China’s catering sector sees slowest growth since 2003

August 15, 2012 3:40 pm
A chef prepares snacks at an evening market in Urumqi, capital of northwest China’s Xinjiang Uygur Autonomous Region/XINHUA

, BEIJING, China, Aug 15 – China’s catering industry posted its slowest growth since the 2003 SARS outbreak during the first half of 2012 due to the current economic slowdown, according to a report released by the China Cuisine Association on Wednesday.

The association’s report said revenue growth in the first half of the year was 3 percentage points lower than a year earlier without giving any specific figures for the catering sector.

Last month, Su Qiucheng, the association’s president, said sales revenues in the catering sector increased by just 13.2 percent year on year in the January-May period, marking the slowest growth in almost a decade.

The report projected a grim growth outlook for the sector this year, with large fast food chains maintaining an annual growth rate of around 10 percent.

Meanwhile, the report said the profit margin for domestic fast food companies dropped below 8 percent in the first half, as several catering giants had to shut down stores in south China’s Guangdong Province due to sharp declines in turnover and high costs.

“The trend of declining profit margins looks irreversible for the sector,” the report said.

Although pricing pressures have eased somewhat amid slower inflation growth, the rising cost of rent, fuel, materials and labor have still weighed heavily on restaurants, the report said.

In terms of labor, the catering industry was less attractive in the job market, as the sector has had to compete with other sectors to woo job hunters amid a labor shortage,

according to the report. The average remuneration for catering industry staff has increased at least 10 percent since the beginning of this year, with the per-capita monthly salary averaging more than 3,000 yuan (472 U.S. dollars), the report said.


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