In 2025, the catering industry in China faced unprecedented challenges. A fierce subsidy battle among food delivery platforms has become the decisive factor that is crushing numerous small family-run businesses. One such example is a local barbecue joint that used to top the charts and enjoy a thriving business for seven to eight years. Due to a significant drop in dine-in customers and slim profits from deliveries, the owner, Jingjing, reluctantly made the tough decision to close the shop and put it up for sale.
On a bustling street in Beijing, a long-established barbecue restaurant recently put up a notice for sale, sparking widespread attention from nearby residents and loyal customers. This barbecue joint had once been renowned for its unique flavors and top-notch service, ranking first in the local popular skewer restaurant list after 2020. Weekends were always packed with customers. However, now it is facing the fate of closure.
According to reports from Phoenix News’ “Eye of the Storm”, Jingjing and her husband mainly relied on dine-in sales, with alcohol sales accounting for thirty percent of the total profits, serving as the foundation for the business’s survival. However, since the subsidy battle among food delivery platforms intensified, customers were lured by discounted delivery options, leading to a noticeable decrease in foot traffic at their barbecue restaurant. The daily revenue on weekends plummeted from the previous 18,000 to 25,000 yuan to merely 8,000 to 9,000 yuan, barely enough to cover fixed daily expenses like rent, labor, utilities, etc., totaling around 6,000 to 7,000 yuan.
The subsidy battle among food delivery platforms escalated this year. Restaurant owners, especially small businesses like Jingjing’s, found themselves in a state of unease. She said, “Who could have expected that all the platforms would start ‘subsidizing’, offering cheap delivery to customers that caught us off guard.”
Jingjing mentioned that as the subsidy battle intensified, the number of delivery orders did not increase significantly, and the number of dine-in customers visibly decreased, which was the most devastating blow. While occasionally there might be more delivery orders, one cannot judge the situation based on just a day or two. The profit margin from deliveries was already thinner than dine-in orders, with the platforms taking a cut. After factoring in various vouchers and discounts, if a customer paid 100 yuan, the restaurant may only receive around 70 to 80 yuan. With one order, a customer might pay 177 yuan, but after deductions, the restaurant ends up with around 133 yuan, equivalent to a discount of 6.5 to 7.5 percent. For them, deliveries were merely for “turnover”, earning just enough to cover monthly utility bills.
Managers of chain restaurants like Jiahe Yipin and Xi Bei have publicly stated that platform promotions have squeezed the pricing space of businesses and called for “returning pricing autonomy”. Chain brands with supply chain advantages can barely withstand price wars, but for family-run restaurants and small individual eateries that rely on regular customers to sustain their business, dealing with complex platform rules and traffic logic makes them particularly passive and vulnerable.
This price war not only compressed the pricing space for businesses but also shaped more and more consumers’ habit of “ordering food at home”. Even gatherings with friends now often opt for delivery, further impacting the dine-in business of small establishments.
Jingjing arrived in Beijing in 2006 and was previously a director in the advertising industry. In 2017, she and her husband invested over two hundred thousand yuan to establish a popular local barbecue joint, where queues on weekends were a common sight from 2019 to the first half of 2024. At one point, they were making a net profit of 100,000 to 150,000 yuan per month. She had always believed in the principle that “good taste doesn’t fear deep alleys” and steered clear of playing with traffic.
However, business took a nosedive starting from the second half of last year. Faced with the trend that “good taste is just the foundation, while traffic and resources are the key to survival,” Jingjing was forced to compromise and invest over a hundred thousand yuan in learning short video operations and organizing promotional events to attract more customers. Yet, the results were minimal. She realized that these traffic strategies were too demanding for a family-run restaurant like theirs, leading to no increase in profits and failure to retain repeat customers.
Jingjing likened the decision to close the shop to a “divorce,” full of reluctance, confusion, and helplessness. She believed that the subsidy battle in food delivery was the key reason that crushed her, making her feel like “everything has lost its meaning.” She did not want to wait until the debts piled up before a sorry ending but wanted to explore new paths while still having the strength, such as pursuing a nutritionist certification or trying out senior dining services.
She observed that many around her who had low educational backgrounds and were older struggled more in the face of societal changes. The trend of “technologizing chefs” in more and more restaurants added pressure to the survival of lower-tier employees. A young worker of 18 in her shop left to deliver food, but unfortunately got seriously injured, making her more empathetic towards the plight of these lower-tier laborers.
The most heart-wrenching part for her was disappointing the loyal customers who had trusted her for many years. Those regular customers who had grown up from children to confide in her during times of heartbreak made her feel a kind of “emotional connection” beyond mere transactions.
Facing the deep involvement of platforms like JD’s “Qi Xian Xiao Chu” and Meituan’s “Raccoon Cafeteria,” she was perplexed and asked: Is this an irreversible trend? She still believed that food should be filled with “warmth” and “vitality,” not to be replaced by algorithms and machines. In her view, this transformation not only marks the disappearance of small establishments but also the gradual fading of the unique “vitality” that once filled the streets and alleys.