Chinese restaurant goes bust after all-you-can-eat promo goes awry

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All-you-can-eat isn't always the best of ideas.
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Here’s a sage reminder that the all-you-can-eat business model can go very, very wrong.

A hotpot restaurant in China went bust after two weeks because of a deal where customers could eat as much hot pot as they could for a month for only 120 yuan ($19), as reported by Chengdu Economic Daily.

Jianmaner in Chengdu had to close last Tuesday after a spike in bargain hunters who bought the membership left the business 500,000 yuan ($78,000) in debt. 

“We knew we would be losing money [by launching the discount promotion],” said one of the owners, as translated by South China Morning Post. “We wanted to accumulate more loyal clients through this strategy.”

The strategy to build a dependable clientele would also allow the restaurant to get better deals with suppliers, like on beer.

In practice, the plan didn’t work out so well. The restaurant was receiving 500 customers a day, thanks to customers sharing their membership cards with family, friends, and colleagues. 

People even lined up from 8 a.m. to get a meal, and the restaurant opened from 11 a.m. to 11 p.m., with queues snaking right out the door.

In the space of 10 days, 1,700 people had signed up to the promotion, and the membership dues weren’t enough to cover the debt they accumulated, forcing it to close.

The restaurant’s co-owner, Su Jie, said he only slept two or three hours a night throughout the whole ordeal. He took aim at customers behaviour for the disaster, but also conceded the promotion had flaws.

“The uncivilised behaviour of the diners was secondary — the main problem was our poor management,” he said.

Read more: https://mashable.com/2018/06/19/all-you-can-eat-restaurant-goes-bust/

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