Catering sector bounces back from shutdowns

People dine in a restaurant during the Mid-Autumn Festival holiday in Nanjing, east China's Jiangsu Province, Sept. 11, 2022.(Photo by Su Yang/Xinhua)

Customers return after COVID-19 takes financial toll

One of the most frequent review hashtags for Peijie Hotpot's two branches in Beijing on the restaurant-rating app Dazhongdianping is "long queue".

The outlets, located in Chaoyang district's Sanlitun and Shuangjing areas, have only been open for a month, but they have rapidly gained popularity among young people. During weekends, customers wait at least two hours to get a table at either branch.

Yan Dongsheng, founder of the business — one of the most popular hotpot chains in Chongqing, with some 60 branches nationwide — said he planned to enter the Beijing market last year.

"The aim was to open three to five branches in the capital this year, but because of the COVID-19 pandemic, we finally opened only two," he said, adding that he is happy to see both outlets attracting long lines of customers since they first opened.

As the pandemic situation is relatively stable, customers are becoming more positive toward food and beverage consumption. As the catering sector slowly recovers, restaurant owners plan to open new branches, while chefs continue to explore new dishes and menus.

Even though new waves of the pandemic occasionally emerge in cities across China, restaurateurs are doing their best to adapt to the situation by exploring fresh business opportunities, especially expanding their online trade.

Yan said that in May, when the management team at Peijie Hotpot's first store in Hangzhou, capital of Zhejiang province, was preparing for the outlet to open, the team members were locked down in Shanghai due to the pandemic.

"We pulled in teams from all over the country for the Hangzhou branch opening. During a trial operation, long lines formed outside the outlet. On opening day, 2,000 groups of customers were waiting in line for a table," Yan said.

He added that table turnover at the Hangzhou branch is the best among all Peijie Hotpot outlets.

Yan feels that due to its spicy flavors, Chongqing-style hotpot has become a popular choice for Generation Z (those born in the late 1990s or early this century), but adds that the domestic spicy hotpot market is competitive.

"Some businesses are focusing on creating new dishes, some on innovative soup bases. We insist on the authentic Chongqing hotpot soup base, which originates from my grandmother's recipe," he said, adding that Peijie Hotpot's soup base is made after 240 hours of natural fermentation and nine hours of simmering.

In addition to bringing fresh ingredients from Chongqing to its branches across the country, Peijie adds local ingredients to its menu, such as lamb in Beijing and bullfrog in Shanghai.

Outbreaks of COVID-19 in different cities spurred Yan's team to launch more business online, including operating a takeaway platform and running online communities.

Yan's team also sells through livestreaming, which now comprises 15 percent of e-commerce turnover at the business.

He said he plans to expand in many other cities, including Suzhou and Wuxi, Jiangsu province, Kunming, Yunnan province, and Xi'an, Shaanxi province. "My goal is to bring Chongqing's spiciness to the world," Yan said.

The food and beverage industry rebounded during the National Day holiday this year.

According to on-demand services platform Meituan, during the holiday week, the number of online pre-orders at restaurants rose by 87.6 percent year-on-year.

In Henan, the Department of Commerce said sales for the province's restaurant industry on Oct 1 — National Day — rose by 328 percent compared with the same day in 2020.

According to a report on Shanghai's consumer market during the National Day holiday issued by the city's Municipal Commission of Commerce, from Sept 30 to Oct 6, food and beverage consumption in the metropolis rose significantly, reaching 6.96 billion yuan ($959 million), up by 18 percent year-on-year.

Fully booked

In December, Hong 0871 Yunnan Cuisine Restaurant opened on the Bund in Shanghai, four years after its first branch in Beijing began operating.

Liu Xin, who owns the business, said that since the Shanghai branch opened, it has been popular among local customers, with all tables usually fully booked three days in advance.

The restaurant was closed from March to July, when large numbers of COVID-19 cases were reported in Shanghai, but business has since rebounded to around 80 percent of the pre-pandemic level, he said.

Liu said the Shanghai government has launched a series of measures, including tax relief and rent reductions, to stimulate the economy and help small businesses through difficult times.

"Shopping consumption coupons have also been introduced in Shanghai, which have helped attract more customers to our restaurant," he added.

In the first three days of this month, bookings at Chinese cuisine restaurant Cai Yi Xuan in Beijing, which has one Michelin star, reached about 90 percent, with most reservations made for family gatherings.

Single-day turnover on Oct 2 was nearly 200,000 yuan, according to Zhang Delong, the manager of Cai Yi Xuan.

Zhang said that before the National Day holiday, the restaurant prepared set menus for four to six people, priced between 2,560 and 3,160 yuan. These menus proved the most popular during the holiday.

"We change the dishes according to customers' needs. For example, some clients do not eat seafood, so we provide alternative dishes for the same price," he said.

Zhang said most clients visit the restaurant for business banquets. Before the pandemic emerged, they came to the outlet in person to check conditions at the business — especially the private rooms — before making a booking.

In May, a new wave of COVID-19 cases hit Beijing, with dine-in businesses in the capital shut down for more than a month. Zhang said that during this time, his team took high-resolution pictures of the restaurant from each corner so that customers could book a private room online without visiting the business in person to check hygiene conditions.

"We last took photos of our private rooms 10 years ago, when the business opened," Zhang said. "This time, the photos were taken in natural light so that customers could see conditions at the restaurant.

"We also launched an online system so that customers can order dishes when booking a private room," he said, adding that in the past three years, online sales at the restaurant have developed fast.

