China Restaurant & Foodservice Review
Enterprise Improvement
Corporate Turnaround and Restructuring
Financial Advisory Services
Information Management Services
AlixPartners 2010 China Restaurant & Foodservice Review
May 2010
© AlixPartners, LLP, 2010
www.alixpartners.com
Contents
A. Executive Summary B. Industry Environment C. Financial Performance - Profiles of Selected Restaurants D. 2010 China Consumer Survey Results E. Opportunities for Restaurant Chains
F. Conclusions
2
2010 Restaurant & Foodservice Review Executive Summary (1)
Market Trends Industry Structure
The Chinese restaurant industry has grown by about 11% in 2009 to about 2 trillion RMB. Growth was down from 16% in 2008. However, despite annual growth rates of 13% since 2003, the Chinese restaurant industry by 2009 has reached only about half the size of the US restaurant industry, as dining out expenditure per capita in China is less than 10% the expenditure of US people.
Chinese consumers remain substantially more conservative in terms of dining out than US consumers: while in the US, people nearly spend half their food expenditure in restaurants, Chinese people only spend 22% in restaurants.
The number of restaurants in China is vastly higher than in the US (5.1 vs. 0.9 million restaurants) and the industry is significantly more fragmented. Whereas the Top 100 restaurant chains in the US have a 45% overall market share, China’s Top 100 only has a 6% market share in 2009 (down from 9% in 2003). Western restaurants remain at a very low level in China, and have a market share of only about 1% in 2009. Apart from KFC, McDonald’s and Pizza Hut, no major US restaurant chain has achieved a major presence in China. Although the leading Chinese restaurant chains have minor market shares as the industry is highly competitive, profitability levels of leading chains were around 10-12% in terms of EBIT margins in 2009 and in line with average US fast-food chains in 2009. Given the solid
Corporate Turnaround and Restructuring
Financial Advisory Services
Information Management Services
AlixPartners 2010 China Restaurant & Foodservice Review
May 2010
© AlixPartners, LLP, 2010
www.alixpartners.com
Contents
A. Executive Summary B. Industry Environment C. Financial Performance - Profiles of Selected Restaurants D. 2010 China Consumer Survey Results E. Opportunities for Restaurant Chains
F. Conclusions
2
2010 Restaurant & Foodservice Review Executive Summary (1)
Market Trends Industry Structure
The Chinese restaurant industry has grown by about 11% in 2009 to about 2 trillion RMB. Growth was down from 16% in 2008. However, despite annual growth rates of 13% since 2003, the Chinese restaurant industry by 2009 has reached only about half the size of the US restaurant industry, as dining out expenditure per capita in China is less than 10% the expenditure of US people.
Chinese consumers remain substantially more conservative in terms of dining out than US consumers: while in the US, people nearly spend half their food expenditure in restaurants, Chinese people only spend 22% in restaurants.
The number of restaurants in China is vastly higher than in the US (5.1 vs. 0.9 million restaurants) and the industry is significantly more fragmented. Whereas the Top 100 restaurant chains in the US have a 45% overall market share, China’s Top 100 only has a 6% market share in 2009 (down from 9% in 2003). Western restaurants remain at a very low level in China, and have a market share of only about 1% in 2009. Apart from KFC, McDonald’s and Pizza Hut, no major US restaurant chain has achieved a major presence in China. Although the leading Chinese restaurant chains have minor market shares as the industry is highly competitive, profitability levels of leading chains were around 10-12% in terms of EBIT margins in 2009 and in line with average US fast-food chains in 2009. Given the solid