During this year’s Mid-Autumn Festival holiday, the customer flow at various Xi Bei restaurants in Jinan, belonging to the Xi Bei Catering Group, was sparse. After being caught in rumors of store closures and the founder’s wife pledging shares, the business of Xi Bei continues to face challenges. Some analysts believe that Xi Bei’s mishandling of the prepackaged food incident has led to a continual decline in operations.
The Mid-Autumn Festival holiday is usually a peak sales season for the catering industry. Many families go out for shopping and dining during the holiday, and businesses also utilize this period to offer various promotions to attract customers. However, several Xi Bei stores in Jinan did not feel the holiday atmosphere.
According to a report from “New Yellow River,” a publication under the Jinan Daily Newspaper Group on September 26, after the closure of Xi Bei’s Yumi Noodle Village and Harmony Square stores, Xi Bei now only has 4 stores left in Jinan, including those at Henglong Plaza, Longhu Jinan Xicheng Tianjie, Lingshow City Guhe Shopping Center, and Wanxiang City.
During lunchtime on September 23, at 12:00 pm, Xi Bei’s store in Longhu Jinan Xicheng Tianjie had only one table of customers, a father dining with his child. The reporter from “New Yellow River” did not observe any new customers entering the store during their stay.
During the dinner rush at 6:00 pm on the same day, at the Xi Bei store in Wanxiang City, Jinan, there were about five to six tables of customers dining, mainly consisting of middle-aged and elderly customers and families with children. The store, which has around 40 tables, had a lower occupancy rate compared to other dining brands on the same floor.
An employee at the Xi Bei store revealed, “This store is relatively better in terms of revenue and customer flow among the 4 Xi Bei stores in Jinan. During holidays, there is usually a line at the entrance.”
On September 26, during lunchtime on the Mid-Autumn Festival holiday, some Xi Bei stores in the commercial district of Jinan experienced a slight increase in customer flow compared to regular workdays. However, the gap in popularity compared to other dining establishments in the same mall was still evident.
The report mentioned that although the 4 Xi Bei stores in Jinan are operating normally, the business situation is not optimistic.
Xi Bei store staff also acknowledged the impact of online public opinion on store operations. “There is definitely an impact, the customer flow is not as good as before. On one hand, the entire catering industry is struggling, business is declining; on the other hand, it is also influenced by relevant online public opinions, these are two factors combined,” said a staff member.
Since September 2025, when Xi Bei was exposed to using almost entirely prepackaged food, it has been engulfed in a whirlwind of public opinion. This incident caused Xi Bei to incur daily operating losses of more than 2 million yuan (RMB). Xi Bei’s founder, Jia Guolong, revealed that from September 2025 to March 2026, Xi Bei’s accumulated losses are expected to exceed 600 million yuan.
In January of this year, industry reports emerged that Xi Bei would close 102 of its stores nationwide, accounting for approximately 30% of the total number of stores and affecting around 4,000 employees. Jia Guolong later confirmed the closure news. According to Tianyancha business risk information, on September 2, Xi Bei Catering Group Co., Ltd. added a pledge of equity information, with Zhang Liping pledging the equity to the Industrial and Commercial Bank of China Hohhot Ruyi Development Zone Branch for a pledge amount of 540,000.5 yuan, with the status being valid.
Zhang Liping is the wife of Xi Bei’s founder, Jia Guolong. The pledge of all the Xi Bei shares held by her has sparked heated discussions.
On September 19, a blogger claimed in a post that Xi Bei Catering might completely go out of business in the next two to three months, and “Xi Bei has been exposed to completely close down” trended on Weibo. The blogger revealed that the founder, Jia Guolong, would personally shoulder most of the debt, give up shares, and retain about 100 profitable stores for employees to operate on their own.
Xi Bei responded by stating that the news was not official and that all Xi Bei stores nationwide are currently operating normally. However, several reports from mainland China on September 20 indicated that staff at Shanghai Xi Bei stores confirmed that the stores were indeed facing operational difficulties: “Employees are looking for jobs on their own. There are no subsidies or compensations for store closures, and it’s already difficult to ensure normal salary payments. Previously, salaries were paid on the 10th, but now they are delayed until the end of the month. Last month’s salary was paid at the end of the month, and this month’s has not been paid till now.”
The manager of the Xi Bei store in Grandview Plaza in Guangzhou revealed that the store would cease operations starting September 28.
Although Xi Bei appears to be operating normally on the surface, an article by “Southern Weekend” on September 24 stated that while Xi Bei’s customer service center told the media that all national stores were running normally, the fact that Xi Bei is facing difficulties is undeniable. This crisis is mainly a result of Xi Bei’s mishandling of the prepackaged food incident.
After the exposure of Xi Bei’s heavy reliance on prepackaged food, Jia Guolong did not choose to handle the situation quietly but instead chose to confront it publicly and issued a statement denying the allegations, stating that he would sue for “damage to reputation.” However, subsequently, Xi Bei opened its kitchen and issued an apology letter on September 15, 2025, promising to adjust the processing methods of some menu items.
“Southern Weekend” pointed out that Xi Bei first denied the allegations aggressively, stated it would sue, and then apologized for reforming. This stark change in approach easily leads consumers to lose trust in the response. Xi Bei’s forceful handling escalated what could have been a minor public relations issue into a public event. The moment Jia Guolong chose to confront the situation forcefully, he may have overestimated the protective barrier of his brand.
“Southern Weekend” believes that while Xi Bei does have brand recognition, brand recognition and brand loyalty are two different things. When public opinion shifts, consumers who are familiar with Xi Bei can easily switch to other alternatives without any transitional costs. This is not just a public relations error but also a strategic misjudgment. When their vulnerability is already high, choosing an offensive battle that they cannot sustain was a mistake.