Limited-Service Restaurants in China

PROSPECTS

Delivery service fuels growth

In the final two years of the review period, food delivery played a major role in driving up limited-service restaurants’ sales by expanding the channel’s consumer base. Consumers are increasingly choosing limited-service restaurants because of its convenience and speed of service, which can be further enhanced by delivery services.

Limited-service restaurants opening online flagship stores

In the face of the booming e-commerce segment, limited-service restaurants are embracing the development of online activities and joining internet shopping festivals to drive traffic for bricks-and-mortar stores. On 30 August, Burger King tied up with Tmall to launch Burger King Super Brand Day, offering steeply discounted products and Tmall exclusive combos via e-vouchers, which could be redeemed in offline outlets.

Limited-service restaurants encouraging self-order online

Limited-service restaurants saw significant development of online order mini-programmes over the review period. Consumers are encouraged to activate the mini-programmes via WeChat/Alipay, searching brand names directly or scanning a QR code and placing orders which they can choose to collect immediately or at a certain time slot.

COMPETITIVE LANDSCAPE

Yum! Restaurants China retains the lead

Yum! Restaurants China retained the lead in limited-service restaurants in 2018, thanks largely to the strength of KFC in the market. KFC grew strongly in the latter part of the review period by targeting local tastes through the expansion of its product offer and the introduction of innovations such as rice ball breakfast and milk cap tea.

Ice cream limited-service restaurants going through a tough time

The end of the review period saw ice cream limited-service restaurants suffer a sharp decline in value sales. Cold Stone Creamery, once a popular ice cream brand with 100 outlets in China, has been engaged in a significant reduction of its store network since 2017.

Adding coffee brings new opportunities for limited-service restaurants

The robust growth of coffee shops is attracting the attention of major limited-service restaurants, which are striving to shift away from an unhealthy image and generate sales through the introduction of health-orientated products. In July 2018, KFC opened its first boutique coffee brand, Coffii &Joy, in Shanghai, offering different types of gourmet coffee, tea and juice.

Files are delivered directly into your account within a few minutes of purchase.