China’s catering sector business bounces back

Diners return to restaurants after the optimisation of Covid response.


Customers taste local food at a restaurant in Nanjing, Jiangsu province, on Jan 24 to celebrate Chinese New Year. LIU JIANHUA/FOR CHINA DAILY

February 15, 2023

BEIJINGDiners return to restaurants after optimization of COVID response

At 9 am during Spring Festival, two hours before a branch of the Feidachu Fried Pork With Chili restaurant opened in Changsha, capital of Hunan province, a long line of customers stretching more than 100 meters formed outside the outlet.

Those standing in line were waiting to be given numbers to secure entry to the eatery, located on Huangxing Road Pedestrian Street, one of the city’s most bustling areas.

All numbers were distributed within 30 minutes each day during Spring Festival.

The 70-plus branches of the restaurant in Changsha, Beijing, Shanghai and Shenzhen, Guangdong province, witnessed long lines of customers during the weeklong holiday and for Lantern Festival, which fell on Feb 5.

Lu Wenwei, public relations officer for the chain of eateries, said, “We promised our customers that once they were given a number, we would serve them no matter how long they had been waiting.”

Since December, the catering sector in China has witnessed a fast recovery for dine-in business and delivery services, as well as precooked products, after the authorities announced optimized COVID-19 control measures.

This year, the Spring Festival holiday and Lantern Festival witnessed this rebound, which has given those in the industry added confidence for their operations this year.

According to the Ministry of Commerce, during Spring Festival, sales at key national retail and catering enterprises nationwide rose by 6.8 percent year-on-year.

Such enterprises’ income in Hainan and Hunan provinces rose by 15.3 percent and 10.5 percent, respectively, year-on-year, while those in Zhejiang province witnessed an 8.9 percent rise.

Dong Chao, who researches consumption for the Chinese Academy of International Trade and Economic Cooperation, said this growth trend is good news for the catering sector. As consumption levels during Spring Festival were “a good start”, Dong expects them to stabilize and improve throughout the year.

Tourists dine at a restaurant in Zhongmu county, Zhengzhou, Henan province, on Jan 1. As Spring Festival approached, the consumer market gradually began to recover from the effects of the COVID-19 pandemic. [Photo/Xinhua]

Last year, the Feidachu chain, which was founded in 2003, opened its first branch in Beijing at Chaoyang Joy City. Business was so good that later last year, four more branches opened in the city to ease long waiting times. The new outlets quickly attracted long lines of customers.

Lu said the chain trains its chefs in Changsha, before sending them to branches nationwide to ensure the flavor of dishes remains the same at each of its outlets.

“We are also collaborating with colleges to cultivate talent for our restaurants,” Lu said, adding that the business is expanding elsewhere in China.

At Huda Restaurant, a popular crawfish eatery on Guijie Street, a popular food area in Beijing, a tent was erected during Spring Festival to accommodate customers waiting for tables. During the holiday, the eatery sold 3.25 metric tons of crawfish.

Xiabuxiabu Restaurant Management Co said that during Spring Festival its overall revenue rose by 126 percent year-on-year, and customer flow doubled in its northern region, which includes Tianjin and Heilongjiang province.

Hotpot chain Haidilao welcomed 6.5 million customers at its branches across the country from Jan 23-27, with the peak coming on Jan 26, when it catered to 1.35 million diners.

Zheng Xiaobo, manager of Haidilao’s Changshoulu branch in Putuo district, Shanghai, said tables for Lunar New Year’s Eve and Lunar New Year’s Day were fully booked a week before.

“There are plenty of ingredients for hotpot. Many customers choose it for their family gatherings, as it’s great to eat this dish together. Our peak time was the morning on Lunar New Year’s Eve,” Zheng said.

As 2023 marks the Year of The Rabbit, Zheng said many people bought drinks and cultural and creative products launched jointly by Haidilao and creative cartoon brand Miffy by Dick Bruna.

“Tableware gift boxes and revolving scenic lanterns sold out, and some special drinks whose names have auspicious meanings were also popular,” he said.

The takeout trade was also boosted during Spring Festival. On Jan 22, such orders at Haidilao were double those for the previous year. This trend was more apparent in first-tier cities, and that day, Haidilao’s delivery orders in Beijing rose fivefold year-on-year.

Roast duck is served at a restaurant in the Golden Resources Shopping Mall, Beijing, on Dec 25 — Christmas Day. Customers have returned to dine-in restaurants in the capital following the introduction of measures to stabilize the economy and stimulate consumption. [Photo/Xinhua]

Travel trends

According to Chinese on-demand service platform Meituan, from Jan 21-26, average daily consumption rose by 66 percent compared with the same number of days during Spring Festival in 2019.

According to the 2023 Spring Festival Travel Report issued by online platform Ctrip on Jan 27, travel reservations to Changsha rose by 197 percent year-on-year.

Data from Alipay show that three of the nation’s 10 most popular business areas are in Changsha.

The city’s Wenheyou food court was in high demand on Jan 26, with one netizen posting on Sina Weibo that more than 4,500 groups of people were waiting for tables.

Haidilao’s business boomed in cities as migrant workers traveled home to celebrate Spring Festival with their families. Its branches in cities such as Yinchuan, Ningxia Hui autonomous region, and Xingtai, Hebei province, saw their table turnover rate rise eightfold to meet demand.

