Economic woes bite into China’s fine dining market

What happened High-end dining in China is experiencing a significant decline. With the uneven economic recovery and the intensification of competition from budget-friendly eateries, consumers are opting for cheaper meals in major cities like Beijing and Shanghai. The result has been the closure of over 1,400 upscale restaurants between May 2023 and July 2024, including Michelin-starred venues like Opera Bombana in Beijing and trendy spots like Refer. The share of fine dining in Shanghai has plummeted to just 0.59% of the city’s restaurants. Compounding these issues, supply chain disruptions, triggered by Japan’s release of nuclear-contaminated wastewater in 2023, have severely impacted the availability of premium seafood, further affecting Japanese and Western restaurants. The Jing Take The downturn in high-end dining reflects a broader shift in consumer behavior across China. As economic growth slows and consumers tighten budgets, previously strong demand for fine dining is giving way to more pragmatic spending patterns. The closure of high-profile restaurants signals a shift in the evolving priorities of China’s affluent middle-class consumers, who increasingly favor value-oriented dining experiences. This trend is reshaping China’s food and beverage landscape, pushing upscale establishments to adapt by launching sub-brands with more accessible price points. For instance, the Japanese restaurant Bao House in Beijing introduced Jiubaowu, a sub-brand with an average order value roughly half that of its more premium counterpart. Supply chain disruptions, especially in the seafood sector, are adding further pressure, pushing some fine dining establishments to explore overseas markets to compensate for declining domestic demand. This highlights both the resilience and adaptability of China’s luxury dining sector, but underscores the growing importance of balancing premium offerings with more affordable options in a changing economic environment. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Economic woes bite into China’s fine dining market

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Published October 10, 2024

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Economic woes bite into China’s fine dining market