Foodservice Equipment Reports

Chinese Foodservice Market Growth Has Slowed Dramatically

A combination of a slowing general economy, high food-price inflation and food-safety concerns led to a dramatic slowdown in foodservice growth in China in 2013, according to Angela Liu, director of business development at NPD China. Liu presented an overview of the Chinese foodservice market at the Foodservice in the 21st Century Forum March 31 at Hotelex in Shanghai. The Forum program was co-organized by Hotelex, Foodservice Equipment Reports and the Foodservice Consultants Society Int’l.-Asia/Pacific Division.

After years of double-digit traffic and sales growth, overall restaurant traffic for all of 2013 grew only 1%, Liu said, with fourth-quarter traffic down 4% vs. the same quarter in 2012. While overall real growth in China’s gross domestic product held steady at 7.7% in ’13 vs. ’12, growth of accommodation and catering GDP fell from 8% in ’12 to 5.3% last year. Consumer prices for food and beverage jumped 4.7% in ’13 while the overall Consumer Price Index rose only 2.6%. Traffic at very high-end full-service concepts also has been negatively affected by a public campaign against excessive spending by public officials.

Among the segments, full-service restaurants and Chinese quick-service outlets saw their share of traffic rise 2% each, with 29% and 20% of total traffic respectively. Chinese QSRs picked up share vs. global QSR chains in part because of a food-supply safety issue. The bakery/convenience store segment also saw traffic gains.

But Liu said the fundamentals are in place for a rebound in sales and traffic in 2014. Consumer confidence and disposable income are on the rise, especially in the key urban centers that account for most foodservice visits. Consumers have showed willingness to spend more. “The key leverage,” Liu said, “is how to transfer consumers’ will of consumption into actual consumption and how to offer the best product and service to stimulate their need.”

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