Starting from last year, high-end restaurants across China began experiencing a significant drop in profits. According to statistics, the downturn of China's dining industry is gradually reversing; however, the era of extravagant profits will not be returning. Li Dong has the details.

 

　　A report from the China Cuisine Association or CCA shows that in the first half of 2013, the profit decline rate of dining enterprises with revenues over 2 million yuan dropped from 4.9 to 3.7 percent, indicating that the trend has been stalled.

 

　　Feng Enyuan is the vice chairman of CCA.

 

　　"One of the reasons is that enterprises with more than 2 million yuan in revenue have a clear view of the future development of the dining industry. They are aware that serving ordinary consumers is the way to realize sustainable development. Another reason is the recent adjustments that have been made to the operational structures of many high-end restaurants."

 

　　The CCA report shows that during the second quarter of 2013, average individual consumption dropped 15 to 20 percent, forcing prices to drop.

 

　　Yang Xiulong is the manager of a restaurant in Beijing.

 

　　"We have dishes priced from 10 to 20 to 30 yuan. Even if people just come here to have a bowl of noodles, we welcome them. We wouldn't charge them a lot just because our restaurant is well-renovated."

 

　　Yang Xiulong thinks the days of fat profits in the restaurant business are gone.

 

　　"I think most high-end restaurants are facing the same situation. You must accept the changes in the market. Customers won't eat in your restaurant if the prices are too high, so I've had to cut the prices."

 

　　Less expensive meals means good news for diners; it's also triggering a wave of change in the industry. High-end restaurants have slowed down their expansion, and some have even shut down branches. Feng Enyuan says:

 

　　"Strategic shifts are a common pattern for these firms. On the one hand, famous brands are choosing to cooperate with each other; on the other hand, companies are trying to diversify their operations."

 

　　Group dining, fast food and delivery services are all options on the table for China's restaurant firms. Some high-end restaurants, such as duck chain Quanjude group and Xiang'eqing company, have already invested in fast food franchises, to fatten their profits and minimize the risk of loss.

 

　　For CRI, I am Li Dong.