Shocking: Millions of Companies and Restaurants in China Closed in the First Half of 2024

China's economy continues to decline severely, and the catering industry has also fallen into a comprehensive collapse, with businesses closing down in batches. In the first half of this year alone, more than one million catering companies shut down. Some catering giants even lost over 100 million yuan and exited the market in disgrace. A mainland recycler known as Qijian Clearance Brothers said, it eventually closed down. Three shareholders lost everything in Dongqing, Dongguan after investing 3 million to open this hotpot restaurant. Since the beginning of 2024, catering stores have been collapsing in the prosperous business districts and blocks of major cities such as Guangzhou, Shanghai, Beijing, and Chengdu, with new stores frequently replacing them. Another mainland catering recycler, Dog Brother, commented, how is the catering industry in Beijing? Here they are closing down in batches, and almost all stores are shut. On August 26, the well-known steamed bun seller, Beijing Ding Tai Fung, also announced that it would close 14 stores. Hongkong.com found that the catering market has become even colder this year, and long-established, large stores can no longer bear the strain. Hotpot, tea drinks and bakeries have been hit hardest. One recycler revealed that his business was so busy, he collected equipment from 42 hotpot restaurants in a single month. Dog Brother, a mainland catering recycler, said, in this area alone, I've collected from more than a dozen catering stores, and today I'm here to collect from another one. According to Tianyancha data, in the first half of this year, 1.347 million new catering companies were registered nationwide, while 1.056 million were cancelled or revoked, nearly the total number of closures last year. Zetian, a professor at the University of South Carolina, said, China's catering industry has indeed encountered a cold winter. The backdrop is the continued recession of the Chinese economy and rising unemployment. Ordinary people feel hopeless about the future and are afraid to consume or spend money. China's overall consumption has downgraded, and the catering industry has been the first to bear the brunt. Zetian added, the catering industry is trying to survive by cutting prices to attract customers, but if the number of customers continues to decrease, when it can no longer make money, it will have to close. This will cause the overall economy to continue to decline and unemployment to keep rising. So the severe winter of the Chinese economy will not end soon. It is reported that a large number of catering giants have also lost all their money and exited the market in disgrace. Among them, the chain restaurant Jiabu Jiabu lost 260 million yuan, with its net profit plummeting nearly 133 times. Nayuki's Tea is expected to lose between 420 million and 490 million yuan. Shanghai entrepreneur Hu Liren commented, restaurants can be said to be the last swan song of the entire Chinese real economy. Now that restaurants are finished, the entire Chinese economy is almost completely over. Beijing's catering industry profits plummeted by 90%. With 100,000 business owners struggling on the brink of bankruptcy, China's overall economic recession has not spared Beijing. The total profit of Beijing's catering industry for businesses above a designated size fell by 88.8% year-on-year, with the profit margin dropping to just 0.37%. More than 100,000 owners are struggling in a brutal price war. On August 26, Shandong's official media, Economic Observer, published an article on WeChat titled, 100,000 Catering Businesses in Beijing Struggle on the Edge of Microprofit. The article cited data from the Beijing Statistics Bureau, noting that in the first half of 2024, the total profit of Beijing's catering industry for businesses with annual revenue exceeding 10 million yuan was 180 million yuan, a year-on-year decrease of 88.8%, with a profit margin as low as 0.37%. The article explained that this year, low-price competition has persisted in the catering industry. Major catering establishments have launched a series of low-priced packages or actively reduced meal prices. Even high-end restaurants have introduced budget-friendly packages. The data reflects the impact of this price competition. An industry insider stated that catering enterprises need a net profit margin of at least 5-10% to maintain daily operations. With such a low profit margin, companies cannot afford any minor errors as they could immediately disrupt the capital chain. Even chain catering companies must close stores with large losses to survive. The article noted that whether to stay and continue amid this competitive environment or to withdraw and survive has become a crucial decision for over 100,000 catering business owners in Beijing. A high-end restaurant owner reported that the restaurant's performance began to decline in the second half of 2023. By July this year, profitability had shrunk to the edge of a small profit, with expectations of losses in August. He said that if the restaurant's capital chain breaks, it will immediately close to stop further losses. He has seen too many friends lose their entire fortunes trying to keep high-end restaurants operational in recent years. The article quoted industry insiders as saying that, given the current environment, the price war in the catering industry will continue, with no external forces capable of intervening. The industry has entered an era of big fish eating small fish, making it increasingly difficult for single-brand and small-scale enterprises to survive. The mainland catering industry media platform recently reported that more than 1 million catering stores in China closed in the first half of this year, nearly matching the full year total for last year and twice as many as the full year total for 2022. Not only small brands but also large catering brands are struggling. Tea drink brand Nayuki's Tea is expected to lose between 420 million and 490 million yuan. Chain restaurant Siabu Siabu lost at least 260 million yuan. And although coffee giant Luckin Coffee has expanded year after year, its profit has dropped by 50 percent compared to the same period last year.