The first-tier city catering volume is not moving?

Red Meal Network

2024-06-03 15:54Posted on the official account of Guangdong Red Meal

What is behind the slowdown in the growth rate of catering revenue in the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, while the growth rate of catering revenue in new first-tier cities such as Chongqing leads the country?

This article was originally published by Red Meal Network (ID: hongcan18), author: Li Jinzhi; Edit: Fang Yuan.

Catering consumption in first-tier cities is not working?

Recently, some media reported that catering consumption in Beijing and Shanghai has declined significantly.

According to data from the National Bureau of Statistics, from January to April this year, the national catering revenue was 1,736 billion yuan, an increase of 9.3%. Judging from the performance of the top 9 key cities in terms of GDP in 2023, Beijing and Shanghai have seen negative growth in catering revenue. However, the growth rate of catering revenue in new first-tier cities such as Chongqing is leading, far exceeding the national market.

Why is the catering revenue of the four first-tier cities slowing down significantly, or even experiencing negative growth? What is behind the stark differences between the new first-tier and first-tier cities?

Beijing, Shanghai, Guangzhou and Shenzhen are obviously lagging behind! Chongqing outperformed

According to the "City Business Charm Ranking" released by the New First-tier Cities Research Institute, except for the four first-tier cities, the rest of the top nine cities in terms of GDP in 2023 are all new first-tier cities.

According to the data released by the local statistical bureaus, from January to April, the total retail sales of consumer goods in Beijing were 464.91 billion yuan, a year-on-year decrease of 0.2%; catering revenue was 42.22 billion yuan, down 2.3% year-on-year. Among them, Beijing's catering revenue in April was 10.419 billion yuan, a year-on-year decrease of 8.9%.

Compared with the first quarter, Beijing's catering revenue was 31.8 billion yuan, a year-on-year increase of 0.1%, which means that entering April, Beijing's catering data is even worse, and further drags down the overall social zero data.

The situation in Shanghai is similar to that in Beijing, with the total retail sales of consumer goods from January to April reaching 606.133 billion yuan, down 1.3% year-on-year. Among them, the retail sales of accommodation and catering industry reached 49.026 billion yuan, down by 2.5%, and the decline in accommodation and catering was higher than that of wholesale and retail.

Compared with the negative growth in the north, Guangzhou and Shenzhen have fallen into a state of sluggishness. From January to April, the growth rate of catering revenue was 4.1% and 0.7% respectively, which was lower than the national growth rate of 9.3% and was also at a low level compared with other cities.

At the same time, the catering market in the new first-tier cities represented by Chongqing, Wuhan and Suzhou has shown obvious vitality, among which Chongqing's catering revenue increased by 14.3% from January to April, outperforming the national growth rate.

The growth rate of catering in the four first-tier cities has slowed down or shown negative growth, which is in strong contrast with new first-tier cities such as Chongqing. Why is this happening?

"Excessive competition, lower food and beverage consumption rate." Some experts in the catering industry, who did not want to be named, said that the competition in the catering industry in the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen is more intense, especially in Beijing and Shanghai, where the assets of many residents are strongly related to real estate, and the shrinkage of housing prices has also led to a decline in consumer confidence.

On the other hand, in new first-tier cities such as Chongqing, the pressure of catering competition is relatively small, and the city itself is full of fireworks, and many street shops are still crowded until the early hours of the morning, and the enthusiasm for catering consumption is relatively high.

△ The picture and text are unrelated, picture source: photo by Red Meal Network

For Chongqing's catering revenue growth rate, the industry expert also emphasized: "Behind it should be industrial support, Chongqing's housing prices are the lowest in several municipalities directly under the central government, and the people's disposable income is higher and they have spending power." ”

According to data from the Chongqing Bureau of Statistics, the per capita disposable income of Chongqing residents in the first quarter of this year was 11,251 yuan, and the per capita consumption expenditure was 7,058 yuan. Among them, food, tobacco and alcohol expenditure accounted for the highest proportion, reaching 33.5%.

Zhai Bin, a columnist for Red Meal.com, also believes that in Beijing, Shanghai and other cities, both the cost of living and employment pressure are higher than those in other cities, and in the case of declining consumption, some non-essential consumption, such as catering, entertainment, and tourism, will be reduced accordingly.

Zhai Bin said that the slowdown in the growth of catering revenue in first-tier cities is also related to the fierce market competition and the difficulty of catering entrepreneurship. "If we talk about survival, the situation in third- and fourth-tier cities, and even counties, will be better. Because of its low cost, the rent of a small shop is only tens of thousands of yuan a year, and it costs tens of thousands of yuan a month in Beijing. ”

Competition is saturated and price wars are rife......

