Summary of Key Points
In 2026, the self-service barbecue industry has seen a wave of closures, with many chain brands (such as Xiao Zhu Cha Li and Ba He Tian) and local businesses shutting down one after another. The main reasons are soaring costs (especially for beef) + excessive industry expansion leading to increased competition. The profit model that relied on low prices and unlimited quantities in the past has become ineffective due to its weak risk resistance. The industry is now entering a new phase: leading brands are competing for control over their supply chains, while smaller businesses are experimenting with new models. In the future, the focus will not be on low prices, but on the ability to withstand cost fluctuations and retain customers.
1. Rising Beef Prices as the “Last Straw”
Beef is a key ingredient in self-service barbecue, and its price directly affects overall costs. In 2026, beef prices have risen sharply:
- Sharp Increase in Purchase Prices: Wu Xi’s owner, A Wei, reported that the purchase price of beef went from 27 yuan per jin in 2024 to 38-45 yuan per jin, resulting in an additional daily expense of over 1,500 yuan if using 130 jins.
- Tight Import Quotas: Australia’s beef import quotas were exhausted in June, and now there is a 55% tariff on imported Australian beef; Brazil, the largest supplier of beef to China, also has nearly depleted quotas (80% used in July), with further price increases expected for the second half of the year.
- Small Owners Struggling: Wu Han’s owner, Xiao Pang Ding, is losing 20,000 yuan per month due to the high cost of fresh beef. Liu Dong Dong from Tang Shan wanted to close his business half a year ago because of the rapid increase in costs.
Beef accounts for a large portion of expenses, and its price increases significantly reduce the overall profitability of the businesses.
2. Too Many Stores, Distracted Customers, and Losing Money in Price Wars
In the past few years, self-service barbecue stores have flourished, leading to an oversupply:
- Dramatic Increase in Stores: There were 205,000 barbecue stores nationwide in 2025, a year-on-year increase of 34.4%, with many opening in the same areas.
- Distributed Customer Flow: Tian Jin’s owner, Fang Jun, opened five self-service barbecue stores last year, but his daily turnover dropped from 6,000 yuan to 760 yuan in July, resulting in a loss of 2,000 yuan each day due to insufficient customer attendance.
- Price War Cycle: To attract customers, more brands have resorted to selling at low prices (60-80 yuan per serving), only to lose more money as costs rise and prices remain unchanged, leading to greater losses with each additional customer.
3. The Flawful Low-Price Model
The traditional profit model for self-service barbecue is low average transaction price × high customer flow × low costs = profit, but it has a fatal flaw:
- Thin Gross Profit Margin: The gross margin is typically around 50%, but after covering rent, labor, utilities, and food waste, the net profit per customer may be only a few yuan.
- Dependence on Low Beef Prices: The model relies on cheap beef; once prices rise, the entire structure collapses—since average transaction prices cannot increase (otherwise, customers will leave), leaving businesses to bear the losses.
- High Turnover Requirements: High turnover rates (multiple customer sessions per table per day) are needed to generate profit, but with dispersed customer flow, these rates become unattainable, leading to further losses.
4. Leading Brands Focus on Supply Chains, Small Businesses Experiment with New Models
In response to the crisis, different players are adopting strategies:
- Leading Brands Control Supply Chains: Gurute has built a 20,000-square-meter processing and warehousing park; Luan Lang Pao Pao directly imports beef from Brazil and Argentina, signing “fixed-price agreements” to hedge against price fluctuations.
- Small Businesses Experiment with New Models: For example, using conveyor belts for serving food (similar to sushi) and smaller portion sizes to reduce waste, which can save some costs. However, whether these measures will be effective in the face of rising beef prices remains uncertain.
- Survival Depends on Efficiency: The key is to control material costs and improve operational efficiency (e.g., reducing waste and increasing turnover rates).
5. The Future Focuses on Beyond Low Prices
The era of “low-price competition” for self-service barbecue is over. The future will be about:
1. Supply Chain Control: The ability to obtain cheap and stable beef supplies.
2. Efficient Operations: Reducing waste and increasing turnover rates.
3. Differentiated Experiences: Simply offering unlimited quantities is no longer enough; unique features (such as better quality or distinctive flavors) are needed to retain customers.
In short, the competition will shift from who offers the lowest price to who can withstand costs and provide a compelling customer experience.
This news highlights that businesses relying on a single, low-cost ingredient are vulnerable to price fluctuations. Success in business requires considering the long-term resilience of the profit model; otherwise, they may be easily affected by market changes.