China's catering market rebounds, fuels consumption growth in H1

People enjoy dinner at a restaurant in the Chaoyang neighborhood, Beibei district, southwest China's Chongqing Municipality, July 19, 2023. (People's Daily/Qin Tingfu)

China's catering sector saw revenue soar by 21.4 percent year-on-year to over 2.4 trillion yuan ($332.9 billion) in the first half of 2023, according to data from the National Bureau of Statistics.

The growth rate was 29.1 percentage points higher than that of the same period in 2022, and 13.2 percentage points higher than China's total retail sales of consumer goods, according to the China Cuisine Association (CCA). From January to June, the country's catering revenue exceeded the levels reached during the same period in 2019.

In the first six months of this year, as passenger flows recovered, a slew of policies and campaigns to promote consumption were launched nationwide. These efforts have led to a more diverse range of catering options and injected new life into the catering market, the CCA said.

According to the CCA, China's catering market is experiencing a strong recovery. This summer, the number of cross-city travelers is expected to increase significantly, contributing to local catering consumption growth.

Over half of major domestic restaurant chain stores expect their revenue this year to return to the levels of 2019, according to a report jointly released by the China Chain Store and Franchise Association and PwC.

Yan Dongsheng, founder of Peijie Hotpot, a popular hotpot chain in southwest China's Chongqing Municipality, said he never anticipated that the catering industry would begin to bounce back starting on New Year's Day this year.

Since the beginning of this year, over 10 branches of the hotpot chain across the country have smashed records. For instance, one Peijie Hotpot outlet's monthly turnover set a new national single-store sales record for the brand. During this year's May Day holiday, the turnover of the brand's outlets in Chongqing, east China, and south China increased significantly compared to the same period in 2021.

A photo shows beers during the 33rd Qingdao International Beer Festival in Qingdao, east China's Shandong Province, July 16, 2023. (People's Daily/Zhang Jin'gang)

In the first half of this year, over 1.676 million new catering companies were founded in China, up 23.4 percent year on year, according to corporate information provider Tianyancha. Notably, over 7,610 new catering companies were established in Beijing during the same period, a year-on-year increase of 63 percent.

The emergence of the nighttime economy has created a golden opportunity for the catering sector, spurring growth in late-night dining and consumption.

Data from Chinese online food delivery giant Meituan showed that in the first six months of this year, group-buying orders for late-night snacks in China soared by over 143 percent year on year, and the number of restaurants offering late-night snacks increased more than 47 percent compared to the same period a year ago.

Beijing recently launched a nighttime consumption campaign involving over 40 commercial districts and 200 brands, offering more nighttime consumption choices, including catering options, to citizens in the city.

Companies and merchants in the catering sector are rolling out multiple measures to promote consumption.

Peijie Hotpot, for instance, has cut unpopular dishes and is offering three to five new dishes every quarter this year. "Cutting unpopular dishes can help improve the overall efficiency of our outlets and enhance our cost and quality control," said Yan.

Meanwhile, catering brands, including Starbucks and Haidilao, are releasing new products via livestreaming on Meituan.

Fast-food chain Pizza Hut teamed up with the popular Chinese video game Genshin Impact, launching a collaboration in over 200 stores across China in the first half of this year, drawing throngs of young people.