Aside from needing it to survive, food is one of the best things in life. When food is delicious and inexpensive, it’s even better. But, what happens when it’s so delicious and so inexpensive that the bargain becomes unsustainable? A restaurant in China learned that lesson and it’s still fresh.
This past December, a restaurant called Jiamener opened in Chengdu, China. Specializing in hot-pot, it grew pretty popular. For those of you who don’t know, hot-pot is a popular East Asian dining style in which there’s a simmering pot of soup stock and a table full of uncooked ingredients. Usually, vegetables, thinly sliced meats, various kinds of seafood, and more are part of the smorgasbord. They’re dipped in the simmering broth and cooked right at the table, excellent for sharing with large groups.
Starting June 1, restaurant owners Su Jie and college buddy Wang Mengfan, ran a promotion for the month of June: unlimited hot-pot for $19. For the whole month of June, as long as customers paid the $19 membership fee, they could eat as much as they wanted. People choose soft-serve ice cream over hard ice cream seven out of 10 times, but at Jiamener, it seemed the whole province sought to take advantage of the meal deal.
They reportedly served more than 500 customers a day, with eager diners lining up around the block at 8 AM and some not leaving until after midnight. Restaurant employees worked 10 or more hours per day, with the haggard owner, Su Jie, reporting just a few short hours of sleep per night. Two weeks after the promotion, the restaurant racked up close to $80,000 in debt, declared bankruptcy, and close its doors.
“We knew we would be losing money [by launching the discount promotion]. We wanted to accumulate more loyal clients through this strategy,” said one of the owners. By the influx of business, they hoped to also foster stronger dealings with food and beverage distributors, farmers, and other local restaurants. What they got in return was enough mayhem to force them to close.
“The uncivilized behavior of the diners was secondary – the main problem was our poor management,” owner Su Jie said.
Promotions are usually great for restaurants, but a $19 membership card that gets unlimited food for a month? That’s a bold move that didn’t pan out as well as they’d hoped. Talk about getting eaten out of house and home.