Restaurants encouraged to explore retail channels

Ding Yining
Given the recent boom in pre-cooked and ready-to-heat meals, experts urge catering brands to consider their offerings as retail consumer products.
Ding Yining
Restaurants encouraged to explore retail channels
Ti Gong

Caterers are advised to focus on their strengths while offering pre-cooked meals and packaged food through retail channels, according to a joint report by the China Chain Store & Franchise Association and domestic consultancy New Catering Big Data.

“Many caterers are fully leveraging their brand awareness to transform popular dishes into retail consumer products," said Wang Hongdong, founder of New Catering Big Data.

In the first three quarters, revenue of China's catering industry was down 23.9 percent from a year earlier to 2.52 trillion yuan (US$383.1 billion), according to the National Bureau of Statistics.

In October, catering revenue was 437.2 billion yuan, leaving the growth rate positive for the first time this year at a 0.8 percent pace.

The booming Internet industry and digitalization trend has offered new opportunities for the catering business. 

According to a survey of 71 domestic catering groups by the CCFA earlier this year, 90 percent of caterers started to offer takeaway service after the pandemic outbreak and 46 percent half-prepared meals.

Catering groups should focus on a selected number of hit products instead of offering a large variety of product lines in the initial stage, according to the report.

Most restaurants have strong brand awareness among shoppers and also rich supply chain and marketing capabilities, but they still face challenges such as shortages in retailing experience and talent, the report points out. 

Demand for pre-cooked food and ready-to-heat meals boomed after the pandemic outbreak.

The popularity of delivery service also allows restaurants to sell packaged food to online shoppers who are not necessarily frequent diners.

They should also pay more attention to food safety and relevant regulations as well as supply chain management to expand to wider geographical locations, Wang noted.

Dine-in consumers could also offer valuable input to improve and optimize the taste of packaged food to reduce operation costs.

"The recent craze for packaged food and pre-cooked meals will gradually fade after catering business returns to normal levels," said Hony Capital managing director Wang Xiaolong.

Those with more dedicated teams and expertise will have a better chance to survive the competition, he noted.

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