In 2003, Saizeriya traveled from Japan to Shanghai and came to Shanghai with great ambitions. On the first day of the store, the founder was dumbfounded: "Customers don't come at all[1]. "The store is located on Nandan Road in Xuhui District, and there is a Pizza Hut a few hundred meters next door. is also making foreign fast food, Pizza Hut has a pizza of 60 yuan, which costs a whole day's salary of Shanghai workers at that time, and countless people rush to deliver money, but Saizeriya often does not even fill half of the seats a day. At that time, Saria's Japanese folks were becoming the favorites of white-collar workers in Shanghai, with long queues for Ajisen ramen and Yoshinoya selling 2,000 bowls of beef rice a day. But Saliya is stuck in the sorrow of no one to patronize her, and she is torn between two sides. But 20 years later, Saizeriya seems to have exchanged scripts with the "trendsetters" at that time: Pizza Hut, whose growth rate has slowed down and cannot open stores, has gradually become a drag on Yum China; Yoshinoya and Ajisen Ramen have been losing money year after year, closing their stores one after another, and they have become the tears of the times. In the bleakness, it was Saizeriya who jumped to the C position in today's catering market. 
Not only is it sought after by consumers, but it is also a new genre of "Samen", which is on a par with "Maimen", and it also earns a lot of money. In fiscal year 2023, Saizeriya's revenue increased by 27% year-on-year to RMB 8.9 billionThe operating profit of 600 million was 17 times that of the previous year; Of these, almost 8 percent were contributed by China [3]. The Chinese catering market in 2023 can be called hellish survival, with the number of catering companies that have been revoked twice as many as in 2022, hitting a new high since 2020 [4]. The old Pacific Coffee and Christine fell, and the new capital darlings Tiger Head Bureau could not escape the end of bankruptcy. The catering market in the involution is full of wreckage, and Saria, who has always been a supporting role, suddenly became the biggest winner? In the praise of all the "Samon" cultists about Saria, there are nothing more than these points: "It doesn't think I'm poor", "I don't look at the menu and order casually"; Speaking of which, it's just that it's cheap and full. But if you only look at **, in fact, Saizeriya is not much cheaper. In 2023, the unit price of Saizeriya is 41 yuan, which is much more expensive than McDonald's 28 yuan. Even if you take out the 34 yuan in 2019, there are many brands such as Mr. Rice and Wallace that are cheaper than it. It's not so much that Saizeriya is "cheap", it's more about making customers feel "worth it". First of all, Saliya is positioned as an Italian family restaurant, not a fast food that can be eaten and gone. Compared with peers with similar positioning, the unit price of Pizza Hut is 75 yuan, and Xibei Noodle Village is more than 100 yuan. The implicit subtext of the "family restaurant" is that the whole family can eat and drink well here. However, due to rising costs, the prevailing practice in the restaurant industry is to try to reduce SKUs, preferably a large single product to support the main revenue force. Taier sauerkraut fish only sells one flavor of sauerkraut fish, and the total number of dishes is only more than 20, but it has opened more than 500 stores, with an annual revenue of more than 4 billion. Pizza Hut, which also makes Western food, is great! Johns, leaving only the main options such as "pizza" and pasta. However, Saria's menu covers 100 SKUs and 11 categories, among which, in addition to pasta, baked rice, pizza and other "best-selling items that can be sold right away", about 10% of the dishes are reserved to enhance the restaurant's image, such as grilled snails, squid ink pasta, dessert wine, etc., the main one is everything. 
