New rules mean lean times (2)

Ma Wenfeng, a food industry analyst with Cnagri.com, said the slowdown in the country's catering industry was also caused by the sluggish economy.

He added that annual sales growth across the catering sector was more than 10 percent but over the past several months the rate dropped to 2.5 percent, the slowest rise since the 2003 SARS outbreak.

The country's gross domestic product in the fourth quarter of last year reached 7.9 percent after seven straight quarters of slowing down. It was the slowest year of growth for China since 1999, according to the statistics bureau.

"The industry is facing a new round of reshuffling and adjustment," said Bian Jiang, deputy secretary-general of the China Cuisine Association.

Cheng Hao, the owner of a Yunnan style hot pot chain in Beijing, said he might consider shutting down some of his outlets that are not in prime locations or reporting good returns.

"If the economic situation continues like this, closures are the only way out for me," he said.

Chen Junhai, an executive at Wangshunge Restaurant Group, which has 12 outlets in Beijing, said the move to eradicate public-funded extravagance had been a big blow to many high-end catering businesses.

About 30 percent of Wangshunge's income comes from business customers hosting luxury banquets to entertain VIP guests, Chen said.

"While some restaurants were having a hard time, some companies were using the downturn as an opportunity to readjust their business," Bian said.

Quanjude and Pianyifang roast duck restaurants introduced half-price dishes and smaller portions immediately after the anti-corruption rules were announced. Goubuli and Three Coins restaurants encouraged customers to order only what they could actually eat or take a "doggy bag" home.

"The country's catering industry still has huge room for development despite the downturn because there is great potential in the chain store business model and in untapped markets, such as the countryside market, which need to be further explored," Liang of the statistics bureau said in his report.