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Catering industry faces slow growth this year

By Wang Zhuoqiong  (China Daily)

08:25, January 31, 2013

A chef displays vegetables at a banquet room during a local government meeting in Jinan, Shandong province. Serving vegetables rather than expensive luxury dishes are part of government measures to reduce extravagance. Wang Hui / For China Daily

But experts say spending by private sector will lessen blow to revenues

Catering businesses are feeling the effects of the government's recent announcement of a clampdown on extravagance and waste, according to a leading industry representative body.

The country's catering sector grew 13 percent last year, and was worth 2.38 trillion yuan ($384 billion), said Bian Jiang, assistant director of China Cuisine Association.

But that was 3 percent lower than previous expectations, and 3 percent down on 2011, after 23 years of consecutive growth, he added, which he attributed to a combination of the weaker economy, and the effect of the government's call to cut back on extravagance at the end of last year.

He said the beginning of 2013 is expected to show significant reductions in catering bookings, particularly at high-end restaurants and hotels, followed by sluggish performances throughout the whole year.

However, Bian said the policy will not hurt overall restaurant revenues too badly, because the majority of expenditure comes from the private sector and individuals, not government departments or organizations.

"About nine out of 10 restaurant customers spend their own money," he said. "So the new policies will only curb consumption in catering services for official functions."

Some leading high-end restaurants have already reported being less optimistic of their fortunes this year, with many complaining of losing key customers at a time when they normally expect major spending on year-end banquets and conferences.

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