The first-tier cities can't move

Behind the collective downturn in the catering market in Beijing, Shanghai, Guangzhou and Shenzhen, the competition among catering businesses is also becoming increasingly fierce. In Zhai Bin's view, there is no increment now, and everyone is fighting hand-to-hand in the stock market.

Chenzhi big data shows that in 2023, the scale of catering stores in the first- and second-tier markets will show a significant negative growth, of which the number of stores in first-tier cities will reach 703,000, a year-on-year decrease of 7.4%.

This year's reshuffle in first-tier cities is also extremely intense, enterprise survey data show that from January to May this year, the number of newly registered catering enterprises in the four first-tier cities was 53,000, a year-on-year decrease of 5.8%, and the number of revocations was 31,000, a year-on-year increase of 3.7%.

In other words, there are fewer new F&B companies, but more have fallen.

In the face of competitive pressure, catering businesses have intensified involution, and the price war is the most obvious manifestation.

"The price war of the major catering brands in Beijing is really hitting the tip of the knife to the neck, and everyone is making money at a loss." Zhai Bin said.

Taking Beijing Chaoyang Joy City as an example, Red Meal Network found that almost all restaurants in the mall offer discount packages, such as Roman casserole, Liao Ji Bangbang Chicken and other fast food restaurants have launched a single meal of 19.9 yuan, and the discount of some Japanese restaurants is even as low as 2-3 folds.

△ Image source: Screenshot of Dianping

In fact, the catering market across the country is fighting a price war - Nancheng Xiang 3 yuan buffet breakfast, West Master 9.9 yuan a bowl of oily noodles, tavern 9.9 yuan a cup of craft beer, and even high-end restaurants with an average per capita consumption of thousands of yuan, also "fractured" to launch a single package of 198 yuan. In Zhai Bin's words, now "the price is back to ten years ago", "there are fewer discounts, and more fractures." ”

In order to find new incremental markets, many catering brands have set their sights on relatively blank markets, such as many brands that have previously developed in high-tier cities have gradually expanded to third-, fourth- and fifth-tier cities, and even county markets.

In early February this year, Yum China's CEO Qu Cuirong said at the earnings conference that there is a significant trend of consumption upgrading in lower-tier cities, and in 2023, more than half of Yum China's net new stores will be located in lower-tier cities. Benefiting from the advantages of rent and low labor costs, Yum China's stores in lower-tier cities perform as well as those in higher-tier cities. In order to accelerate the sinking, KFC has also specially developed the "small town mini store model".

△ Image source: Photo by Red Meal Network

Starbucks China is also making efforts to sink the market. According to the financial report data, the total number of Starbucks stores in China reached 7,093 in the second quarter of this year, with 20 new cities and nearly 900 county-level cities.

In addition, Hey Tea, Nai Xue's Tea, Luckin Coffee, Cudi Coffee, McDonald's, Haidilao, Lao Xiang Chicken...... From tea and coffee to hot pot and dinner, major brands will focus on the sinking market to expand the market.

The restaurant chain rate in the sinking market has increased significantly.

Recently, the "2024 White Paper on China's Catering Franchise Industry" released by the China Chain Store & Franchise Association shows that the chaining rate of the sinking market is improving, and the distribution of chain stores in third-tier cities and below in 2023 will increase by 0.6% compared with 2021, and the expansion rate is faster than that of first-tier and new first-tier cities. In addition, Meituan data shows that the number of chain stores in third-, fourth- and fifth-tier cities will increase by 1.7% in 2023 compared to 2021.

Conclusion

On the whole, behind the slowdown in the growth of the catering industry in first-tier cities, there is not only the impact of the general environment, but also the saturation of competition in the cities themselves.

On the other hand, the new first-tier and even more sinking markets are relatively better than those in first-tier cities in terms of catering consumption vitality, entrepreneurial costs and competitive pressure.

In particular, the consumption vitality of the sinking market represented by the county is breaking out in an all-round way. Taking coffee as an example, according to the "2023 Coffee and Tea Consumption Insights" report, in 2023, the per capita consumption growth rate of the county market will be 26% higher than that of the first-tier cities, making it the fastest growing market at all levels.

McKinsey predicts that by 2030, more than 66% of China's personal consumption growth will come from lower-tier markets. In this context, it is reasonable that the growth rate of catering revenue in the sinking market outperforms the first-tier cities and even the national market.

For catering brands, the rapid growth dividend of the 20 years of reform and opening up has disappeared, how to drive growth again? The above-mentioned industry experts also said that the future may also rely on refined management. "Because the core value of refined management is to optimize internal cost efficiency and upgrade external customer experience."

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