What's new?

The mainland catering industry is projected to enter a phase of profound adjustment and differentiation during 2025–2026. Although the overall market size is expected to continue expanding, the pace of growth will decelerate significantly. The industry is likely to encounter heightened survival pressures and experience substantial structural transformation. Overall Market Status and Data (Latest Insights as of Early 2026)

Market Size:

China’s catering revenue is projected to reach approximately RMB 5.7 trillion in 2025, with low single-digit growth — a significant decline from the growth rate in 2024. Some reports indicate that it has already exceeded RMB 6 trillion, but most sources suggest a slowdown in growth.

Store Closure Status:

The store closure rate in 2025 is expected to reach a record high, approaching or exceeding 48–50%, while the new store opening rate is also around 50%. This reflects a "high opening, high closure" or "one-in, one-out" phenomenon. The closure rate in first-tier cities (such as Beijing, Shanghai, Guangzhou, and Shenzhen) is approximately 35%, while it is slightly lower in third-, fourth-, and fifth-tier cities - though the pressure remains significant. Net store growth is limited, and the industry is shifting from incremental competition to a zero-sum game.

Consumer Characteristics:

Per capita consumption continues to decline, with the overall decrease in China's catering industry exceeding 30% from 2023 to 2025. Consumers are becoming more rational and selective, focusing increasingly on cost-effectiveness, health, and convenience. High-end consumption is contracting, while essential categories (such as community fast food and noodle snacks) remain relatively stable.

Key Trends and Developments

Lower-tier cities are driving growth, with third-tier and below expected to account for 65% of total stores. County-level cities now see more openings than closures. The “ground-hugging” model—community fast food and affordable snacks—dominates survival, while the “stargazing” model of high-end and specialty concepts pushes differentiation.
The food delivery battle among Meituan, Alibaba, and Douyin remains intense but is shifting from subsidy wars to efficiency competition as regulators tighten controls on low-price campaigns. Delivery continues to reshape dining habits, pushing dine-in rates lower and prompting operators to rethink their strategies.

Pre-cooked meals and smart kitchen technology

Pre-cooked meals and smart kitchen technology are booming despite public skepticism. The market, worth nearly 500 billion yuan in 2024, is expected to hit 700–750 billion yuan by 2026. While adoption still leans heavily toward B2B—prepared meats make up 57%—consumer acceptance is rising. Major chains like Laoxiangji and Juewei are investing in automated cooking systems to offset labor, rent, and ingredient costs.
Despite resistance, success still hinges on “taste.” Consumers favor freshly cooked meals and open kitchens, but the issue with pre-prepared food lies less in the method and more in transparency and quality control.

Category Differentiation and Innovation

Chinese full-service restaurants are expanding quickly but seeing smaller ticket sizes. Menus are narrowing to focus on best-selling dishes. Regional cuisines—such as Shunde, Ningbo, and Mabang—are venturing into new markets, boosted by cultural tourism and national trend appeal.
Fast food is becoming more like casual dining, and traditional snacks such as porridge and steamed buns are thriving in delivery channels. Rice-based fast food and light meals are emerging as mainstream choices.
Health-focused, fermented, and non-alcoholic products are gaining momentum as younger generations turn to cleaner eating habits. Tougher compliance rules, alcohol restrictions, and limits on street vending have intensified competition.
Small, independent operators face mounting pressure as capital-backed chains dominate the landscape. In 2026, efficiency, repeat purchases, and value creation will define success, marking a shift from scale and traffic to loyalty and sustainable growth.

Challenges and Pressures:

Policies and events like social security compliance, alcohol bans, and the ban on street vending in hotels have made competition even tougher.
Small stores and local brands are finding it harder to survive, while large chains with deeper pockets are hitting traditional mom-and-pop shops especially hard.
In 2026, success will depend less on scale, traffic, and viral products—and more on efficiency, customer retention, and real value creation.