Pickier consumers lead to better Chinese chain restaurants

By Ding Yining | May 24, 2016, Tuesday |

Online Edition

Chinese chain restaurants grew quicker than the market average compared with independent food services companies as consumers are seeking quality, trust worthiness and consistency when they're dining out, a latest study shows.

Chinese consumers eat out almost three times a week on average, with food quality, wide choice of categories and service quality come up as the three critical factors while serve speed, convenience and pricing are rated as less important, OC&C Strategy Consultants said in a report today.

Haidilao is perceived as the most reputable food brand, followed by Pizza Hut and Little Sheep, according to the study, other western brands in the top 10 list include McDonald's, TGI Friday's and KFC, according to the study which covers 2,600 respondents from 21 cities in China's mainland.

"The arrival and rapid expansion of international chains in the past few years has increased the competitiveness of the market," Jack Chuang, a partner of OC&C Strategy Consultant in China’s mainland, Hong Kong and Taiwan, told an interview with Shanghai Daily.

Over 80 percent of Chinese with a monthly household income of RMB 20,000 or above agree that they actively seek out new restaurants and enjoy eating out at modern, casual restaurants.

"While the retail segments in China are entering the “new normal”, the challenge for high-end restaurants is about rethinking their menu instead of relying on alcohol for their profit margins," he added.

He also pointed out that western casual restaurant chain need to innovate their offerings to cater Chinese diners without additional operation cost.

Competition among restaurants are also intensifying as shopping malls are allocating more space for dining to attract visitors, with some of the diners feeling traffic going down year on year while consumers are actually eating out more often, he noted.

Compound annual growth rate of China's consumer foodservices market between 2010 and 2015 was 7.5 percent, compared to 1.4 percent growth pace in the US, according to Euromonitor International.

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Pickier consumers lead to better Chinese chain restaurants

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