Restaurant chain Xibei promises no price hike after former executive insults low-income customers

About eight months ago, when Xibei, a Inner Mongolian restaurant chain, reopened some of its stores as the COVID-19 pandemic receded in China, it hiked its prices. Many customers responded with loud (online) dissatisfaction.  

Under pressure, the company eventually reversed the price increases, but its handling of customer grievances returned to the spotlight this week after a past social media comment by a former executive resurfaced.

The controversial post, which was made back in April last year — right after Xibei announced that it had lowered food prices to previous standards in the face of the backlash — was from Chǔ Xuéyǒu 楚学友, who was the vice president of the company at the time. 

“This is enlightening,” Chu wrote while sharing a Weibo post from a financial writer named Xiàng Xiǎotián 向小田. Commenting on Xibei’s controversy, Xiang had noted in his initial post, “If I am being totally honest, I think the reason why Xibei faced such a strong backlash is because a significant number of Weibo users were offended by the price increases. After all, 95 percent of Weibo users earn less then 5,000 yuan ($773) a month.”

Many Weibo users took offense at Xiang’s words, which they described as a “baseless insult” and a “diss bomb” about their financial situation. Chu also became a target of indignation for what many considered as an approving nod to Xiang’s statement. “I will not eat at Xibei, not because I can’t afford it, but because I don’t want to pay for disrespect, rudeness, and humiliation,” a Weibo user wrote (in Chinese).

Xibei was quick to attempt damage control. On January 10, Chu apologized for his “inappropriate remarks,” saying that he was totally “at fault,”even though he had left the company in September last year. In a statement to media, Yú Xīn 于欣, the chain’s public relations director, wrote (in Chinese), “Xibei welcomes everyone to come dine with us. We won’t discriminate against our customers based on their social status, age, region, or profession.” Yu also promised that Xibei had no plans to raise prices “at the moment.”

However, the controversy didn’t end here. On Weibo, posts (in Chinese) related to Xibei are nearly all highly critical of the restaurant chain. Most of the complaints are about Xibei’s high prices. In a photo shared by a Weibo user, a Xibei menu showed that a plate of stir-fried lettuce was 46 yuan ($7), a big bowl of cabbage and tofu soup was 53 yuan ($8.20), and a steamed bun was 21 yuan ($3.20) — these prices were deemed by many critics to be unfairly high. 

“Eating at Xibei is a colossal waste of money. And the thing is, their food is not even good,” a Weibo user groused (in Chinese), while another one called for (in Chinese) “some regulators to step in to take a critical look at Xibei’s pricing.”

Like many businesses in China, Xibei was hit hard by the COVID-19 pandemic. In February last year, at the height of the outbreak, Xibei’s CEO, Jiǎ Guólóng 贾国龙, said he only had three months’ worth of cash to spare. In April, when restaurants were given permission to reopen , Xibei rolled out price increases for a slew of menu items. The company later reversed the price hikes after a wave of customer anger.