How Selling Duck Neck Became a Bad Business

Scale and the squeeze

The era when franchised braised-snack shops looked like a quick path to steady profits is over. Juewei Foods (绝味食品), operator of the Juewei Duck Neck brand (绝味鸭脖), warned investors it expects 2025 revenue of RMB 5.3–5.5 billion, a decline of about 12–15%, and a net loss of RMB 160–220 million — reportedly the first loss since its 2017 IPO. Its peers Zhou Hei Ya (周黑鸭) and Huangshanghuang (煌上煌) have also seen shrinking revenues and wafer‑thin margins, with net profit rates that have wandered in the low single digits. How did a category that expanded to tens of thousands of stores suddenly look so weak?

Why consumers balk

Part of the answer is simple: perceived value. Consumers increasingly regard chain braised snacks as expensive compared with street vendors, packaged snacks or supermarket options. Surveys show most buyers expect to spend RMB 20–49 per visit, but many chain outlets price specialty items far above that band. At the same time, the chain model hasn’t delivered expected scale advantages: central kitchens, refrigerated logistics and factory overhead mean franchisors still shoulder heavy fixed costs, while higher positioning and mall rents raise expenses for brands that leaned toward premium formats.

Overcapacity and a ceiling on growth

Rapid expansion created another liability: overbuilt supply chains. Juewei and Zhou Hei Ya invested heavily in new factories and cold‑chain logistics during growth years, and those capacities are now underutilized as store counts fall — Juewei’s outlets reportedly shrank from a peak near 15,950 in 2023 to about 10,559 by early 2025. With China’s urbanization rate slowing and community‑based retail reaching a saturation point, the room to densify stores has narrowed. Lower foot traffic, rising rents and labor costs have compressed franchisee economics too, turning formerly profitable single‑shop operations into marginal businesses.

Pivoting to survive

Faced with these pressures, the big players are reinventing channels and formats. Zhou Hei Ya and Huangshanghuang are pushing into packaged and retail supermarket shelves; Juewei has reportedly trialed a new boxed‑price mall format, Juewei Fresh Lu, with standardized SKUs and lower entry prices to win back budget‑sensitive shoppers. Will boxed goods and supermarket distribution replace community storefronts? Not overnight. But the shift underscores a broader lesson for Western readers: in China’s fast‑evolving retail landscape, scale without sustained consumer value and flexible channels can quickly become a liability.