Catering sector bounces back from shutdowns

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.