Tough times to continue

Updated: 2014-02-06 08:17

By Wang Zhuoqiong (China Daily USA)

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Government policies to curb lavish spending of public funds continue to squeeze the profits of high-end restaurants, despite efforts to target non-governmental trade, according to an industry report.

The report said the China Cuisine Association's attempts to boost the number of non-governmental customers produced a slowdown in profit decline in the third quarter of 2013.

The association said the industry has been improving slowly, with a 8.9 percent year-on-year rise in revenue in the first three quarters of last year. Growth was down by 4.3 percentage points, but the decline was slower than that seen in the first half.

Prospects in the restaurant industry fluctuated after a downturn in July. Between January and August year-on-year growth rose in just a few provinces, such as Hainan, and in Shanghai.

Moreover, trade at high-end eateries remained sluggish and revenue growth was negative.

Take-out and delivery services grew 30 to 40 percent compared with 2012 and group sales revenues for some caterers doubled in the third quarter.

The association predicted that the figures would show low-level growth in the fourth quarter of 2013, but said the industry would see double-digit revenue growth for the whole year.

Many high-end restaurants nationwide have either closed or were forced to change their core business to cater for individuals, rather than government departments or institutions, since the first quarter of 2013.

Su Qiucheng, director of the China Cuisine Association, said the high-speed growth previously seen in the catering industry hit a stumbling block last year, as the government crackdown on extravagant use of public funds began to bite. "It's a process of reshuffling and upgrading," said Su.

(China Daily USA 02/06/2014 page9)