Apr 192014

China’s 100 largest restaurant chains saw their business revenue and profitability growth decelerate in 2013, as the nation is clamping down on government-funded receptions and their operation costs are on the rise.

Combined business revenue of China’s 100 largest restaurant chains grew by 5.7 percent in 2013 from the previous year to 191.1 billion yuan (31 billion U.S. dollars). The growth rate was 10.8 percentage points lower than that in 2012, the China Cuisine Association (CCA) said on Saturday.

Meanwhile, their average net profit margin narrowed to 4.1 percent last year, 3.62 percentage points lower than that in 2012, noted the report.

Fourteen big-name chains had to close restaurants in some cities, the CCA said in a latest report.

China’s central government this year will spend less on overseas visits, vehicles and receptions, popularly known as the “three public consumptions” amid the country’s frugality campaign, said the Ministry of Finance on Friday. For 2013, the central government spent 815 million yuan, or 10.2 percent, less than its original budget on the “three public consumptions.”

With the changing landscape of China’s cuisine industry, famous restaurant chains are spending more on employee training and research and development to lure new customers and enhance their competitiveness.

Growth of their combined spending on training as well as on research and development in 2013 surged 36.5 percent and 24.1 percent year on year, respectively, figures from the CCA revealed.

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