China’s Dining Sector Decimated: Wave of Closures Spreads

The restaurant industry in China is also experiencing a very difficult time. The latest figures from China’s National Bureau of Statistics show that nearly 460,000 restaurant businesses canceled or suspended operations in the first quarter of this year, an increase of about 232 percent over the same period last year, of which 180,000 restaurants closed in March. The manager of a restaurant in Wuhan complained that there were fewer and fewer customers and that the monthly salary of local sanitation workers had been reduced by 30 percent to 2,000 yuan. The information was reported by the RFA website.

After the COVID-19 outbreak, China’s consumer market is still in decline, and the wave of business closures has spread from the manufacturing sector and import and export trade to the restaurant sector. According to reports in Chinese media such as “Sohu.com,” the latest figures from China’s National Bureau of Statistics show that

• 459,000 restaurant businesses in China were cancelled or revoked in the first quarter of this year,
• this numerb includes  167,000 in operation in January and 112,000 in February. In March, the number reached 180,000; for comparison the first quarter of last year, fewer than 140,000 restaurant businesses had canceled or suspended operations.

In an interview with Radio Free Asia on Tuesday, Shandong resident Ms. Lu said that because residents could not find work and lost their source of income, they had to cut food and clothing. She said, “All walks of life are in recession. The outlook is not particularly good now. People have money in their hands and dare not spend it to cope with inevitable situations. Therefore, people’s consumption patterns have changed. They can’t see hope and I can’t see In the future, in order to maintain normal expenses, when spending money, it is necessary first to make comparisons and secondly to make a budget, such as the approximate cost of children’s education, the approximate cost of living expenses, the approximate cost of the elderly or themselves sick, etc.”

Ms. Lu said that the recession in the restaurant sector is the most direct manifestation of the reduction in Chinese residents’ income: “The restaurant sector is the most direct manifestation. Whether or not people go to restaurants to eat can be seen at a glance .”

Frugality is damagin restaurant business

Residents’ frugality has led to the closure or shutdown of restaurant businesses

Weibo Internet celebrity “Catering Boss Neifan” wrote about this on April 20: “After experiencing the entrepreneurial wave in the past year, the restaurant market in the first quarter of this year entered a period of rapid replacement. It has not been able to find a breakthrough. Catering people and novices who have escaped the siege can only be left behind by the cruel reality.”

Mr. Hong, manager of a private catering business in Wuhan, told this station that income from customer consumption can hardly offset rent and labor costs, which is one of the main reasons for restaurant closures: “Rent cost is high, labor cost is high, prices are rising, and customer consumption is falling. Think about how you can continue to do well. There are still some restaurant businesses that are doing very well, but the big restaurant business yes is not doing well. Small meals give small profits but quick turnover, and business is doing well, even the investment in decoration cannot be recovered, so it cannot be done.

According to reports, well-known, established and leading restaurant companies also closed their doors in the first quarter of this year. For example, China’s two leading new bakery brands, “Hutouju Standard Chartered Cake Shop” and “Momo Dim Sum Ju,” after struggling for nearly two years, at the beginning of this year “Hutouju” filed for bankruptcy liquidation “Momo Dim Sum Bureau” canceled its business; in addition, sub-brands created by leading brands such as “Xiabuxiabu” and “Naixue” closed their stores and closed on a large scale.

So s cannot yet speak of an apiena recovery of consumption in CIna, notwithstanding much official information. There are still business sectors that are in distress, and their crisis comes to affect the city environment as well, making it more dreary.