In March, the performance index of China’s catering industry was 39.77, which was 10.23 below the neutral level of 50, indicating that the industry continues to contract. The China Cuisine Association stated that the major reason for this situation is the significant subsidies provided by platforms.
On April 17, the China Cuisine Association released the “March China Catering Industry Performance Index Report” on its official website. The report revealed that the overall performance index for March was 39.77, a decrease of 3.03 compared to the previous month and 10.23 below the neutral level. Specifically, the current index was 37.36, down by 5.57, and the expected index was 42.18, decreasing by 0.50.
According to the report, “In March, the catering industry faced overall pressure, with various indices falling again, keeping the performance index below the neutral level.”
Furthermore, the decline in the current index was more pronounced: “In March, the current index of the catering industry was 37.36, down by 5.57. The indices for store sales were 34.48, profit was 37.18, employment scale was 40.42, and customer flow was 37.35, each decreasing by 5.72, 5.35, 3.51, and 7.70 respectively compared to the previous month.”
The report attributed the current pressure in the catering industry to a combination of three factors: high-frequency large subsidies from platforms, increased consumer price sensitivity, and rising operating costs for businesses.
Among them, the high-frequency large subsidies from platforms have become a significant factor disrupting the normal operation order of the catering industry. The report stated, “The pricing system of the catering industry is impacted by intense subsidy competition,” with these subsidies particularly affecting smaller-scale stores. The performance index for larger-scale stores was 52.70, while for smaller-scale stores, it was only 33.30.
The report pointed out, “Structurally, business formats with higher reliance on group dining, dine-in services, especially those representing Chinese-style meals and hot pot, showed a more pronounced decline.”
In response to this, Peng Jianzhen, the president of the China Chain Operations Association, stated at the 2026 China Chain Catering Summit on April 8 that platforms should halt large subsidies.
Tencent Finance disclosed on April 20 that Peng Jianzhen mentioned that in 2025, the number of catering-related closures nationwide reached 3.39 million, a 9.4% increase year-on-year. Nearly two-thirds of the closures had operated for less than two years, with a large number of new entrants being squeezed out of the market due to fierce competition during the experience accumulation period. He expressed opposition to “internal competition-style” subsidies, emphasizing that this would be a key focus for the association in the next phase.