In addition, since opening its first store in Shanghai in 2003, Saizeriya's store location strategy can be basically summarized as a big city and a large business district, with stores in Beijing, Shanghai and Guangzhou alone accounting for 82% of the total stores in China. It wasn't until around 2017 that Saizeriya cautiously walked out of Beijing, Shanghai and Guangzhou, and came to Tianjin, Hangzhou, Nanjing and other places to open stores. This location strategy is a key step in creating "cheap" for Saria. In the shopping mall in Beijing, Shanghai and Guangzhou, with a bowl of ramen**, you can order a pasta and salad in Saizeriya, and you can also drink all-you-can-drink, no wonder netizens are worried that Saizeriya can't pay the rent. Because it was cheap enough, Saizeriya got a gold medal for avoiding death: Even though the taste is hard to describe and the pre-made dishes are blatantly used, it doesn't stop it from having long queues every night and weekend. Fortunately, there are enough people who are willing to pay for Saria, which makes Saizeriya not only able to pay the rent, but also has considerable earning power. In 2022, Saizeriya's net profit margin will be 39%, net profit 28.3 billion [5]. In contrast, Hefu Lao Mian sold a bowl of bone soup noodles for 35 yuan, and was repeatedly scolded, but the result was a net loss of 700 million yuan in three years [6]; The village base, which makes lunch for migrant workers, is also not having a good time, and its net profit margin in 2022 is only 066%, and the net profit margin of the most profitable year was only 25%。
As we all know, fast food in China is not a good business, only McDonald's can make a lot of money by collecting rent, and the actual net profit margin of the remaining fast-food chain brands is only about 4%, far lower than the average of 8-12% in the restaurant industry. In fiscal 2019, overseas markets, mainly China, contributed 46% of operating profits, and by fiscal 2023, they accounted for 80%. When the front of the store next door has changed wave after wave, there is no shortage of ten-year-old stores in Saria, which has become a landmark of the mall. The last one is cheap and profitable, and Mixue Bingcheng is a top student. In the first nine months of 2023, the revenue of Mixue Bingcheng will be 15.4 billion, and the number of stores will be 36,153, and its franchise proportion will be as high as 998%, and the proportion of self-produced raw materials accounts for 60% [5]. It is not so much that Mixue Bingcheng sells milk tea, but that it sells milk tea raw materials to franchisees. Leaning on 1With 60,000 franchisee brothers, Mixue Bingcheng has successfully turned the milk tea business of To C into a business of To B that guarantees income during drought and flood. However, Saliya not only has a low unit price, but also all its stores are directly operated. This means that it has to make enough profit from the 18 yuan pasta to make both consumers and every store to make money. Almost all the "hard to make money" bugs have been collected, how did Saria make money? Saria, who is cheap and can make money, first of all, thank herself for choosing a good category:In the 1970s, gyudon rice was a national food in Japan. Saizeriya's founder, Yasuhiko Masagaki, took a different approach to bringing back Italian food from Europe[1], bypassing the Red Sea and refreshing Japan, which was tired of eating gyudon. Moreover, Italian cuisine pays attention to the original taste, the method is simple, and it is suitable for standardization. Later, with the wave of chaining, ** kitchen + cold chain began to become the standard configuration of Japanese catering enterprises, and Saizeriya quickly started to make prefabricated dishes to lay the foundation for store expansion. More importantly, in the face of the three mountains of raw materials, rent, and manpower, Saizeriya has truly done the ultimate in slamming the door. First of all, on the raw material side, Saizeriya personally verified a simple truth: since some hardships have to be eaten sooner or later, the sooner the better. Around 2020, when China's catering brands shouted the slogan of "** chain construction" and were in full swing in the upstream, Saizeriya had been working silently on the raw material side for decades. Since 1988, Saizeriya has built a 4,200-acre farm in Fukushima, specializing in lettuce, tomatoes, and rice, and a kilogram of tomatoes can be cheaper than the market for more than 100 yen [7]. As for cream, milk, and meat, they have been purchased in large quantities from Australia for a long time, and their costs are much lower than those produced in Japan. 
