China’s restaurant and catering industry is grappling with a wave of closures, with nearly 3 million establishments—ranging from fine dining restaurants to cafes and fast food outlets—shutting their doors in the past year. The closures reflect broader economic challenges in the country, including a weak recovery following the pandemic, shrinking assets of the middle class, rising operational costs, and increasing uncertainty.
Economic analysts point to several key factors contributing to this trend. A lack of consumer spending, driven by shrinking household wealth, unemployment, and delayed wages among civil servants, has led to more cautious and value-driven purchasing behaviors. High-end restaurants and “internet celebrity” eateries—businesses that gained popularity through online marketing—have been particularly affected.
“I’ve seen many long-established restaurants close in my city, Taizhou,” said Wang, a local resident. “Even newer establishments are shutting down. It’s a visible sign that the economy isn’t recovering as expected.”
Despite the widespread closures, some sectors, particularly those frequented by government officials, remain relatively stable. However, for many small and mid-sized businesses, the strain is too great. Rising rent prices and increasing costs of raw materials have compounded the difficulties faced by restaurateurs.
The impact on the industry has been far-reaching, affecting all levels of dining establishments. From high-end fine dining, like the closure of the Michelin-starred Opera BOMBANA in Beijing, to popular milk tea chains such as Cuonei Village, which slashed its stores from nearly 500 to fewer than 50, the sector is reeling. Fast food chains, hotpot outlets, and snack shops have all been hit hard, with many scaling back operations or closing entirely.
As the economic outlook remains uncertain, experts believe that the crisis in the restaurant industry is a reflection of broader challenges facing the Chinese economy, particularly for middle-income households. “The closure of restaurants shows us that ordinary people simply can’t afford to eat out anymore,” said Lao Zhou, an online commentator.
While closures have been widespread, the industry continues to navigate an ongoing period of contraction, with many brands making drastic cuts to survive. These trends underline the ongoing economic turbulence that is reshaping China’s consumer landscape.
References:
- rfa.org
- Local Reports from Taizhou and Zhejiang
- Redcan Industry Analysis
