China’s economic slowdown has caused nearly three million restaurants, cafes and catering outlets to go bankrupt and close down over the past year, according to a report by Voice of America, which cited Hongcan, an industry website as saying “even hugely popular chains [are] slashing costs by shutting down hundreds of stores.”
Top Taiwanese chicken group Zhenghao Da Da announced in early December it would shut all stores in the country, including its flagship restaurant in Shanghai’s New World City Plaza mall, but Hongcan said on January 21 that was just “the tip of the iceberg” with the catering industry suffering a “sense of chill” that was overwhelming.
The VoA report said tea chain Cuonei Village shut nearly 500 outlets across over 80 cities to less than 50 stores in December, while Fu Xiaotao and Huang Zhenzhen Milk Tea “dropped more than 300 stores apiece to just a handful.”
Another milk tea store, Taigai, plus Jixu Fresh Fruit Coffee and Thank You Tea had all shut multiple stores through the year. Middle class consumers had shrinking assets, with civil servants owed wages and many people unemployed, so consumers were behaving “more rationally,” the report said.
Read the full report: Voice of America.
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