Nearly 3 million Chinese restaurants, cafes shut down

China has seen nearly 3 million restaurants, cafes and other catering outlets shut down in the past year, according to industry website Hongcan, with many going bankrupt and even hugely popular chains slashing costs by shutting down hundreds of stores.

In early December, top Taiwanese chicken house Zhenghao Da Da went viral on Weibo after it announced it would shutter all its stores in China, starting with the flagship outlet in Shanghai’s New World City Plaza mall.

But the announcement was just “the tip of the iceberg,” according to a Jan. 21 analysis published on Hongcan’s website.

“‘Contraction’ and ‘stores closing’ were the new buzzwords for the catering industry in 2024,” the article said. “The negative news just kept on coming, and the sense of chill was overwhelming.”

The closures have been seen across all sectors of the industry, from fine dining to cafes, bakeries and hot pot chains to snacks and fast food.

Even high-end Western fine-dining outlets have been hit by bankruptcy, absconding owners and unpaid wages, “in an extremely embarrassing manner,” the article said, citing the closure of Beijing-based Michelin-starred Italian restaurant Opera BOMBANA, which shut down in April 2024 while still owing its staff wages and suppliers money.

(Pedro Pardo/AFP)

A resident of the eastern city of Taizhou who gave only the surname Wang for fear of reprisals said the impact on the street is highly visible where he lives.

“A lot of restaurants in Taizhou have shut their doors, including a lot of long-established ones,” he said.

“Some that were open for only four or five years have also closed.”

The outlets that are still booming are those frequented by government officials and departments, according to Wang.

Online commentator Lao Zhou said the sector has also been hit by rising rents and prices for raw materials.

But mostly, it’s about the flagging economy.

“The closure of restaurants shows us that ordinary people have no money in their pockets,” Lao Zhou said. “Who’s going to go eat in a restaurant if they have no money?”

Translated by Luisetta Mudie. Edited by Roseanne Gerin.