Small restaurants across mainland China have taken a beating as budget-conscious consumers refrain from dining out because of prevailing pessimism about their income amid a shaky economy.
Some establishments are already at a make-or-break point after posting losses for several straight months.
“My family used to live on the restaurant, which generated strong cash flow for us,” said Zhang Hongbin, owner of a canteen serving noodles and dumplings on Lancun Road in Shanghai’s Pudong New Area. “But all of a sudden, fewer clients showed up, and the revenue failed to offset costs such as rent, salaries and food.”
The downward spiral that began in July was unlikely to reverse because winter was normally a low season for the restaurant, he added.
The plight facing Zhang and his family provides a vivid example of how persistent deflationary pressure is wreaking havoc on mainland China’s catering sector, which provides more than 20 million jobs, according to the Ministry of Commerce.
Data from the National Bureau of Statistics showed that restaurant takings in the first 11 months of 2025 rose by 3.3 per cent from a year earlier to 5.2 trillion yuan (US$744 billion) – slower than retail sales growth of 4.1 per cent during the same period.
