H-shareandA-sharerestaurantsbroadlyreportedsignificantearningsdeclinein1H13,exceptforAjisen(company-specificrecovery)andTaoHeung(flat).
Theunderperformancewasmainlyduetofrugalitymeasuresandavianflu,withmid-to-high-endfull-servicerestaurantsaffectedmostsuchasTangPalace,XiaoNanGuo(XNG),QuanjudeandXiangeqing.Forreference,Chinacateringsalesgrewonly8.7%withmid-to-high-endrestaurantsalesdown22.6%.Averagespending(down15-30%formid-to-high-endrestaurants)willnotrecoverinthenearterm,duetolingeringeffectfromfrugalitymeasures.
Therefore,restaurantcompanieshavebeenandwillcontinuetobecautiousaboutnewopenings(mainlyinexistingmarkets)intheshortterm.Thegrowthenginehasbeenshiftedto1)singlestoreprofitabilitydrivenbytrafficgrowth(insteadofASPonsloweconomy)andefficiencyimprovement(throughcentralkitchen/automation),and2)multi-brandswithassetlightmodel,targetingindividualspending.