Thrift campaign hits high-end dining hard
Source: Xinhua |
April 18, 2013, Thursday
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Print Edition
Print Edition
CHINA'S frugality campaign has turned up the heat on the catering industry, especially the high-end dining sector, an official data showed.
The catering industry grew 8.5 percent year on year in the first quarter, with the growth rate down 4.8 percentage points from the same period last year, according to statistics released by the National Bureau of Statistics (NBS) on Monday.
"The slower growth was within our expectations, but we did not expect it to be so dreadful," said Bian Jiang, assistant to the president of the China Cuisine Association.
A survey released by the association on April 10 indicated that high-end dining businesses had taken the major brunt of the frugality campaign.
The NBS defines high-end dining businesses as those with over 40 employees with annual sales exceeding 2 million yuan (US$320,000). The sector fell 3.3 percent in the first two months, marking the first negative growth since China initiated its reform and opening-up policy over three decades ago. In some cases, business revenue plummeted by as much as 50 percent in February.
Rising costs of rent, raw materials, labor and various other fees were the four major factors that adversely affected the catering industry, Bian said.
"There are as many as 46 kinds of taxes and fees imposed on the industry," Bian said, adding that the recent frugality campaign was the straw that broke the industry's back.
China's new leadership announced a frugality campaign in December to curb consumption that uses public funds, among other purposes.
High-end restaurants took the biggest hit in the campaign.
Dining giant Xiang'eqing is expected to register losses of up to 70 million yuan in the first quarter, which is in a sharp contrast to 46 million yuan in profits it reported during the same period last year.
Bian said the downward trend will be difficult to reverse, because the first two months usually outperform the rest of the year as there are many holidays at the beginning of the year.
But despite the setbacks, he is optimistic of a possible turnaround.
"First of all, we need to transform and upgrade the catering industry, and secondly, we hope for more favorable policies that will deliver us out of the mire," he said.
The catering industry should find a way to meet the needs of a wealthier Chinese society. To this end, the association has invested in research and sales promotions across the country, Bian said.
The catering industry grew 8.5 percent year on year in the first quarter, with the growth rate down 4.8 percentage points from the same period last year, according to statistics released by the National Bureau of Statistics (NBS) on Monday.
"The slower growth was within our expectations, but we did not expect it to be so dreadful," said Bian Jiang, assistant to the president of the China Cuisine Association.
A survey released by the association on April 10 indicated that high-end dining businesses had taken the major brunt of the frugality campaign.
The NBS defines high-end dining businesses as those with over 40 employees with annual sales exceeding 2 million yuan (US$320,000). The sector fell 3.3 percent in the first two months, marking the first negative growth since China initiated its reform and opening-up policy over three decades ago. In some cases, business revenue plummeted by as much as 50 percent in February.
Rising costs of rent, raw materials, labor and various other fees were the four major factors that adversely affected the catering industry, Bian said.
"There are as many as 46 kinds of taxes and fees imposed on the industry," Bian said, adding that the recent frugality campaign was the straw that broke the industry's back.
China's new leadership announced a frugality campaign in December to curb consumption that uses public funds, among other purposes.
High-end restaurants took the biggest hit in the campaign.
Dining giant Xiang'eqing is expected to register losses of up to 70 million yuan in the first quarter, which is in a sharp contrast to 46 million yuan in profits it reported during the same period last year.
Bian said the downward trend will be difficult to reverse, because the first two months usually outperform the rest of the year as there are many holidays at the beginning of the year.
But despite the setbacks, he is optimistic of a possible turnaround.
"First of all, we need to transform and upgrade the catering industry, and secondly, we hope for more favorable policies that will deliver us out of the mire," he said.
The catering industry should find a way to meet the needs of a wealthier Chinese society. To this end, the association has invested in research and sales promotions across the country, Bian said.
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