At eateries near scenic spots in popular tourist cities such as Xi’an, capital of Shaanxi province, Luoyang, Henan province, and Changsha, table turnover was also relatively high.

Not all restaurants remained open during the holiday week. Gong Xin, general manager of the one-Michelin-starred Ling Long in Beijing, said it closed, as most of its regular customers left the capital for family reunions.

“Beijing residents prefer Chinese cuisine restaurants for family gatherings during the holiday week, while at our restaurant, customers usually come in twos, or at most fours, to dine with friends, or for a business dinner,” Gong said.

The additional payment for staff members during Spring Festival was another reason the business did not open, and its employees were happy to travel home for the holiday, Gong added.

A new menu featuring ox tongue and yellow croaker was launched on Jan 27, when the restaurant reopened. The menu was due to have been introduced in November, but the date was delayed due to the pandemic.

Gong said about half the restaurant’s clientele return to the eatery whenever there is a new menu.

Jason Liu, chef at Ling Long, prepared special menus for Christmas Eve and New Year’s Eve. The restaurant was fully booked for both occasions.

Gong said that during the past three years, customers have been more cautious about spending, especially on wine and other drinks. However, the situation has gradually improved since the start of last month due to the eased COVID-19 restrictions.

Consumption will improve as the influence of the pandemic fades, he said.

“Customers need a little time to feel that everything in life is getting back to normal, and I think that in the latter part of this year business will return to the pre-pandemic level.”

As more customers return, Ling Long plans to open a branch next month in the Bund area of Shanghai.

Diners enjoy food at a restaurant in a shopping mall in New Century Square, Handan, Hebei province, on Jan 24. HU GAOLEI/FOR CHINA DAILY

Government support

Since December, many provinces and cities, including Hubei, Henan, Guangzhou, capital of Guangdong, and Shenyang, the Liaoning provincial capital, have issued consumption vouchers and announced policies to boost the economy.

Some vouchers can be spent on virtually anything, while others are solely for food and beverages.

In Tianjin, the authorities are issuing vouchers worth a total of 115 million yuan ($16.9 million) in several rounds from Jan 11 to the end of this month, with 20 million allocated for the catering and tourism sectors.

In December, the Guangzhou Municipal Commerce Bureau launched measures to provide financial assistance to catering enterprises investing in infrastructure, such as by upgrading outlets, digital construction and building centralized kitchens.

The measures also encourage such enterprises to open branches outside the city and to raise the profile of intelligent services to improve capability and efficiency.

From Jan 2 to 15, about 50 restaurants in the Sanlitun area of Beijing offering cuisines from home and abroad celebrated Sanlitun Global Food Week to bring diners a worldwide culinary experience.

Themed “Delicious 100”, the event was also aimed at boosting regional economic vitality. Each restaurant launched a special menu, with customers given the chance to spend 100 yuan to try three dishes from five recommended choices.

The food week was hosted by Chaoyang District Commerce Bureau and the Sanlitun subdistrict office.

Sun Shuguang, secretary of the Working Committee at the subdistrict office, said the event attracted more than 20,000 customers and resulted in sales of over 2 million yuan for the restaurants.

“Customers could experience a high-end restaurant with favorable prices, which stimulated consumption,” he said.

Sun added that while customers enjoyed the event, restaurants in the area, including Michelin-starred establishments, also played an active part.

During the Spring Festival holiday, Sanlitun subdistrict launched consumption coupons in collaboration with China Construction Bank. Sun said that promoting the catering sector will attract more customers to the area, which will also boost consumption in other fields.

“The catering sector in Sanlitun has basically recovered to the pre-pandemic level,” Sun added.

Customers line up on Jan 23 to secure tables at Jianxinyuan, a time-honored restaurant in Kunming, capital of Yunnan province. YANG ZHENG/FOR CHINA DAILY

Precooked dishes

Precooked dishes were also popular during Spring Festival. By Jan 26, nationwide sales of such dishes reached 130.8 billion yuan, a year-on-year rise of 43.6 percent, according to market observer iiMedia Research.

The main reasons customers buy precooked dishes are for the good taste, the variety of cuisines, as well as convenient storage and packaging, the research company said.

Gift boxes of precooked dishes were listed among the 10 most sought-after items for Spring Festival this year, along with nuts, tea, pastry, and baijiu liquor, according to iiMedia Ranking.

The Spring Festival consumption trend forecast from e-commerce platform JD stated that the business volume for precooked dishes rose sixfold year-on-year.

Fish maw, chicken soup and pickled fish are among the most popular precooked dishes, which are complicated to make and include many expensive ingredients.

Online grocery platform Dingdong Maicai launched several precooked seafood dishes, including king crab, cheese-baked Boston lobster and deep-fried brown crab.

Ou Houxi, in charge of premade dishes at Dingdong Maicai, said the platform prepared seafood dishes because it had noticed people placing more emphasis on nutrition, and fresh and healthy ingredients.

A crab dish that received more than 5,000 orders in a single day was fried in oil at 150 C for two minutes before being fast-frozen at-195 C in liquid nitrogen to retain the original flavor.

Ou said all customers needed to do was heat the dish in a microwave for two minutes and add seasoning.

Dingdong Maicai also collaborated with popular local restaurants to launch a precooked dinner for delivery on Lunar New Year’s Eve. More than 8,000 orders were placed for the meals.

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