XIAOCAIYUAN Proactively Reduces Weight of Food Delivery: Dine-in Table Turnover Rate Rebounds, Net Profit Drops 24%

XIAOCAIYUAN trades short-term profits for dine-in customer traffic, as a proactive operational adjustment unfolds.

On August 14, XIAOCAIYUAN released its unaudited interim results for the six months ended June 30, 2026. In the first half of the year, the company's revenue reached RMB 2.903 billion, a year-on-year increase of 7.0%; profit for the period was RMB 289 million, a year-on-year decrease of 24.3%; and the net profit margin fell from 14.1% in the same period last year to approximately 10.0%.

Revenue growth mainly came from store expansion and the dine-in business. By the end of June, XIAOCAIYUAN had 824 stores in operation, an increase of 152 stores compared to the same period last year, representing a growth rate of approximately 22.6%. Among these, 351 stores are located in third-tier cities and below, contributing nearly 40% of the company's store revenue.

XIAOCAIYUAN is a fully directly-operated mass-market Chinese restaurant chain, specializing in home-style dishes and new Anhui cuisine. Affordable pricing, direct-operated store expansion, and supply chain standardization constitute the main features of its business model.

Food delivery was previously an important growth channel for XIAOCAIYUAN. In 2025, the company's food delivery revenue increased by 3.0% year-on-year to RMB 2.065 billion, accounting for 38.6% of total revenue; food delivery orders rose from 29 million to 34.3 million.

In the first half of this year, XIAOCAIYUAN's food delivery revenue decreased by 10.6% year-on-year to RMB 945 million, with its share of revenue dropping from 39.0% to 32.6%, and orders falling from 16.8 million to 14.7 million. The company stated that this resulted from a proactive adjustment of business focus, with greater emphasis on high-quality food delivery services.

Meanwhile, it drove increases in dine-in customer traffic and table turnover rates through a "price-for-volume" strategy; the rise in the proportion of raw material costs was related to the adjustment of dine-in prices at the end of 2025, the launch of the 88VIP membership system, and proactive concessions to consumers.

In the first half of the year, XIAOCAIYUAN's dine-in revenue increased by 18.1% year-on-year to RMB 1.945 billion, with its share of total revenue rising from 60.7% to 67%; the overall table turnover rate increased from 3.1 times per day to 3.5 times per day.

However, the higher table turnover has not yet offset the impact of price reductions and the contraction of food delivery on single-store revenue. The average spending per customer for dine-in dropped from RMB 57.1 to RMB 50.5, and sales at 617 same-store locations decreased by 12.5% year-on-year to RMB 2.211 billion.

From a cost structure perspective, reducing the weight of food delivery should have reduced platform fulfillment and promotional expenses. In the first half of the year, XIAOCAIYUAN's combined expenses for food delivery services and advertising promotions decreased by approximately RMB 26 million year-on-year, but this saving was insufficient to improve overall profitability: during the same period, the combined costs of raw materials and staff increased by approximately RMB 297 million.

Price reductions lowered average spending per customer and same-store sales, while store expansion and growth in dine-in customer traffic increased investments in ingredients, personnel, and store operations. Consequently, the cost benefits brought about by channel adjustments were offset by consumer concessions and expansion costs.

Whether new stores can improve single-store revenue after reaching maturity, and whether supply chain efficiency can absorb the pressure from increased labor and raw material costs, remains to be verified by subsequent data.