its net profit nearly quartered. It is now unable to even cover its costs from sales, with its operating cash flow turning from positive to negative. This is not just Juewei’s problem; the performance of the other two giants, Zhou Heiya and Huang Shanghuang, has also declined, and the entire marinated meat chain industry has collectively entered a difficult period with declining sales.
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Detailed Analysis
1. A Simple Explanation of Juewei’s Current Situation
Many people don’t realize the severity of the situation: closing 6,600 stores in three years means that, over the past 1,000 days, about 7 Juewei stores have disappeared from the streets every day. If you walk through the shopping districts twice a week or use the subway twice, you’re likely to encounter a Juewei store that’s removing its merchandise or posting a notice of sale. In the past, having over 10,000 stores was considered the pinnacle of success for a chain brand, and Juewei was the only one in the marinated meat industry to achieve this. Now it has fallen out of this elite group, losing nearly half of its former market share. The problem is more serious than just a slight decrease in profits: its profits have dropped by 23% this year, meaning that what it used to earn from selling 100 yuan is now only about 15 yuan. The money from sales is not even enough to cover costs such as purchasing ingredients, paying staff, and rent, forcing the company to subsidize its operations.
2. Why Have Consumers Suddenly Stopped Buying Duck Neck?
It’s not that people have less money to spend; rather, their choices have expanded, and the cost-effectiveness of Juewei and other similar chains has diminished:
- Prices have risen excessively: A few years ago, 20 yuan could buy a large bag of duck neck and lotus root slices. Now, a few small pieces of duck neck and some edamame can cost thirty to forty yuan, which is more expensive than buying two pounds of fresh duck meat to prepare at home.
- Competitive Alternatives: Street vendors in the market offer freshly prepared marinated meat that is hotter and cheaper by a third. Online platforms also offer various niche marinated meat brands for 9 yuan with free shipping. Additionally, local shops specializing in spicy marinated beef and other dishes offer fresher flavors, making it unnecessary for people to go to Juewei.
- Health Concerns: People are increasingly concerned about their diet, and the high-salt and spicy nature of marinated meat is no longer a popular snack option. There are many healthier alternatives such as sugar-free snacks and freeze-dried fruits.
3. Juewei’s Own Mistakes
Juewei’s past success in expanding quickly was due to a model that relied on franchising to generate quick profits. The low entry barrier for franchising—just paying a few tens of thousands of yuan and getting semi-finished products from the headquarters—led to the opening of many stores. However, this approach had serious consequences: many franchisees lacked the skills to operate properly, and the poor quality of the food and unsuitable locations damaged the brand’s reputation. The company also pressured franchisees to buy expensive frozen products, leaving them with little profit. As a result, many franchisees closed their stores, accelerating Juewei’s decline.
4. The Whole Industry Is Suffering
The success of the marinated meat industry was largely based on two factors: subsidies for delivery services and excessive capital investment. These factors no longer exist. Delivery platforms are taking larger commissions, and customers are less willing to add marinated meat to their orders. Investors are no longer interested in such low-tech, labor-intensive businesses. The three giants are now competing with similar products and prices, leading to a vicious cycle where no one is making money.
5. A Warning for Everyone
Don’t consider joining a marinated meat franchise right now. The idea that you can recoup your investment in half a year is unrealistic. Consumer preferences have shifted, and opening a small store in a competitive market is unlikely to be profitable. The industry needs to focus on improving product quality, reducing prices, or expanding into new markets. Otherwise, the trend of store closures will continue.