In 2024, the Chinese catering industry continued to struggle, with insiders saying even chain dining brands couldn’t hold on, with hotpot and tea drinks becoming hard-hit areas for closures.
In China, those involved in the catering industry’s second-hand equipment recycling sector are referred to as “corpse collectors” in the catering industry, and the second-hand equipment recycling sector is like a “mirror,” reflecting the true state of the catering industry. Some say that second-hand equipment dealers are the “thermometer” of the catering industry, able to sense the highs and lows of the industry.
According to a report by China’s Red Catering Network on January 6, some second-hand equipment dealers stated that in 2024 even chain dining brands couldn’t sustain! “Opening fewer stores,” “closing unprofitable stores,” and “enhancing store survival rates” have become common phrases in the mouths of dining industry professionals. Hotpot, tea drinks, and others have become heavily impacted.
Red Catering Big Data shows that as of November 2024, in the past year (from November 2023 to November 2024), over 300,000 hotpot restaurants in Mainland China closed down, making the hotpot industry one of the most severely affected in the reshuffling; and by November 2024, in the past 13 months, nearly 197,000 tea drink outlets shut down, with tea drinks even being referred to as a “black hole” for entrepreneurship by industry insiders.
An Da-wei, founder of Beijing Jingqi Intelligent Catering Equipment Co., expressed that in the first 10 months of 2024, the number of catering outlets he acquired was 2.7 times that of the same period in 2023.
The owner of a chain dining brand acquired by An Da-wei recently had at its peak opened dozens of outlets in Beijing, Hebei, and other provinces and cities. However, over the past two years, this brand has gradually closed stores, but the owner kept resisting, always feeling they could rise again. Therefore, after closing the store, they were reluctant to sell off the equipment and instead rented a warehouse with an annual rent of over 200,000 yuan, not to mention labor, transportation costs, making the storage cost for the equipment soar to over 600,000 yuan. Faced with the ongoing market downturn, the owner lost interest in starting afresh and ended up selling the equipment to An Da-wei for only a few tens of thousands of yuan.
Monkey, operating a second-hand equipment business in Foshan, revealed that a certain snack chain brand saw a significant decline in business in the first half of 2024. The owner decided to try transforming to make “sand pot dishes,” so they leased a warehouse and moved the previously used induction cookers, dishwashers, four-door refrigerators, woks, countertops, tables, and chairs to the warehouse, hoping to use them when opening a new store one day. However, last month, the owner decided to clear out the warehouse and contacted Monkey to recycle the equipment. In the end, Monkey acquired the equipment from over 10 outlets of the snack chain in the Guangfo region for 5,000 yuan for the entire store.
Liu Hongbin, co-founder of Shanghai Yuqing Catering Equipment Co., specializing in high-end second-hand equipment recycling, mentioned that a customer in Guangzhou operating a fusion cuisine business had opened six or seven stores in 2023, each time purchasing a versatile steam oven from him. But by 2024, apart from one oven obtained at the beginning of the year, he never received any inquiries from that customer again.
Recently, when a customer came to Liu Hongbin to buy damaged equipment strips, Liu Hongbin asked why they weren’t opening new stores, to which the other party bitterly smiled and said, “Surviving in 2024 is already good enough.”
The topic of struggling and closing catering establishments has attracted attention from netizens.
User “Already Indifferent_Not Afraid to Act” said, “A suggestion from a catering person: Don’t believe in the survival of the fittest, close unprofitable ventures promptly. Don’t keep dreaming that enduring a bit longer will turn losses into profits! Remember, even though many are closing down, there are still numerous individuals with no catering experience, but with inexplicable courage and confidence, diving into this industry. Ultimately, they only participate in price wars, draining their energy and time.”
User “Vendor” shared, “In my personal experience, I once opened a Chongqing-style Li Ji skewer shop, an affiliated shop in Chongqing, with an initial investment of 500,000 yuan. After three months, it reached a break-even point, but six months later, it started to lose money. Thinking that enduring a while longer would lead to profit, I kept reinvesting, totaling an investment of 900,000 yuan, and finally couldn’t hold on any longer after two years, resulting in closure.”
User “Know and Act” expressed, “It’s not just catering, it’s the same in all industries.”