China sees closure of nearly 3 Million food service establishments

Nearly 3 million restaurants, cafes, and other food service establishments in China have closed in the past year, according to Radio Free Asia (RFA).

A significant number of these closures have been due to bankruptcies, with even some of the most popular restaurant chains shutting down hundreds of their locations to cut costs.

In early December, Zhenghao Da Da, a leading Taiwanese chicken chain, went viral on Weibo after announcing it would close all of its stores in China, starting with its flagship location at Shanghai’s New World City Plaza mall, RFA reported.

RFA highlighted an article from the industry website Hongcan, stating, “‘Contraction’ and ‘stores closing’ were the new buzzwords for the catering industry in 2024. The negative news just kept on coming, and the sense of chill was overwhelming.”

The closures have hit every segment of the industry, from fine dining to cafes, bakeries, hot pot chains, snacks, and fast food outlets, RFA reported.

Even upscale Western fine-dining restaurants have fallen victim to bankruptcy, fleeing owners, and unpaid wages, which the article described as “extremely embarrassing.” One notable example is the Beijing-based Michelin-starred Italian restaurant Opera BOMBANA, which shut down in April 2024, still owing wages to its staff and money to suppliers, RFA reported.

According to a list of high-profile closures compiled by Redcan, L’Atelier 18, a French restaurant on the Bund in Shanghai featuring a Three-Michelin-star chef, closed after just six months of operation. Similarly, Paul Pairet’s Roodoodoo also shut down less than a year after opening, RFA reported.

Snack, baked goods, and beverage businesses have also been severely impacted. Milk tea chain Taigai, Jixu Fresh Fruit Coffee, and Thank You Tea all closed multiple locations throughout the year, RFA reported.

Online commentator Lao Zhou explained that the sector has been affected by increasing rents and higher raw material costs. “The closure of restaurants reflects the reality that ordinary people have little money to spend,” Lao Zhou remarked. “Who’s going to dine out if they can’t afford it?”