China’s restaurant count fell to 7.475 million in October

China’s restaurant industry had 7.475 million outlets in October, down 3.3% from a year earlier, while average spending per diner fell 2.1% to 32.52 yuan, according to market data published Monday, November 9, by Hongcan and the Hongcan Research Institute. The figures show that the sector remained under pressure as operators faced both a smaller store base and more cautious consumer spending.

The report said the overall market continued to shrink, but the pullback was not uniform across all parts of the industry. Of the eight segments tracked by Hongcan, three posted year-over-year growth in store numbers and five recorded declines.

Chinese full-service restaurants showed the strongest expansion among the growth categories. Hongcan said that segment’s store count rose 4.4% to 1.389 million outlets in October. The made-to-order drinks segment also expanded, with store numbers up 3.5%, while barbecue outlets rose 1.5%.

The largest segment by store count, snacks and fast food, continued to contract. Hongcan said that category had 3.335 million outlets in October, down 4.9% from a year earlier. Bakery and dessert shops, along with Western restaurants, posted the steepest declines among the segments tracked. Bakery and dessert outlets fell 12.8%, and Western restaurants dropped 12.1%, meaning both categories lost more than one in 10 locations over the year. Hot pot restaurants declined 2.0%, and Asian cuisine outlets edged down 0.7%.

Spending data pointed to a similar pattern of strain across much of the market. Hongcan said average spending per diner across the full restaurant sector was 32.52 yuan in October, extending a downward trend. Six of the eight segments tracked reported lower average checks than a year earlier.

Chinese full-service restaurants posted average spending of 50.12 yuan per person, down 2.7%. In the made-to-order drinks segment, average spending fell 2.5% to 17.88 yuan. Snacks and fast food declined 2.4% to 21.95 yuan, while bakery and dessert shops fell 2.3% to 33.04 yuan. Hot pot dropped 1.0% to 57.90 yuan, and barbecue slipped 0.1% to 57.38 yuan.

Only two segments recorded higher average spending per diner. Western restaurants rose 4.5% to 82.55 yuan, the highest average check among the categories in the report. Asian cuisine increased 1.6% to 76.32 yuan.

Taken together, the two sets of data suggest that pressure in China’s restaurant market is not limited to one part of the business. A lower outlet count points to retrenchment in supply, while weaker per-customer spending suggests consumers remain careful about discretionary purchases. For hospitality operators, that combination can make it harder to offset costs through simple expansion or pricing moves alone.

The report did not tie the changes to a single cause, but it said the October figures should serve as a warning for restaurant operators entering the final stretch of the year. Hongcan’s research arm said relying only on new store openings or price cuts may not solve operating problems in a shrinking market. Instead, it said restaurant companies need to focus more closely on retaining customers, increasing repeat visits, controlling costs and protecting margins.

The October numbers also show how unevenly the slowdown is being felt. Chinese full-service dining continued to add locations even as spending per customer declined, suggesting that store growth has not shielded operators from softer demand. Snacks and fast food, a core mass-market segment, lost outlets and saw lower spending at the same time. Bakery and dessert shops and Western restaurants faced the sharpest contraction in store counts, but Western restaurants still managed to raise average checks, a sign that pricing power and outlet growth are moving in different directions across the market.

Hongcan published the data as part of a broad snapshot of the restaurant industry’s performance in October. Its figures indicate that China’s food-service market is still adjusting after a year in which growth has become more selective, with a few categories still expanding while much of the sector deals with falling store numbers, lower spending per diner, or both.