Catering is one of China’s hot spots in consumption and an important driver of China’s retail sales growth. Over the past decade, growth of total retail sales in the accommodation and catering sector has exceeded that of total retail sales of consumer goods. The global financial crisis only had a minimal impact on China’s catering market. Total retail sales in the accommodation and catering sector grew nominally by 16.8% yoy to reach 1.8 trillion yuan in 2009. The real growth in 2009 was 17.6% yoy, slightly lower than that of 2008.

Catering industry prospers in China’s wealthier coastal regions. Guangdong, Fujian, Zhejiang, Jiangsu, Shanghai, Hebei, Tianjin, and Liaoning made up 54.5% of the total sales revenue of China’s catering industry from January to October 2009, with a total exceeding 800 billion yuan. On the other hand, sales revenue in China’s central and western regions is growing fast, demonstrating growth potential

According to the China Cuisine Association, sales revenue of the top 100 catering enterprises (the Top 100s) grew 2% yoy, up to 101.9 billion yuan in 2008.  The growth rate was much lower than the double-digit industry growth, while the Top 100’s overall share of the industry dropped slightly to 6.62%. The global financial turmoil has hurt the business of large scale catering enterprises, especially the upscale restaurants and those focusing on business banquets – it is reported that some upscale restaurants registered a sales revenue decline of 40%. Impact on restaurants targeting middle class consumers was milder with sales revenue dropping by 10%–20%. Restaurants targeting the mass and lower-end market segments, on the other hand, outperformed the other segments in 2009.