Let the common people eat well, it's a long-term business: The "stability" and "progress" behind Little Vegetable Garden's 2025 annual report

Making a good business for the common people can also generate high returns.

CICC Research reports indicate that Xiaocaiyuan achieved approximately 10% growth in dine-in sales during the Spring Festival holiday this year, outperforming peers. This “good start” is actually a reflection of Xiaocaiyuan’s steady development over the past year.

With the full-year 2025 performance officially disclosed, this Chinese restaurant leader has once again proven itself with data: it has maintained its original intention of “delicious and affordable” while safeguarding profit margins.

1. Maintaining High-Quality Growth Momentum

Many say the restaurant industry in 2025 is “difficult.”

But Xiaocaiyuan’s annual report proves one thing: as long as the direction is right, the difficult road becomes wider and easier to walk.

Let’s look at some key indicators. In 2025, the company’s total revenue reached 5.345 billion RMB, with an annual profit of 715 million RMB, with core data firmly at the upper end of market expectations. More importantly, amid industry-wide price reductions to increase volume, Xiaocaiyuan’s profitability did not decline—in fact, it improved—thanks not to sacrificing quality but to real operational efficiency.

Where does efficiency come from? One is doing less, the other is adopting technology.

Doing less means continuously streamlining SKUs. Xiaocaiyuan’s menu is kept around 50 dishes year-round, much fewer than restaurants with hundreds of items, reducing kitchen pressure significantly. Chefs don’t need to memorize hundreds of recipes, inventory is simplified, and error rates naturally decrease.

Adopting technology involves the widespread use of cooking robots. Over 200 stores have already implemented cooking robots, greatly reducing kitchen workload. Robots handle standardized stir-frying, allowing chefs to focus on the essence of dishes—improving labor efficiency, stabilizing quality, and reducing costs.

Another notable change is the return of dine-in.

In previous years, delivery accounted for nearly 40% of revenue—a passive choice during special periods. In 2025, Xiaocaiyuan proactively optimized its business structure, controlling delivery’s share within a reasonable range and refocusing on dine-in. Why? Because only by sitting in the restaurant can customers truly experience the “smoke and fire,” and establish emotional connections with the brand and customers.

As scale grows and profits stabilize, how does Xiaocaiyuan treat shareholders?

The company’s choice is: genuinely distribute profits.

In 2025, the company paid out 69.8% of its profits as dividends. Such a high dividend payout in the Hong Kong restaurant sector is rare. This reflects management’s confidence in future cash flow and provides a tangible explanation to long-term investors.

In such a challenging environment in 2025, delivering such results shows that Xiaocaiyuan is not just good at opening stores but also understands management and returns.

2. “Dual-Drive” of Digitalization and Supply Chain

In business, there’s an unwritten rule: when a company’s scale surpasses a certain threshold, efficiency often declines rather than improves.

More stores mean larger management radius, which can distort standards; more complex processes lead to information distortion and slower decision-making. This is the “inverted U-shaped curve” that chain restaurants cannot avoid—scale brings benefits, but scale can also become an enemy of efficiency.

By the end of 2025, Xiaocaiyuan has 819 stores, steadily moving toward its 1,000-store goal. At this point, how to avoid the “big company disease”?

Xiaocaiyuan’s answer is clear: improve efficiency through digitalization and ensure certainty through supply chain.

In 2025, Xiaocaiyuan brought top-tier talent with Alibaba backgrounds into its core management team.

Previously, restaurant management relied on experience and intuition—store managers scheduled shifts by feel, chefs stocked ingredients based on experience, and headquarters made decisions from reports. Now, Xiaocaiyuan aims to build a digital decision-making hub. Tech talent from internet giants brings not just lines of code but a comprehensive data-driven management methodology: understanding customer preferences from massive transaction data, using algorithms to forecast inventory needs for different stores, and employing systems to standardize operations across hundreds of outlets.

The most direct result of this system is Xiaocaiyuan’s 88VIP membership program.

If you’re a regular customer, you’ve likely noticed changes. Dine-in discounts of 12%, a 68 RMB no-threshold coupon for meals, free rice and napkins, and weekly half-price dishes. These benefits are not just simple discounts but precise user engagement—solving a key industry problem: how to turn “passersby” into “regulars,” and “regulars” into “loyal customers.” The restaurant industry is characterized by “high frequency, low loyalty,” with consumers having many choices. How to make Xiaocaiyuan their repeated destination?

As a member, every purchase accumulates benefits, every visit feels “remembered”—knowing your preference for mild spice, remembering your favorite dish, even sending a small surprise on your birthday. This is the warmth brought by data.

