Catering industry shifts as market changes

Lower meal prices mean slimmer profits in China's restaurant business. That's prompting some high-end eateries to change tack -- take a look at what that means for diners and the industry.

The days of fat profits in the restaurant business are gone. China Cuisine Association's survey shows more than half of restaurants posted a 40% drop in profits in the second quarter.

"I think most high-end restaurants are facing the same situation. You must accept the market's changes. Customers won't eat in your restaurant if the price is too high. So I need to cut the price." Yang Xiulong, Restaurant manager in Beijing said.

Less expensive meals means good news for diners, it's also triggering a sea change in the industry. High-end restaurants have slowed down their expansion, and some even shut down branches.

"Strategic shifts are a common pattern for these firms. On the one hand, famous brands choose to cooperate with each other. On the other hand, companies try to diversify their operations." Feng Enyuan, Vice Chairman of China Cusine Association said.

Group dining, fast food and delivery services are all options on the table for China's restaurant firms. Some high-end restaurants, such as duck chain Quanjude group and Xiang'eqing company, have already invested in popular food store franchises, to fatten their profits and minimise the risk of loss.