TAIWANESE dumpling chain Din Tai Fung will close more than a dozen stores in mainland China, a market that’s seen a brutal price war among restaurants to lure increasingly frugal Chinese consumers.
Beijing Hengtai Feng Catering will shutter 14 of its more than 30 stores in the country, including in the capital Beijing, Tianjin, Qingdao, Xi’an and Xiamen by Oct 31, the company said in a WeChat statement. The decision was attributed to the expiration of business licence and the board’s disagreement over renewal.
The announcement came as the likes of fast food brand KFC to local coffee chain Luckin Coffee find themselves locked in a race to woo thrifty customers. Softness in China’s recovery owing to a prolonged crisis in the property market, uncertain career outlook and a slumping stock market have contributed to the soured consumer sentiment in the world’s second-largest economy.
Din Tai Fung restaurants in China typically have a per capita expenditure of about 150 yuan (S$27.5), according to Dianping, a Yelp-like restaurant app. That per capita spend is increasingly at odds with an environment where high-end restaurants are rolling out buffet deals and fast food chains bombarding customers with deals that cost a little more than just a US dollar.
The Taiwanese chain, which has more than 180 stores globally since being founded in 1958, is not alone in scaling back operations in China. Multiple fine-dining restaurants with per capita spending of more than 500 yuan in China’s eastern metropolis of Shanghai have halted business this year, according to local media reports. Even Starbucks is exploring a strategic partnership after its China performance sagged as consumers flocked to local rivals with much cheaper offerings. BLOOMBERG