By the end of 2025, Xiaocaiyuan’s millions-strong membership base is transforming from “cold digital numbers” into “tangible, reachable, communicable, serviceable” brand assets. The rising repurchase rate is driven by this membership system: using internet efficiency to deliver human touch in dining.

If digitalization addresses “managing people,” then supply chain management solves “managing goods.”

In 2025, the most significant development in Xiaocaiyuan’s supply chain was the near-completion of a 1-billion RMB investment in the Ma’anshan central factory, which is about to start full production. This factory is designed as the supply chain hub for 3,000 stores, integrating processing, fresh ingredients, training, logistics, and warehousing.

What does this mean for consumers?

It means that no matter which Xiaocaiyuan restaurant you dine at across the country, the braised pork on your plate will taste the same. Because all stores’ fresh ingredients and ingredient packs come from the same “central kitchen.” Chefs receive standardized, high-quality semi-finished products, enabling faster service and smaller flavor deviations. The “human management” in kitchens is minimized, replaced by standardized, stable output.

For the company’s cost structure, this factory signifies the realization of scale effects. As capacity ramps up, bulk procurement advantages will become more apparent. Why can Xiaocaiyuan keep the average check around 50-60 RMB and still be profitable? The answer lies in this factory—every penny saved at the front end is backed by supply chain efficiencies at the back end.

With both digitalization and supply chain systems in place, scale is no longer an enemy of efficiency but a force multiplier.

3. Expanding New Frontiers: Downward Market, Overseas, and Long-term ESG Commitment

By the end of 2025, the total number of stores reached 819, covering 193 cities across 14 provincial-level administrative regions.

In terms of store count alone, Xiaocaiyuan firmly holds a leading position in the domestic Chinese restaurant market. Notably, it has achieved this scale through a direct-operated model. Unlike asset-light franchise expansion, direct operation requires investing in, managing, and bearing risks for each store. Achieving this scale through direct operation indicates the store model has been thoroughly validated and profitability is real.

But scale is not the goal. Facing the grand blueprint of 3,000 stores, the real question is: where is future growth?

The answer lies in two keywords: downscaling and going overseas.

Regarding downscaling, new stores in third- and lower-tier cities remain steady, while first- and new first-tier cities continue to expand. This “gradient” layout ensures both brand momentum and access to different consumer dividends.

Why does this fit so well? Because Xiaocaiyuan’s positioning inherently has “full-scenario coverage.” From community malls to high-end shopping centers, from first-tier cities to county markets, from family dinners to quick work meals, it can find its place. The core is: Xiaocaiyuan uses “delicious and affordable” as the common denominator to connect diverse consumer needs across different groups and scenarios.

In terms of overseas expansion, Xiaocaiyuan has taken a significant step. In 2025, the first store in Hong Kong began renovation, with plans to open this year.

Why Hong Kong? Because it is a “bridgehead” for Chinese cuisine going abroad. The Hong Kong market has high acceptance of mainland Chinese brands, similar consumption habits, and can radiate to Southeast Asia and beyond. Establishing a foothold in Hong Kong provides a “passport” for further international expansion.

For Xiaocaiyuan, going overseas is not just opening a few stores. It signifies that the company’s standardization, supply chain, and brand management capabilities have reached a level capable of exporting abroad. After all, the biggest challenge in Chinese cuisine’s internationalization is not taste but “ability to replicate.” If it can succeed in Hong Kong, a highly competitive market, then “where there are Chinese people, there is Xiaocaiyuan” is no longer just a slogan but a practical roadmap.

Additionally, in 2025, Xiaocaiyuan received multiple awards in ESG, including the Globle “Golden Grid Award - Annual Social Responsibility Award.” Behind these awards is the company’s deepening understanding of “social responsibility.”

In 2025, the company participated in Tongling City’s Hope Project for two consecutive years, supporting over 90 prospective college students; the same year, it donated 3 million HKD to aid the Hong Kong Tai Po fire rescue, demonstrating timely social response and care. Xiaocaiyuan is extending the mission of “making the common people eat well” from the dining table to broader social space.

4. Conclusion

Looking back at Xiaocaiyuan’s 2025, more than just scale growth, its internal focus is more noteworthy.

In 2026, with the full operation of the Ma’anshan factory, continuous iteration of digital systems, and breakthroughs in overseas markets, we have reason to believe that this enterprise, deeply rooted in the Chinese restaurant sector, will go even further.

After all, a business that makes the common people eat well is always the longest-lasting business.