The Chinese catering sector grew only 9 percent year on year last year under the government's frugality campaign, the lowest level in 21 years, according to an industry report on Saturday.
High-end dining businesses even reported a drop in revenue, rarely seen in recent years, said the China Cuisine Association in a report.
The report showed restaurants across the nation earned a total of 2.54 trillion yuan (420 billion U.S. dollars) in 2013, with the upmarket catering sector suffering big losses.
Under the circumstances, high-end restaurants are seeking a transition to please mass tastes by offering breakfast, promoting group meals and introducing fair-priced dishes, said the report.
The frugality drive is part of efforts of the Communist Party of China to reject extravagance and bureaucracy and fight corruption.
The tourism and luxury goods markets have also seen a decrease in tours at public expense and shrinking sales of expensive liquor and cigarettes.