Zhang checks customer reviews of the business on Dazhongdianping each day. He not only replies to every comment, but also accepts some advice from the reviewers.

"A seasonal stewed oxtail with tomato dish received many good reviews, so we asked the chef to put this dish on our regular a la carte menu," he said.

"We now provide seasonal menus more often than before the pandemic emerged, as we always want our customers to have a new dining experience when they come to our restaurant," Zhang said, adding that chefs at the business are preparing a special menu for the hairy crab season.

Due to a combination of food and beverage consumption vouchers being issued in many places, an increase in summer travel and dining activities, and the online business transformation of catering enterprises, food and beverage revenue in August rose by 8.4 percent year-on-year. This compares with a 1.5 percent decline in July, according to the National Bureau of Statistics.

For the first time since March, the restaurant revenue growth rate of 3.3 percent was higher than that for merchandise retail.

Solutions found

Ren Pangbo, 42, general manager of Fengtian restaurant in Shenyang, capital of Liaoning province, has overseen efforts made in the past three years by the business, which specializes in northeastern cuisine and takes its name from the former name for Shenyang.

When the first wave of the pandemic emerged, Ren said he and his team were quite nervous, as they had no experience of such a situation. But in the past three years, they have been able to handle these circumstances by finding solutions to manage cost control for raw materials and personnel, as well as creating new sources of revenue.

"We have made a breakthrough with online business during the pandemic," Ren said. "As a restaurant focusing on traditional Chinese cuisine and the dine-in experience, we used not to pay much attention to online business.

"We launched our online shop to provide raw materials popular in Northeast China, such as linden honey, wild mushrooms and homemade pickled cabbage," he said, adding that the ingredients sold online can be traced to source.

Ren said the business also runs four virtual communities for a total of 2,000 people who are regular online and dine-in customers, providing the latest information about the outlet.

"We know exactly how many people are fans of our food and produce, and they always tell us about their needs in the chat group," he said.

Takeaway business at Fengtian, which specializes in fine Chinese cuisine, has been a particular success during the pandemic. For takeaway choices, the eatery offers homestyle dishes such as spicy and sour shredded potatoes, which are not available for dine-in customers. "We have a different cooking bench for making takeaway dishes," Ren said.

Before the pandemic, takeaway trade only accounted for 10 percent of the restaurant's sales volume, but it now comprises some 40 percent of its business.

In March, large numbers of COVID-19 cases were reported in Shenyang, with the city's dine-in businesses halted for two months. During this time, Ren's restaurant provided boxed meals as well as raw materials for the neighborhood. It asked its staff members to deliver the food.

"Sometimes if the customers could not cook, we cooked the ingredients according to their requirements, before delivering the food to them," he said. "Our solution to deal with the pandemic is to make the most of our employees and raw ingredients, and meet clients' needs without them having to leave their apartments."

Ren said that in 2020 after the first wave of the pandemic subsided in the city, local customers went on revenge spending sprees, before returning to rational consumption patterns.

He added that as COVID-19 cases stabilize in Shenyang, his restaurant's revenue has gradually returned to 80 percent of the pre-pandemic level.

Founded in 2012, the restaurant chain now has 13 branches in cities across China, including Xi'an, Shaanxi province, Taiyuan, Shanxi province, Jinan, Shandong province, and Shenzhen, Guangdong province.

New branches opened in Shenzhen in January and in Xi'an in July. Even though the opening of these two outlets was delayed by new waves of the pandemic in each city, both are proving popular.

At the Xi'an branch, customers sometimes wait in line for an hour to get a table.

"When it comes to flavors, the preferences of customers in Xi'an are not greatly different from those in Northeast China, so we don't change the seasoning for dishes at our branches outside Shenyang," Ren said.

"Each time the pandemic strikes, we never think about closing our doors. We do everything we can to keep running. In addition to launching takeaway choices, we even ask people in the shopping mall where we are located if they need any service from us."

Ren said the business is opening a total of three more branches in Shenzhen, Dalian, Liaoning, and Changchun, Jilin province, in the next two months.

"Northeastern cuisine is becoming popular across China, and we present it in a way that is different from people's usual impression of large quantities and homestyle cooking. We are confident about the prospects for the new branches," he said.

Seasonal ingredients have made their way onto restaurant menus across China for autumn, the harvest season. According to Meituan's Black Pearl restaurant guide, more than 50 percent of the nation's fine-dining restaurants have launched autumn menus.

Ingredients impress

Canadian-born chef Talib Hudda, who has lived in China for seven years, is impressed by the variety of the nation's ingredients. From Liaoning grapes to Chinese chestnuts from Beijing's Huairou district, Hudda is putting his discoveries on the autumn menu at Refer, his restaurant in the capital.

Located in Sanlitun, Refer has become a new destination for the city's most discerning diners since it opened in 2020. Customers need to book two weeks in advance for a table.

As occasional outbreaks of COVID-19 add to uncertainties over deliveries, one difficulty Hudda faces this year is changing his menu to accommodate the ingredients he can obtain each day.

"Cooking a new dish, or introducing it to the customers, is a challenge for the chefs and the waiters," he said.

In May and June, dine-in businesses in Sanlitun were shut down due to the pandemic, but Hudda said custom has gradually recovered since July.

Even though he faces difficulties this year, Hudda does not want to abandon his goal for the restaurant, which is to create an eatery in Beijing specializing in Northern European cuisine, where diners can enjoy international-level food and service.