Unlike China’s economic indicators that domestic demand is recovering, restaurant businesses are closing their doors one after another. Although the economic growth rate has recently rebounded, actual consumer sentiment is still in a contraction phase. Amid the crisis in the Chinese restaurant market, only low-priced food products, so-called “poor” menus, are enjoying a boom alone.
Chinese media Sina Finance and Taiwan’s Central News Agency reported on the 24th that 459,000 restaurants closed their businesses in China in the first quarter of this year, citing data from Chinese corporate information provider “Chichacha”. This is a 232% jump from the same period last year. On the contrary, 731,000 restaurants opened during the period, down 23.4% year-on-year. In addition, more than 1.36 million restaurants closed their doors in China last year. It is estimated to have reached a new high since 2020, when the spread of COVID-19 began, Chichacha said.
This means that while the number of restaurants closing is increasing rapidly, the number of restaurants opening businesses is decreasing. “In general, consumption is concentrated only on holidays and holidays, and conservative and rational consumption patterns are strengthening in everyday life,” said Wu Wen-de, an analyst at China’s Chaitung Securities.
Analysts say the trend is the recent popularity of low-priced menus in Chinese franchised restaurants. “As people tend to value high-cost menus as the best, ‘grilled gun (窮鬼) set’ is enjoying huge popularity in China,” said the Korean Central News Agency. Grilled gun means ‘beggar’ and ‘lover’ and is used to refer to menus in franchise restaurants that you can eat with the smallest amount of money in China these days.
A case in point is McDonald’s “1+1 set,” a global fast food company. You can eat two menus you want at a fixed price of 13.9 yuan (about 2,600 won). At the end of last year when prices were soaring, McDonald’s China raised the price of all products by 3 percent, but failed to touch the price of the 1+1 set. This is because Chinese consumers demanded that the price of the 1+1 set be left alone at the news of the price hike.
In addition, Nanchengxiang, a chain restaurant with more than 100 stores in the capital Beijing, recently launched a three-yuan breakfast set consisting of porridge, tofu, and soy milk, while Michun, a Korean food company, also launched a product that allows you to eat rice without restriction for only three yuan.
The “Poorish Menu Guidelines” are in vogue on social networking services (SNS) such as Xiao Hongshu. “Have a one-buy-one set menu at McDonald’s on Mondays, a 30 percent discount at Domino’s Pizza on Wednesdays, and a half-price burger at Burger King on Fridays.” “In the face of the economic downturn and sluggish consumption, the Chinese people are starting to carefully budget for eating out, and the restaurant industry has no choice but to offer poor menus to survive,” said NTDTV, a U.S.-based broadcasting company.
Prices have continued to rise amid the economic downturn. Low-priced menus are relatively less burdensome for people, who are burdened with prices. Low-priced menus will be of little help to the people, as well as to restaurants, which many people do not visit due to high prices. If various similar events are held along with low-priced menus, people will go to restaurants and store owners will be able to make money.
SOPHIA KIM
US ASIA JOURNAL
