China's foodservice recovers after 2020 slump

A report from the NPD Group said China's foodservice industry showed signs of recovery in 2021 after a sharp decline in 2020. Data revealed that the sector ended 2021 with marked improvement after a tumultuous two-year period full of uncertainty brought on by COVID-19 and stringent lockdown measures throughout the country. The progress was thanks to vaccination rollouts and easing restrictions across the country. China reported a recovery in the first half of 2021 across the 22 Chinese cities tracked by NPD for the foodservice industry.
The firm said that there was also growth in foot traffic and spending over the first two quarters of 2021 compared to the same periods in 2019 and 2020. The number was markedly improved over 2020 revenue, seeing foot traffic and spending declines of 17% and 16%, respectively, over 2019. However, throughout the second half of last year, regional outbreaks caused a downturn in year-end results for foot traffic and spending, with each declining by a modest 2% versus 2019.
Meanwhile, Chinese-style restaurants, including Chinese full-service restaurants (FSR) and Chinese quick-service restaurants (QSR), reported strong growth in the first half of 2021 compared to 2019. Small chains and independent stores drove the increase. However, due to regional outbreaks throughout the country in the second half of last year, both Chinese FSR and QSR experienced declines in traffic. The highest losses occurred in the fourth quarter, NPD noted.
On the other hand, Western QSRs (WQSR) in China, led by large global chains such as McDonald's, KFC, Burger King, and Subway, fared better, thanks to their ability to expand their already high capacity for off-premises volumes. This flexibility made them more resilient when compared to the country's regional chains. Though some WQSR chains saw sales decline compared to 2019, overall WQSR increased 3% versus 2019 and 17% versus 2020.
Gimantha Jayasinghe, senior vice-president of APAC Foodservice at The NPD Group, said:
"Diverse menu options combined with innovative localised offerings helped WQSR succeed beyond expectations in China. While Chinese FSR and QSR chains did not see positive sales in 2021, their losses were not extreme, and we can expect a return to positive growth as the impact of the pandemic continues to subside throughout the country." (Image from Unsplash)

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