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Published on : Feb 10, 2014

2013 saw the catering sector in China witnessing tepid growth, which experts believe is the lowest in 21 years. According to figures available from the Chinese catering sector, it grew at a rate of only 9% under the impact of the Chinese government’s frugality measures. These observations were made in an industry report published by the China Cuisine Association.

The report also mentions that a number of dining and catering businesses, including some high end dining brands, reported a slump in their revenue—something that had become a rarity in the past decade or two.

According to the report, the total revenue from restaurants in China was USD 420 billion in 2013, but it also showed that the fine dining segment posted the biggest losses.

Faced with these new circumstances, the high-end dining brands are now adopting an altered strategy by introducing group meal offers, offering affordable dishes, and adding breakfast deals to their portfolio, all in a bid to appeal to the tastes of the masses.

The Communist Party of China had launched a massive drive to fight corruption in the country by rejecting bureaucracy and extravagance. In addition to the fine catering business, other businesses such as the luxury goods market and the tourism sector have also witnessed a significant decline in revenue over the last year. Most major brands have registered a drop in the sales of expensive liquor, perfumes, cigarettes, and other luxury products.

Now, the Chinese catering industry is being forced to undergo a transition if it is to survive these new austerity measures that have been stringently implemented by the government. 

According to figures, the growth rate reported by this industry in the first six months of 2013 registered a 3% drop, as compared to the figures recorded during the same period in 2012. This also marked the lowest growth figures recorded after the SARS scare in 2003. Other factors that have impacted this industry include rising labor costs and rental costs.