Figure: Saria's self-developed tomato seeds In 2009, Saria's raw material costs accounted for 35% of revenue5%[1], after ten years of inflation and raw materials** rising year after year, its raw material cost still accounts for 36%[8], which is lower than the industry average of 40%. In fact, raw materials are only a small headache for catering brands, after all, compared with the rent and manpower that often doubled in five years, the increase in raw material costs is not significant, and the range of cost reduction is also limited. Compared with other peers, the secret of Saria's cost reduction and efficiency increase is this:The rent can be saved, and the location is "the non-core location of the core business district"; If you can use temporary workers in terms of manpower, you will never sign a formal contract. With a similar store opening strategy to Haidilao, Saizeriya has reduced the proportion of rent costs to 13%[8], far lower than the industry average of 20%. According to Narrow Door Restaurant, 76% of Saliya's Chinese stores are opened in shopping malls in Beijing, Shanghai and Guangzhou, but most of them are hidden in the corners of shopping malls, the kind that cannot be found without navigation. The same is true for Haidilao, which opens its stores in non-core locations in the core business district, relying on its brand influence, not only to achieve "the aroma of wine is not afraid of deep alleys", but also to maintain the rental cost at a very low level of 8% all year round. For example, Haidilao's store in Xidan, Beijing, did not choose Joy City, but opened on the 7th floor of the 109 Wedding Jewelry Building, half a street away. Despite being in the traffic depression of the business district, the store can still achieve annual sales of 10 million yuan, ranking among the top stores in Beijing [9]. As far as Haidilao is concerned, it can rely not on natural traffic, but on service + brand drainage; For Saria, cheapness is its best drainage. 
And the last link of Saizeriya's "cheap" manufacturing is its use of everything to save labor costs. In 2019, Saliya's labor costs accounted for only 24% of her income[8], and a large number of temporary workers and university students supported half of her wealth. For example, Guangzhou Saizeriya has 1,300 full-time employees and 2,000 hourly employees, with a full-time and part-time ratio of nearly 1:2 [10]. Saliya claims to the outside world that "there is no kitchen knife in the kitchen", which on the one hand means that its ** kitchen is strong and the proportion of pre-made dishes is extremely high. On the other hand, it also means that its employment threshold is extremely low, and the work of the back kitchen is "handed" to ensure that employees can be competent for the work of the front desk and the back kitchen at the same time, and the value of a single labor force can be maximized. In order to improve work efficiency, Saizeriya requires that the bottom line of the meal time is 8 minutes, and the cooking bags will be divided into one person in advance; Saizeriya even did the statistic that without using a tray to serve, it can be faster than 86 sec [11]. As a result, in a 300-square-meter store, Saizeriya can have only 4 clerks [12] and 27 employees for a similarly sized Taier sauerkraut fish [13]. This extreme method has been tried and tested in the Japanese and Chinese markets, and Saizeriya has been going on for decades. But the question is, why is Saliya only popular now? Before Saizeriya came out of the circle, she was a little transparent in China for 20 years. In 2003, when a newcomer to Shanghai, Saizeriya sold a salad for 22 yuan,[14] and consumers voted with their feet, turning to Ajisen Ramen and Pizza Hut, which were newer and more beautiful and "face-saving". Seeing that the road to ** did not work, Saizeriya committed herself to being a replacement for Pizza Hut. The approach is also very simple: crazy price reduction. Pizza Hut sells pasta for 28 yuan, while Saizeriya sells for only 18 yuan, and has to repeatedly reduce the discount to 9 yuan, and the customer flow has soared from more than 250 to more than 1,000 a day [14].However, because the employees were all dispatched from Japan and the ingredients were imported, Saizeriya lost money for the first five years [15]. Thanks to the fact that the Japanese headquarters was listed shortly after the company, it had enough confidence to inform China that "each store should be prepared to lose money for six years first[16]". In Saria's vision, it's okay to be tired in the early stage, and when the scale expands and costs are cut in the future, there will always be good days. But the reality is that it has been hard for more than ten years. In 2008, Pizza Hut stores expanded from 100 five years ago to 300, and Ajisen Ramen has become the "No. 1 ramen stock"; At this time, through cost reduction measures such as recruiting local employees and replacing ** merchants, Saizeriya has just come out of the quagmire of losses, and there are more than 30 stores [14]. In the following decade, China's catering market rose at an unexpected speed, with the scale from 15 trillion soared to 5 trillion, exotic cuisine, local cuisine, snacks and fast food and other categories continue to emerge and subdivide. The investment and financing of the catering industry has also advanced by leaps and bounds after 2020, and for a while, those who make ramen, fried skewers, and sell Malatang are all vying to be the "first share". In the more than ten years that the Chinese catering market has been big and big, Saizeriya has been quietly and obscenely developing. It insists on slowly expanding stores at an average rate of more than 40 stores per year, and gradually covers the core business districts of Beijing, Shanghai and Guangzhou before considering entering the surrounding second-tier cities. When peers have blown up the bubble of a single store with a valuation of more than 100 million, and they do not hesitate to burn money to subsidize in exchange for a larger GMV, Saizeriya has become an outlier:Neither chasing scale nor blindly doing high revenue. Different from the common algorithm in the industry of "number of restaurants x average turnover rate x per capita customer unit price = single-day revenue", Saizeriya values per capita revenue and actual profits. At Saria, the core measure of store operations is "hour efficiency", which is the turnover generated per employee per hour. For example, a 300-square-meter store in Japan has an average daily revenue of 150,000 yuan, the operation requires 30 35 hours, which is the workload of 4 employees, and the efficiency of each person's working hours is 400 500 yuan [12]. Under the guidance of working hour efficiency, the monthly revenue of a single store of Saizeriya's China stores reached 6250,000 yuan, with tears and a net income of 100,000 hard-earned money. If it is calculated as 996 working hours of a large factory, then according to the efficiency level of Saria's working hours, it is equivalent to an average annual income of 2 million per capita.
In order to ensure the store's profits, Saliya did not hesitate to give up many seemingly tempting options, such as its insistence on not doing takeout, and even stated on its website that "all products are sold in the store". All kinds of outdated and old-fashioned practices have made the miracle of "pasta only sold for 18 pieces, but it is still far from going out of business". In the final analysis, this time is different from the past, and the set that Ajisen played at the beginning will not survive for one episode in the current era of involution. Nowadays, consumers are clutching their pockets and letting the live broadcast and co-branding fry be hot and hot, which is far less than the reality of the cheap three or five yuan. There is such a line in "Flowers", "Not everyone makes money like you do math problems, most of them are like me, saving coin by coin, and one day you do math problems wrong, you will know the importance of saving money in a coin like me." For Saria, it's just a brand accustomed to making coins in the mud and just in time to come across a version of the environment where there are no math problems to do. 
References
1] "Service Details 088: Customers Love to Eat to Sell Best" Yasuhiko Masagaki.
2] White-collar workers in first-tier cities abandoned Yoshinoya? Ellemen.
3] Saizeriya expects a record net profit, China and other Asian businesses are bright, Nikkei Chinese Net.
4] 2023 is not over yet, 12650,000 restaurant companies have "died", red meal network.
5] The financial report of Saizeriya and Michelle Bingcheng.
6] The left hand "price reduction", the right hand "join", high-end noodle restaurants and Fu Lao noodles for the IPO to put down their figures, Bronco Finance.
7] How Saizeriya plays with the vertical ** chain, Weng Chunhui.
8] Starting with the financial report: Reading the key data of the business model, Kensuke Yabe.
9] The opening of stores in unpopular locations exploded, with annual sales exceeding 50 million, and the turnover rate of crazy expansion has dropped significantly....Haidilao: I did it on purpose, Venture State.
10] Guangdong Saizeriya official website.
11] In the "Italian Sand County" Saria, young people happily buy drunk, daily people.
12] Qicheng Research: Learning from Salia, how to create a "cost-effective" restaurant chain? Qicheng Capital.
13] Business Model Industry Research Program |Taier sauerkraut fish, a good dish designed for meals, Xingyuan Consulting.
14] Encirclement and suppression of Pizza Hut, the business community.
15] Saizeriya in China, Weng Chunhui.
16] It's been 20 years, and the only thing waiting for you standing in place is Salia, the flavor planet.
Author: Huang Qianlin
Editor: Hu Xiaoqi.
Design: Shu Rui.
Drafting: Shu Rui, Huang Qianlin
Editor in charge: Hu Xiaoqi