According to spectators, a competitive environment is compelled to provide more value to extremely budget-conscious diners, particularly as the economy is deteriorating and prices are rising, making it more difficult for consumers to tighten their belts.
They also warn against continuing cost reductions from the perspective of the company. Eating establishments also need to make sure their food and service requirements are upheld, in order for their popularity to suffer.  ,
According to Mr. Daniel Zipser, who leads McKinsey’s customer and financial function in Asia, “winners will be those who adapt quickly to new market trends and are adaptable to consumer demands with excellent service level.”
THE QUEST FOR Price
From cuisine to espresso, F&, B manufacturers have been slashing costs to get exceedingly budget-conscious diners in a competitive marketplace.  ,
Among them is high-end diner network Hefu Noodle, which announced price reductions in June. A standard dish of pasta costs between 16 and 29 renminbi for members, almost half the price of a regular bowl of noodles when the company was founded in 2012 when Beijing Business Today first launched.
However, common Taiwanese-style cuisine network Xiabu Xiabu announced in May that the prices of its new list would “return to the ancient days”.
According to local media website Guangzhou Daily, average set meal prices that have decreased by more than 10 %, with a single food costing 58 yuan on average and a double meal costing 130 yuan.
The latest developments have sparked conversation on Taiwanese social media platforms. A netizen remarked,” Cuisine prices are falling faster than the heat of the broth.
Local diners are slashing costs, and international fast food chains are also bucking the trend. According to a report released on August 4 by the state-run newspaper Global Times, US fast food giant Burger King is pricing its unique burgers at 9.9 yuan each, almost a fourth of what it was originally priced at.
In the area of caffeine, which Reuters reported in May, Starbucks has increased the number of discount deals being offered nationwide. Belinda Wong, the CEO of Starbucks China, stated in January that the business is” not interested in entering the rate battle.”
According to experts, the price cuts are intended to entice customers because consumer spending is sucked in by the nation’s second-largest economy’s economic and labor market problems.  ,
According to a research report released by Daxue Consulting in April, the latest craze for customers in China is to look for value-for-money choices.
Of the 1, 000 survey respondents, 32.6 per share viewed value as the top concern. Second was the presence of particular recipes, followed by the restaurant’s general atmosphere.  ,
The current trend of pricing is not a passing cycle, and is a reaction to major shifts in the market, said Ms Ashley Dudarenok, chairman of China-focused digital firm ChoZan.
She also made note of the fact that consumer choices for the Foreign F&, B business vary considerably depending on the individual and the time party.
According to a survey conducted by McKinsey &, Company at the end of 2023, client attitudes in industrial China varied significantly between different age groups.
The Gen Zs, aged 18 to 25, exhibit a more “optimistic” perspective on their economic prospects, leading them to spend more on excellent services that offer personal and social significance.  ,
In comparison, the rising middle class in primary- and second-tier towns, especially those aged 26 to 41, tends to follow a more traditional approach to investing, particularly on F&, B.  ,
This is often due to their financial agreements, such as children’s education and loan payments, said Mr Zipser.
Better Swallows, BUT AT WHAT COST?
Experts warn that such actions may not be responsible in the long run despite F&, B companies dangling discounts and promotions to give consumers more for their penny.
According to Mr. Zipser, the effects on company loyalty and long-term success is questionable, particularly if lower prices come with a price.
” Consumers are looking for price choices, but compromising on service quality can quickly damage a company’s picture”, he said.
Ms Chen, the hotpot standard who frequents chain restaurant brands, said that based on her observations, outlets scarcely maintain portion sizes after reducing prices, even if the quality of food stays the same.
” For example, after Tai Er ( known for its Chinese sauerkraut fish ) lowered its prices, the portion size of its signature pickled fish dish became smaller”, she claimed.
In a Jul 19 report from the Chinese financial paper The Securities Times, Jiumaojiu acknowledged that the exclusive pursuit of low prices is “unsustainable.”  ,
The catering business added that it would instead” continue to maintain the product value-for-money ratio while achieving a balance between quality and price.”
Similarly, Haidilao does n’t see lower prices as the pivotal factor in attracting business, even as it comes out with more budget ventures.
The Chinese hotpot chain first introduced Xiao Hai Hotpot last year, which the company claims is aimed at offering affordable yet high-quality hotpot options. Customers have each spent under 80 yuan on average, it added.
According to popular review and rating app Dianping, checks by CNA found that a 54-yuan value for an individual weekday lunch hotpot set meal coupon at Xiao Hai Hotpot is comparable to a children’s meal coupon, which is only valid for 0. 9 yuan.